but no contracts between Solutions and STL or any other construction companies. The terms on which the appellant contracted with STL were reasonably standard.
The ruling laid out a hypothetical contract from their findings, summarised as follows:
• Mr Daniels is not controlled any more than any other contractor and could refuse to work on another site • there was a contract for personal services as Mr Daniels could not provide a substitute to STL (even if Solutions contract said he could). • Mr Daniels was paid £310 a day and had to pay his own travel, hotel and other expenses. • Mr Daniels took no other financial risks • There was no requirement on either party to give notice to terminate or entitlement to severance pay or pay in lieu. • STL provided safety equipment to Mr Daniels • Mr Daniels was not integrated into the STL business “We do not accept HMRC’s arguments about control but do agree that the requirement for personal services and lack of financial risk point to an employment relationship. However, we find that the nature of the payment arrangements, a flat rate per day with no notice period and no entitlement to any employee benefits are inconsistent with employment. Further, Mr Daniels was not treated as an employee. On balance we find that under the hypothetical contract required by the Intermediaries Legislation Mr Daniels would not be an employment contract and so this appeal is allowed.” The Tribunal judge ruling the case said:
The detail of this second significant ruling this year, can be read here - MDCM LTD v HMRC.
In February this year Christa Ackroyd, a former co-host of the regional Look North programme on BBC One, lost her IR35 appeal. HMRC said that she should have paid the same level of tax as a BBC employee and was ordered to pay back £419,151.
Many BBC presenters are under investigation for alleged tax avoidance by using personal service companies to register as self-employed thereby minimising their tax bill
Back to Contents
IR35 check employment status for tax (CEST) tool 1 May 2018
We would like to draw your attention to an article from article from Accounting Web which indicates that public sector bodies are ignoring the results of the HMRC employment status for tax (CEST) tool and may have deducted incorrect amounts of tax and NI from contractors. Background From 6 April 2017 changes came in to affect to the way intermediaries legislation (IR35) is applied to off-payroll working in the public sector. Responsibility for operating the off-payroll working rules, and deducting any tax and NICs due, moved to the public sector body, agency or other third party paying an individual’s personal service company (PSC). HMRC provided the new CEST tool to be used to find out if a worker on a specific engagement should be classed as employed or self-employed for tax purposes. HMRC will stand by the result given unless a compliance check finds the information provided isn’t accurate.
According to the Accounting Web article a freedom of information (FOI) request revealed how many times the CEST tool was used at its peak between March and October 2017 which indicated that the service was certainly being used by public sector bodies. However the CEO of the company ContractorCalculator who made the FOI request is reported
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
Page 429 of 598
Made with FlippingBook - Online magazine maker