Case Studies

• Mistake when filling in a tax return
• Who is self employed and problems with IR35
  
• Unexpected bill follows PAYE visit
  
• VAT visits

Employment status

John was a builder who worked with a team of men on building sites when- and where-ever they could. Usually, he would get a phone call in the morning, pick up the men and take them to the next job. This arrangement gave them the freedom to work as they pleased.

They had found a building site near home, and been working there for about six months when John was approached by someone on the site. The man introduced himself as a Status Inspector from HM Revenue and Customs. He asked a number of questions about who they were working for, how long they had been there, how they were paid, and whether or not they received holiday or sick pay. The next day, John got a call from his boss at the building company, wanting to know what he had said to the Inspector. John answered what he could, and his boss seemed very annoyed.

His boss got in touch with Tax Champion. We went to visit the site, and interviewed him, John and the other subcontractors. HMRC wanted to prove that the subcontractors were all employees, but the additional tax and National Insurance contributions would have bankrupted the building company. By collecting the evidence, we were able to prove that none of the subcontractors were employees: there was no mutuality of obligation, one of the three key tests of employment. The company survived, and John was able to carry on choosing when and where he worked.