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Tax and VAT case study
Our client employed a number of sub-contractors. The Inland
Revenue did a status enquiry review and deemed all sub-contractors were
to be treated as employees and that their decision would be retrospective
back to 5 April 1997.
With ten sub-contractors with average tax liabilities of
between £2,000 and £3,000 our client was facing possible bankruptcy
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Following the advice on the telephone, and a copy
of a pro-forma contract faxed to the accountant, he was able to
re-negotiate the terms and the inspector eventually agreed they
were self-employed.
This resulted in an annual saving of £10,000 (Class
1 NIC).
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