Stupid Question About Increasing Jobs in Private Sector

Because it would be illegal under tax law. Not necessarily under employment law, but under tax law.

Remember IR35 (or whatever)?

No.

The relationship between an employer and a person providing services to that employer has to be that of master/servant rather than purchaser/contractor.

It's all pretty settled law.

Yes that's the thing I don't understand!

Since when? PAYE? There is a great call for the unemployed to scour the streets looking for work - which I agree with. How does anyone do a couple of days casual work without breaking these settled laws? This is why I said it's a stupid question - I am assuming everyone else knows except me! I imagine that if employers could simply directly employ someone for a week or two, or even a year, and not have to worry about the government related financial implications or employment rights, the amount of available work would increase dramatically.

There's plenty on the net about it. It'll explain it better than I can, but the basic position is that self-employment may not be used as a "sham" to disguise what is in reality an employed job - and particularly not in order to avoid or evade taxation or NI.

The distinction (AIUI) lies between a contract for service (employee) and contract to provide service(s) (contractor).

I suppose so.

Casual work - *genuinely* casual work - would be treated differently.

I expect you're right, but that the standard political answer is that more advantage would would be lost by such a move than would be gained by it.

this is the government you're talking about...it is terminally incompetent....and is getting more so by the year... and ever more expensive!

"HMRC has a backlog of 18 million PAYE cases, affecting an estimated 15 million taxpayers. The exact amounts of tax involved are not known, but estimates suggest £1.4 billion of tax was underpaid and £3 billion of overpaid tax is due to be refunded. So complicated has the tax system become as a result of Gordon Brown's obsessive tinkering, that HMRC did not even understand the impact of the Finance Act 2008 on its own deadlines for collecting tax. As a result, it is now unable legally to collect an estimated £650 million in underpaid tax."

there are other linked items at that addy...

regards

It would be interesting to know whether it is at all possible nowadays for people who are living on the streets to get casual work. I remember it being quite easy to get work by turning up eg at the kitchens of large hotels early in the morning, and labour exchanges sending people out for a days work with few or no formalities. For those at the very bottom who may not be able to hold down a permanent job perhaps due to drug or alchohol abuse, or mental health problems, I would have thought that easy access to this type of work would be a good thing and not least reduce the temptation of falling into crime.

j

That is indeed the (or a) basic position, but is not what IR35 is about. IR35 is, AIUI, specifically about using limited company wrappers to disguise what is basically self-employment (or indeed employment), and particularly in the case of husband and wife companies where one does all the work and the other does a couple of hours of admin a week, and avoiding tax by in effect sharing the income equally while the input of work (or other stuff like expertise or invested capital) is very unequal.

Don't worry about it. It's irrelevant as it only applies if the worker is operating as a limited company.

But the earlier poster is correct, deduction of PAYE from source is a mandatory requirement for an employer/employee relationship.

What is an "employee"? Well that another matter! But you don't (not) become one just because the employer says so and if the employer gets it wrong, then he is one who has to make up the missing back tax. So it is (usually) not in the employer's interest to make an incorrect assessment.

tim