ricgem2002 Posted June 15, 2012 Share Posted June 15, 2012 someone who works with us as a agency worker has taken the employment status indicator test on the tax office website and has now being classed as a employee. ive told him to be carefull about how he stands now as regarding paying tax. the agency still says he is self employed but the tax office website says hes an employee whats he to do about this anyone know ? Link to comment Share on other sites More sharing options...
Ghostrider Posted June 15, 2012 Share Posted June 15, 2012 As an agency worker, he will pay tax, therefore he is an employee - the agency just class them as self employed (im in the same boat) Link to comment Share on other sites More sharing options...
taxman Posted June 15, 2012 Share Posted June 15, 2012 someone who works with us as a agency worker has taken the employment status indicator test on the tax office website and has now being classed as a employee. ive told him to be carefull about how he stands now as regarding paying tax. the agency still says he is self employed but the tax office website says hes an employee whats he to do about this anyone know ? Traditionally an agency worker is an employee of the agency, the agency must operate PAYE, not the end client. The water gets muddy if the "agency" isn't a normal run of the mill one but is one supplying workers through a "managed service company" or is just an introduction agency. It all depends on the definition of "agency" in this case. Also, the Employment Status Indicator on the website is not foolproof. Depending on the answer to the first question you may or may not get follow up questions, some questions hold more sway than others and a lot can only be answered by not applicable. Status - a nightmare! Link to comment Share on other sites More sharing options...
ricgem2002 Posted June 15, 2012 Author Share Posted June 15, 2012 As an agency worker, he will pay tax, therefore he is an employee - the agency just class them as self employed (im in the same boat) at the moment he is paying class2 national insurance stamps ,but if the tax man classes him as a employee shouldnt he be paying a higher rate towards nic? Link to comment Share on other sites More sharing options...
ricgem2002 Posted June 15, 2012 Author Share Posted June 15, 2012 Traditionally an agency worker is an employee of the agency, the agency must operate PAYE, not the end client. The water gets muddy if the "agency" isn't a normal run of the mill one but is one supplying workers through a "managed service company" or is just an introduction agency. It all depends on the definition of "agency" in this case. Also, the Employment Status Indicator on the website is not foolproof. Depending on the answer to the first question you may or may not get follow up questions, some questions hold more sway than others and a lot can only be answered by not applicable. Status - a nightmare! i understand what you are saying but if the tax man decided to investigate this further and found out that he was a employee (again according to the employment status indicator)would the tax man be after this person because he wasnt paying the right amount of tax ? also who could he report this to if he thinks he could be in trouble ? Link to comment Share on other sites More sharing options...
becky_s Posted June 15, 2012 Share Posted June 15, 2012 someone who works with us as a agency worker has taken the employment status indicator test on the tax office website and has now being classed as a employee. ive told him to be carefull about how he stands now as regarding paying tax. the agency still says he is self employed but the tax office website says hes an employee whats he to do about this anyone know ? Actually, they are likely to be neither an employee nor self employed. They are likely to have "worker" status, which means less employment rights than employees. Link to comment Share on other sites More sharing options...
ricgem2002 Posted June 15, 2012 Author Share Posted June 15, 2012 Actually, they are likely to be neither an employee nor self employed. They are likely to have "worker" status, which means less employment rights than employees. after working for the company for 12 weeks they are supposed to have the same rights as an employee according to this website http://www.direct.gov.uk/en/Nl1/Newsroom/DG_199272 Link to comment Share on other sites More sharing options...
taxman Posted June 15, 2012 Share Posted June 15, 2012 i understand what you are saying but if the tax man decided to investigate this further and found out that he was a employee (again according to the employment status indicator)would the tax man be after this person because he wasnt paying the right amount of tax ? also who could he report this to if he thinks he could be in trouble ? The taxman would not be after the individual. If he was deemed to be an employee, either of the agency or the end client, then it is the engager's responsibility to operate PAYE. Therefore we would go after the employer for PAYE tax plus class 1 employers and employees National Insurance. after working for the company for 12 weeks they are supposed to have the same rights as an employee according to this website http://www.direct.gov.uk/en/Nl1/Newsroom/DG_199272 That is to do with employee rights, holidays, sick pay etc. So an agency worker (employee) will have the same rights as other workers (employees). A different question to the one being asked, whether someone is Self Employed or Employed. Employment rights do not apply to self employed people, whether they've been engaged for 12 weeks or not. Link to comment Share on other sites More sharing options...
ricgem2002 Posted June 15, 2012 Author Share Posted June 15, 2012 The taxman would not be after the individual. If he was deemed to be an employee, either of the agency or the end client, then it is the engager's responsibility to operate PAYE. Therefore we would go after the employer for PAYE tax plus class 1 employers and employees National Insurance. so should he inform the tax office about this agency he works for ? Link to comment Share on other sites More sharing options...
taxman Posted June 15, 2012 Share Posted June 15, 2012 so should he inform the tax office about this agency he works for ? Meh. He will be losing out by not being in PAYE because he won't be getting his National Insurance paid. Which means if he tries to sign on at any time he won't get full income support. Plus his pension will be affected. If he is happy being "self employed" and doesn't mind his NI contributions not being up to date then why rock the boat and risk losing his job? What usually happens is that people are happy being paid gross and treated as self employed until they either try to claim benefits or they fall out with their "boss", then they come to HMRC who will investigate, and if HMRC decides that they should have been an employee they will deem their National Insurance contributions as paid so they can still get their full pension/benefits etc. Edit. But in strict answer to your question, yes he should. Link to comment Share on other sites More sharing options...
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