Employed or Self-Employed? How will Inland Revenue React?

Question

I signed a contract to say I'be self employed, I even saved all my tax and paid all my NI. However, when I went to an accountant he poiinted out that it looked strangely that I was employed, or should be employed for tax purposes. I took an ESI test, and that said I'm employed. I have since written to the Inland Revenue requesting they tell me whether I am employed or self employed. HOWEVER. my accountant reckons I might be unlucky and get fined as he already submitted my tax self assessment tax return. HE is the one who did the cosmetics to gloss over the fact that I didnt have an self employed expenses, and my book keeper has my original accounts to prove it, so why should I be fined? Also, at the time I thought I was self employed and took action accordingly, ie saving tax. Accordingly, when there was doubt, I sought advice from the IR. Does anyone know what is the likely outcome here given I am blatantly employed legally speaking.

Answer 1

Anyone who returns their self assessment tax returns late or totally wrong will be fined.

Answer 2

hmm tricky, but it looks like you may have a case against the accountant for being a bit crooked lol. i know all are as i used to work for a private practice but at the same time, the liability for getting the tax return right is down to you as you were the one that signed the return and must of know it wasnt right at the time.

If you sort advice from the IR before starting self emp, do you have a record of the phone calls/letters etc.. and the name of the person you spoke to? This will help in your defense. They should have a record on your file if they recorded it all correctly and that you gave them all your details such as NI number.

by the sounds of your situation, it appears that you must of worked for 1 person or company, you used their tools and not your own and they also paid for transport to and from site.

the main to indicators i use to determine self emp status is whether you use your own tools and work for one entity for more than six months. if you dont have tools and worked for same entity for more than 6 months then it is very likely you will lose out to the IR.

If the IR come down hard on ya and you are "unlucky" then you should be able to make a claim against the accountants to cover and fines and penalties.

normal outcome is that additional tax and NI will be paid by yourself and also the company you worked for will pay too as employers NI will be due. On top of this there maybe penalties for incorrect tax return, interest on tax and ni due etc...

wait and see what happens and if you here anything from the IR and should it come to the worst, seek legal advice.

I would however take steps to rectify your position with the company you work for if you havent done so already.

Answer 3

Sounds like you might have a case against your accountant.

Check out their regulatory body at http://www.accaglobal.com/professionalstandards/