Payment to self employed


J

John

Hi

1. Is it true that before companies can pay to self employed the self
employed needs to provide companies with their IR Self Employed Reference
Number?

2. How long doe sit take to get the IR Self Employed Reference Number if one
to start new as self employed?

I am just wondering what is a self employed to do payment wise while he/she
is waiting for the reference number?

Thanks

Regards
 
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P

Peter Saxton

Hi

1. Is it true that before companies can pay to self employed the self
employed needs to provide companies with their IR Self Employed Reference
Number?
No

2. How long doe sit take to get the IR Self Employed Reference Number if one
to start new as self employed?
Depends on how many times HMRC lose the form you send them.
I am just wondering what is a self employed to do payment wise while he/she
is waiting for the reference number?
Receive payments for work done.
 
J

John

Hi Peter

Many thanks.

Once of the accountants in a company I have talked to says it is a new rule
by IR. May be he is trying to be over careful?

Thanks

Regards
 
R

Ronald Raygun

John said:
Once of the accountants in a company I have talked to says it is a new
rule by IR. May be he is trying to be over careful?
You are confusing things. The "new rule" (which I think must be about
5 years old by now) is that the self-employed person should inform the
IR that they have become self-employed as soon as they do so (within
a few months). Your customers/clients have no need to know any such
details.

But there are special rules for sub-contractors in the building trade.
 
J

John

Hi Ronald

I completely agree with that and I knew all this. But this guy seems adamant
and has categorically said IR has this new rule coming into effect recently.
I guess I will have to tell them that I have got info from reliable sources
that it is not true.

Thanks

Regards
 
J

John

Hi Guys

Here is the statement I got from this accountant;

"According to new rules of Inland Revenue ,Companies can not make payments
to any self Employed peoples unless they provide the inland revenue
self-employed registration number."

Sorry if I have wasted your time but just wanted to be sure.

Thanks

Regards
 
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R

Ronald Raygun

John said:
I completely agree with that and I knew all this. But this guy seems
adamant and has categorically said IR has this new rule coming into effect
recently. I guess I will have to tell them that I have got info from
reliable sources that it is not true.
Why not just challenge him to provide an IR source to confirm his claim?
 
P

Peter Saxton

Hi Ronald

I completely agree with that and I knew all this. But this guy seems adamant
and has categorically said IR has this new rule coming into effect recently.
I guess I will have to tell them that I have got info from reliable sources
that it is not true.

Thanks

Regards
Ask the guy to show you this rule on HMRC website or other place of
reference.

If he can't then say you should be paid for work done to date and if
they are unwilling to pay you for further work until you provide the
UTR you'll stop working for them until you get the UTR and they are
willing to pay you.
 
R

Ronald Raygun

Peter said:
If he can't then say you should be paid for work done to date and if
they are unwilling to pay you for further work until you provide the
UTR you'll stop working for them until you get the UTR and they are
willing to pay you.
I suppose there are circumstances in which the nature of the work done
is such that it could, after the event, be held to have been an
employment relationship rather than an arrangement for the provision
of services. Where that happens, i.e. where the "customer" is later found
really to have been an employer, then the employer would be held liable
for any income tax and national insurance which should have been
deducted in a normal employment relationship.

It's conceivable there could be a new rule requiring such "potential"
employers to cover their backs by asking their potential employees to
supply their UTR so that these can be forwarded to HMRC so that their
crack tax fraud detection squads can swoop more efficiently.

Question for John: What type of work is involved here?
 
P

Peter Saxton

I suppose there are circumstances in which the nature of the work done
is such that it could, after the event, be held to have been an
employment relationship rather than an arrangement for the provision
of services. Where that happens, i.e. where the "customer" is later found
really to have been an employer, then the employer would be held liable
for any income tax and national insurance which should have been
deducted in a normal employment relationship.

It's conceivable there could be a new rule requiring such "potential"
employers to cover their backs by asking their potential employees to
supply their UTR so that these can be forwarded to HMRC so that their
crack tax fraud detection squads can swoop more efficiently.

