loaning a subcontractor a van


R

r.bartlett

Hi guy's

Whats the implications of loaning a van to a subbie ??

Cheers

Richard
 
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M

Mike Lewis

r.bartlett said:
Hi guy's

Whats the implications of loaning a van to a subbie ??
Increased risk of the Revenue trying to reclassify him as an employee.
 
R

r.bartlett

Mike Lewis said:
Increased risk of the Revenue trying to reclassify him as an employee.

Both points well made and to a certain point both headed off

subbie 1 is due to come on the books next month -the insurance has been
arranged

subbie 2 is a Bulgarian and is not allowed to work as an employee in the UK.
However he is allowed to have a small business which is why he's self
employed

therefore the revenue trying to reclassify him as an employee should not
apply -agreed??

Cheers

richard
 
J

Jonathan Bryce

r.bartlett said:
subbie 2 is a Bulgarian and is not allowed to work as an employee in the
UK. However he is allowed to have a small business which is why he's self
employed

therefore the revenue trying to reclassify him as an employee should not
apply -agreed??
No

However, if the Revenue do reclassify him as an employee, he is in big
trouble.
 
M

Mike Lewis

r.bartlett said:
Both points well made and to a certain point both headed off

subbie 1 is due to come on the books next month -the insurance has been
arranged

subbie 2 is a Bulgarian and is not allowed to work as an employee in the UK.
However he is allowed to have a small business which is why he's self
employed

therefore the revenue trying to reclassify him as an employee should not
apply -agreed??
I admit, I dunno. But I wouldn't put it past them to try and then try to
prosecute you for illegal employment.
 
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S

Simon

So whats changing over the next months.

I was reluctant to just post as I am always posting the hard line but Self
Employment is a question of fact, not choice.

If you pay someone based primarily on hours worked and they do not provide
there on tools then they are more likely to be employed, and it sounds like
he already is.
I admit, I dunno. But I wouldn't put it past them to try and then try to
prosecute you for illegal employment.

--
I didn't know we could do that, that's works and pensions and we haven't
been merged with them yet.

A word of warning. The HMRC is increasing its activity on status in the
construction industry. London has just increased its resources in this field
4 fold. London is not bucking a trend so I would take these guys warnings
very seriously indeed.
 
T

Tim

... Self Employment is a question of fact, not choice.
Surely, rather it is a question of *opinion* -- neither 'fact' nor
'choice' -- and it's HMRC's opinion which is the one that normally wins??
 
S

Simon

Tim said:
Surely, rather it is a question of *opinion* -- neither 'fact' nor
'choice' -- and it's HMRC's opinion which is the one that normally wins??
Oh if only Tim, that's the opinion part. Actually, in the end its the
Commissioners that are the true deciders, the public and HMRC have to gather
the facts and try to reach agreement, if they cant, they have to be prepared
to present these facts to the commissioners and are dependant on them for
the final say. If they do not give full consideration, then either party can
appeal and go to the higher authority but that usually has to be on a point
of law.

I suppose there is a certain amount of this decision making process that is
subjective as there are about 10 major factors that decide whether Self
Employed/Employed status applies and very few of these actually form a
deciding factor on there own. Our training on this subject refers to a
"Basket of Indicators" and this is probably to best description they could
have come up with. I suppose what I meant was that they are decided on the
facts of the case. Just because we "Want" to be in a self employed position,
this does not overtake the facts of the relationship. If a worker does not
take on any financial risk, that means investing substantial sums in their
own business, does what they are told, when and were, and are remunerated on
a time served basis, that is much more likely to be deemed to be employment
than the other way round.

There are not that many tax cases on the subject and the one that is usually
quoted is Ready Mixed Concrete as they were providing the trucks, the
customers and the materials but treating the drivers as self employed.

The usual thing with the Construction industry was that the workers would go
to IR, say they are self employed and get the old 715. This would be
produced to the Contractor who would claim this as the evidence that self
employment applied. This is not good enough any more.

If you are self employed, you have to demonstrate that you are able to trade
in your own right without dependence on a single customer. That usually
means equipping your self with all the normal tools of the trade, and as far
as a builder is concerned, that includes the van.
 
P

Peter Saxton

Both points well made and to a certain point both headed off

subbie 1 is due to come on the books next month -the insurance has been
arranged

subbie 2 is a Bulgarian and is not allowed to work as an employee in the UK.
However he is allowed to have a small business which is why he's self
employed

therefore the revenue trying to reclassify him as an employee should not
apply -agreed??

Cheers

richard
You say he's not allowed to work as an employee but he's allowed to be
self employed.

When you decide whether someone is employed or self-employed it is a
question of fact (based on opinion). You don't only consider what is
legal.
 
S

Simon

Peter Saxton said:
You say he's not allowed to work as an employee but he's allowed to be
self employed.

When you decide whether someone is employed or self-employed it is a
question of fact (based on opinion). You don't only consider what is
legal.
Unfortunately Peter, the Home Office has lumbered us with this decision, its
a right mess.

I have found this in the Hotel Industry and I am sure this is wide spread.
 
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R

r.bartlett

Whats the implications of loaning a van to a subbie ??
Unfortunately Peter, the Home Office has lumbered us with this decision,
its a right mess.

I have found this in the Hotel Industry and I am sure this is wide spread.
Sorry about the delay in getting back..

This seems a tad worrying as a small time subbie trying to grow into a
company offered a huge contract would have to turn it down because of this
issue..

However we now have the problem of once finding a fantastic potential
employee -who we would employ at the drop of a hat - being concerned that
we're not allowed to employ him because the H.O won't let him/us but if we
don't use him as a subbie he'll go elsewhere and our chance to grow as a
company takes a big hit.. ....

It's madness I tell ya..

Can anyone see a work round till he becomes eligible for employment??

(The other guy will be onboard by the end of the month so we don't feel
that's a concern..)

Cheers

Richard
 
T

Troy Steadman

r.bartlett said:
However we now have the problem of once finding a fantastic potential
employee -who we would employ at the drop of a hat - being concerned that
we're not allowed to employ him because the H.O won't let him/us but if we
don't use him as a subbie he'll go elsewhere and our chance to grow as a
company takes a big hit.. ....
Welcome to the construction industry. Anyone who is any good can get
immediate work for Cash, if you want to employ people who are any good
you have to be prepared to pay them Cash (ie pay their tax and NIC as
well as yours) which is only feasible if you are working for Cash
yourself...

Look on the bright side - at least the rest of us don't have to pay VAT
when you decorate our kitchens :)


--
 
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T

Tim

r.bartlett wrote
"DoobieDo" wrote
the moment subbie doesn't give you an invoice for work done.
What, even before the two persons met each other?!
Qu.: When is the *first* moment which the subbie "didn't give an invoice"?
 
D

DoobieDo

What, even before the two persons met each other?!
Qu.: When is the *first* moment which the subbie "didn't give an invoice"?
take more water with it Tim
 
T

Troy Steadman

DoobieDo said:
What, even before the two persons met each other?!
Qu.: When is the *first* moment which the subbie "didn't give an invoice"?
take more water with it Tim
Giving an invoice proves you are a subcontractor Tim, if you weren't
drinking so heavily you'd have realised that for yourself!




--
 
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R

r.bartlett

You know the answer to that because it is the common-sense answer.


Very nice website.
Why thank you Mr Troy ;-)

But let me re-adjust the question

At what point would the IR reclassify him as an employee in order to
fine/imprison us....??

Cheers (no water in mine BTW;-))

Richard
 

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