PAYE and Self Employed

Are you working in the construction industry? There are special rules for self-employed contractors in that field.

No, not in any special category, and I work for several companies during the week and none gets more than 50% of me.

In that case, perhaps the extract "subject to income tax and national insurance deductions as required by the relevant authorities." is to be interpreted not as saying they will make the deductions (given that they have no way way of knowing how much will be due) but as warning you not just to spend all the money because *you* need to make deductions so that you can pay your tax bill.

Other than in the construction industry I haven't heard of anywhere where "the relevant authorities" require a customer to make at-source deductions of income tax and NI from a contractor's pay.

Thanks for the comments. I suppose that they have to have a clause to cover themselves in case the rules change.

This seems a bit odd. You say that you are self employed, I assume that you mean as a sole trader. Is the company engaging you the client or an agent. It seems that you are being taken for a ride. You are a self employed contractor but getting PAYE deducted. Why can't you be a limited company? At least you will have the flexibility or arranging your own affairs. I don't see how the agent/client can dictate your employment status? Surely you are either an employee, an employee on a short term contract or self employed on some sort of self employed status, ltd or sole trader. I know that agents wont touch sole traders and clients are also a bit iffy about it. If you are not an employee how can they deduct your tax and NICs.

Kevin

If the agent/client wants an employee they will only accept an employee status.

Client.

I thought it sounded odd, and I assumed that they just send out the same forms to everyone as it is too much trouble to select the right ones. (In the same way that the Inland Revenue will write and tell me that I have nothing to pay, and enclose an SAE for me to send the cheque in). I just wanted to get some opinion on it. I will see what happens as things progress.

But the client is taking him on as an independent contractor and not as an employee. I have never heard of an independent contractor having paye deducted by the client or agent unless they were extremely gullable or green.

Kevin

You said: "I don't see how the agent/client can dictate your employment status?"

I was replying to that.

Quote "If the agent/client wants an employee they will only accept an employee status".

If the client want an employee why don't they take on an employee, ie with an employee contract of employment. They have however specifically said that they want an independent contractor but treated them as an employee for deduction purposes. Sounds as though they want the best of both worlds. Depending on how desperate the op is I would tell the client to shove it.

Kevin

I think you were discussing the specific case and I was talking generally.

The contractor should send the documents back with a covering letter saying it doesn't apply in this case because he's not an employee.

That was my intention.

Great. Let us know how you get on.

Good luck.

When I seek to engage the services of a business or tradesperson, they tend to tell *me* what their terms of business are, not the other way round.

Same here. Next time I engage a plumber or my accountant sends in her bill I will deduct paye and see what reaction I get.

Kevin