Question for John: What type of work is involved here?
I think it would be a good idea if HMRC did require such information
to be provided but unless John is working as a CIS sub-contractor I
don't know of any new rule and it hasn't been mentioned on websites
such as AccountingWeb.
 
S

Simon

John said:
Hi Guys

Here is the statement I got from this accountant;

"According to new rules of Inland Revenue ,Companies can not make payments
to any self Employed peoples unless they provide the inland revenue
self-employed registration number."

Sorry if I have wasted your time but just wanted to be sure.

Thanks

Regards
If it was a new rule, then it would not be from Inland Revenue but would
be from H M Revenue and Customs. IR was done away with two years ago.

Frankly, I wish there was as this would help cut down on the informal
econimy.

If he cant quote either legislation or point to manuals or guidance at
www.hmrc.gov.uk then he is trying to impose his own set of rules.

Simon
 
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S

Simon

Ronald said:
I suppose there are circumstances in which the nature of the work done
is such that it could, after the event, be held to have been an
employment relationship rather than an arrangement for the provision
of services. Where that happens, i.e. where the "customer" is later found
really to have been an employer, then the employer would be held liable
for any income tax and national insurance which should have been
deducted in a normal employment relationship.
I can see your point Ronald but when considering Status, an HMRC
reference is not evidence of self employment. Any Tom Dick or harriet
can write or phone in, claim self employment and, not withstanding
Peters unfortunate clients whose papers are always getting lost, will be
issued with a reference.
It's conceivable there could be a new rule requiring such "potential"
employers to cover their backs by asking their potential employees to
supply their UTR so that these can be forwarded to HMRC so that their
crack tax fraud detection squads can swoop more efficiently.
I do wonder if this is something relating to the managed service company
regulations.

That does sort of require HMRC to have crack teams, and that is an
amusing prospect. In view of the staff reductions and the relocation of
work away from London, the odds of being picked up for a full review are
getting much less likely.
 
J

John

IT support and software development

Ronald Raygun said:
I suppose there are circumstances in which the nature of the work done
is such that it could, after the event, be held to have been an
employment relationship rather than an arrangement for the provision
of services. Where that happens, i.e. where the "customer" is later found
really to have been an employer, then the employer would be held liable
for any income tax and national insurance which should have been
deducted in a normal employment relationship.

It's conceivable there could be a new rule requiring such "potential"
employers to cover their backs by asking their potential employees to
supply their UTR so that these can be forwarded to HMRC so that their
crack tax fraud detection squads can swoop more efficiently.

Question for John: What type of work is involved here?
 
M

Martin

John said:
Hi Guys

Here is the statement I got from this accountant;

"According to new rules of Inland Revenue ,Companies can not make payments
to any self Employed peoples unless they provide the inland revenue
self-employed registration number."

Sorry if I have wasted your time but just wanted to be sure.
As others have said, it's possible this accountant chappy has got confused
with "new-CIS". But he's clearly wrong, since there is no such thing as a
"self-employed registration number". A UTR is not allocated only to self
employed people...

That said, I have plenty of clients whose customers will not use or pay them
until they provide supporting evidence (eg UTR) or a signed statement that
they are s/e and will account for all tax / NI etc. Which is somewhat
laughable, given that it doesn't let the customer off the hook if HMRC
challenges the employment status...!
 
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P

Peter Saxton

I can see your point Ronald but when considering Status, an HMRC
reference is not evidence of self employment. Any Tom Dick or harriet
can write or phone in, claim self employment and, not withstanding
Peters unfortunate clients whose papers are always getting lost, will be
issued with a reference.


I do wonder if this is something relating to the managed service company
regulations.

That does sort of require HMRC to have crack teams, and that is an
amusing prospect. In view of the staff reductions and the relocation of
work away from London, the odds of being picked up for a full review are
getting much less likely.
I wish they'd make use of these "crack teams" to do the basics
properly.

I happened to have a couple of clients with me when I had to made a
phone call and they were amazed at how incompetent the various HMRC
staff were.
 
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