i would like some advice. My niece has started doing some part time work for a promotions company wher her average monthly salary is aroun £120.00. However the agency has requested that she submit a monthly invoice to them, thus meaning they are treating her as self employed. When she got paid they had deducted 20% tax from her invoice however she will be earning below the personal allowance of £7475 therefore she will be paying tax each month when she shouldnt have to.
As self employed she should be responsible for submitting her own tax returns and paying her own tax.
As far as i can see this is not correct what the agency has done, can someone confirm please
Sounds as though the agency is treating her as per CIS rules.
I think someone needs to tell the agency that not everyone that is self employed is covered by the construction Industry Scheme (and this doesn't sound like a construction company to me).
To my understanding your neice should either receieve the full amount without deductions and be responsible for her own tax affairs OR be treated as an employee.
Are you sure that the company was after an invoice or is there some mix up here with things getting lost in translation between the company and yourself via your neice and this is actually a timesheet rather than an invoice that is being requested?
Just a thought on that last one,
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I thought that an agency worker, although not classified as an employee, was classified as a "worker" for employment law, and if they are hired by an agency, are covered by normal employment law (min wage, holiday pay, anti-discrimination, no unlawful deductions, working hours regs etc), and the agency are required to operate PAYE/ NI for the "worker".
If the agency are only acting as an introducer, they are an employment business, which is not the same as an employment agency, and can charge an introduction fee.
Like Shaun says, it is probably a mis understanding somewhere along the line. I suspect it was a timesheet they are requesting, and it is possibly a payslip that is showing a BR tax code. If she works elsewhere, or for other agencies, then this would right., as one of the other "employers" will be using her allowance code. If not, then the agency may have have or on week 1/ month 1 coding until they get a code from HMRC
The other thing that might help Keely, is if she's asks her niece if she completed a P46 and if so which statement she ticked? Then as Bill said you can tell if the correct tax code has been used.
__________________
Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Thanks for your replies. There was no misunderstanding as I saw the emails they sent her and they asked her to submit an invoice. I told her what to email back to them quering this and thry said they don't need a p46 as she is not an employee and she will be issued with a p60 in april and will have to claim back tax however if she is not an emplyee they can't issue a p60 can they? I said same that they are treating her like cis which it is not. They didn't send her a payslip they sent a remittance adcvice. Any more ideas
It sounds like they're making it up as they go along! You are right, a P60 is for employees. I think we all know what the correct and proper thing is - employment - but they sound rather amateur. Do you suspect that if she starts making a fuss, she won't have a job?
have double checked with hmrc and yes they have confirmed what we have all said on here that if she is self employed she needs o do her own tax return hence no tax deduction or she should be on payroll. yes i think they are making it up but as my niece is only 17 maybe they think they can get away with it.
One of my ESCa19 cases was due to a national newspaper that couldn't be bothered operating PAYE. I suppose, it's easier just deducting 20%. She can write to the tax office requesting an 'in-year' repayment claim. If nothing else, it might prompt HMRC to police this firm properly. Tim
.
