Government planning PAYE crackdown on contract workers

werner

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Just noticed these interesting posts...

I am curious!

Has anyone had experience of losing a contract becuase Revenue decided that the "self employed" status of a contractor was wrong and that they were to be treated as an "employee" and as a result of Revenue's action their contract was ceased and that they have lost their income and are now being paid unemployment assistance?
 

mandelbrot

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That sequence of events is unlikely to happen. The service contract that exists would still be valid, regardless of how Revenue decide it is to be treated for tax purposes.

In the event that Revenue determine it is an employment rather than self employment, I'd imagine what would normally happen is that the two parties to the contract agree a new one that gets around the Revenue issue, or agree on an employment contract for the employer to take the contractor on as an employee.
 

T McGibney

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That sequence of events is unlikely to happen. The service contract that exists would still be valid, regardless of how Revenue decide it is to be treated for tax purposes.

In the event that Revenue determine it is an employment rather than self employment, I'd imagine what would normally happen is that the two parties to the contract agree a new one that gets around the Revenue issue, or agree on an employment contract for the employer to take the contractor on as an employee.
A tad optimistic, I think. The company might instead determine that its either too risky or expensive to employ someone to carry out a specified task or role, so they would just terminate the contract and either outsource the task to another business or delegate the task to a member of in-house staff. I know of some businesses that have got rid of contracted bookkeepers and outsourced their payroll and internal accounts function to accounting firms, for this precise reason.
 

mandelbrot

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A tad optimistic, I think. The company might instead determine that its either too risky or expensive to employ someone to carry out a specified task or role, so they would just terminate the contract and either outsource the task to another business or delegate the task to a member of in-house staff. I know of some businesses that have got rid of contracted bookkeepers and outsourced their payroll and internal accounts function to accounting firms, for this precise reason.
Fair point
 

werner

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A tad optimistic, I think. The company might instead determine that its either too risky or expensive to employ someone to carry out a specified task or role, so they would just terminate the contract and either outsource the task to another business or delegate the task to a member of in-house staff. I know of some businesses that have got rid of contracted bookkeepers and outsourced their payroll and internal accounts function to accounting firms, for this precise reason.
Thank you for the reply, I have heard of something quite similar and I wondered was it "hearsay" or was Revenue really in the business of decreasing employment (or self employment) resulting in putting people on social welfare payments whilst cutting its own tax base. After recent Revenue debacles nothing would surprise me!
 

mandelbrot

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Thank you for the reply, I have heard of something quite similar and I wondered was it "hearsay" or was Revenue really in the business of decreasing employment (or self employment) resulting in putting people on social welfare payments whilst cutting its own tax base. After recent Revenue debacles nothing would surprise me!
How do you figure that is the case?

The choice in the scenario is the employer's - they choose whether to hire, contract, or outsource. Revenue are merely applying / enforcing the law as it pertains.

Even in the case where as Tommy suggests, the decision to outsource is made, as long as it isn't outsourced abroad then someone somewhere will still have to do the work and be paid for it, so I don't think it necessarily follows that unemployment increases. It may, but it doesn't necessarily. And if it does, you can't blame Revenue as the agent of the State, it's an issue for the politicians / legislature.
 

invest-or

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