Disguised employment

[TommyGG]

Hi there,

I can't find much info on disguised employment, my questions are:

- How long would you have to contract for before you might be questioned for disguised employment?
- Does the same apply to contracting foreign labour?

Thanks!

 

[maxine]

Hi

Try googling IR35 as I think this may be the reference term you are after

 

[sjbeale]

You would have to wait until HMRC picks up on it - could be sooner could be later, but if you are acting illegally it could cost you dear. Best to get your employment status sorted out now with written agreements puts in place and using labour appropriately.

 

[kyeb]

Hi Tommy

With regard to the first question, do you mean how long is it likely to be before you get challnged by HMRC or how long can a subcontractor work for you before it might be considered 'employment'?

If it is the first, as SJBeale has pointed out, it could be anytime and is really pot luck as to when you get a compliance visit from HMRC.

If your question is how long can a subcontractor work for you before they would be deemed an employee, this is not a key factor in deciding employment status. HMRC will tend to focus on this point if it is in their favour but the courts do not attach a great deal of weight to it. Naturally it is easier to argue someone is self-employed if they have only been with you weeks/months rather than years but this it is not something I would focus on.

There are other key factors you should focus on when considering employment status rather than this such as personal service, control etc.

If you contract with individuals that work through their own limited companies, IR35 kicks in rather than 'employment status' and any potential liability then becomes their problem not yours.

Contracting with foreign labout would not make any difference to the above.

Kye Burchmore
Marble Commercial Contracting