seafarers earnings deduction, taxman headache

[rovnumpty]

Thanks for the info xxx.

I’m still in the same boat, but my claim has been passed to the self-employed adjudicator for inspection.

I’m hoping for a bit of sense from them. Acoording to my accountant, it’s usually very difficult to prove to them that you ARE self employed!

If they find in my favour, hopefully this will be enough for Centre 1, and set a precedent for everyone else.

Haven’t received the promised letter from UKPS yet though.

If things don’t work out though, I’ll definetly be looking at getting a legal case togther.

And invoicing UKPS for the £30 odd a day they were taking off me for being PAYE over self-employed.

[James McLauchlan]

I have recently been contacted by Steve White from YourTaxOffice.co.uk

Steve has advised that he will shortly be joining this forum with a view to assisting people in their claims for Seaman’s Tax and what ever else is required by our members.

Initially, a couple of day ago, Steve contacted me.

I would like to offer my company\’s services to your membership as having read some of the forum comments we may be able to help some people. Can we advertise or offer advice ?
Regards, Steve White

After Steve’s Initial inquiry to me I responded with:

Steve

As long as your company has specialist knowledge in this matter, which would prove of benefit to Forum members, then I have no problem with you posting and offering your services or contact details.
It would help if someone like yourself with this kind of knowledge would respond and possibly pick up some clients in the process by way of return.

Best regards
James McLauchlan
Webmaster ROVworld.com

Steve wrote:

We have much experience dealing with seafarers Tax and I am sure your members will benefit.

With the above in mind [hopefully] we will have a source of knowledge to hand which will prove to be of use to our Forum members.

Of course nothing comes free in this world, so I would assume that should you require financial advice out-with this forum usual accountancy fees will apply.

Whilst I could see Steve White offering some general advice in the Forum I would suggest that members contact him off-line for more specific advice concerning their own personal circumstances.

Any feedback on Steve’s services would be appreciated.

[Ray Shields]

Given the minefield that UK tax (and norwegian tax, wonder if they’re any good at that??) is any professional advice would be greatly received by all members.

There are always so many stories of what is and isn’t the case between different peoples experiences and "I read it somewhere on the Internet"

🙂

[Steve White]

Thanks for the intro James. General advice is free for ROV members so if you have questions please contact me.

[Buffel]

Just to let you know whats happening..things have come to a head. I am now awaiting details for HMRC’s reasoning behind the decision to classify myself and others as Self Employed (other than UKPS’s very helpful letter to HRC stating that we were Self Employed!).After that I will need to seek legal advice as I am also waiting a date to go before the Commissioners.UKPS letter finally arrived,another example or prime fence sitting..although they do now admit that this is likely to cause major problems for many people and that they knew in 2005 that we had been re-classified but choose to remain silent on that(they still do,speak to any PAYE worker for UKPS and you get the head in the sand approach,"oh yeah I have been told that wont affect me!" when I get a chance I will put Chris Kemps letter on here showing that he thinks that YOU MAY WELL BE AFFECTED.The number of people being investigated also continues to grow.
I am sending all the details to the RMT this week as I they feel that this needs further study to see if they can become involved both in dealing with the legal side of HMRC and also to see if anything can be done with regards to UKPS.UKPS have been extremely dishounourable in this issue,they had known for 2 years of the re-claassification yet chose to remain silent.Losts of moral support on the phone but nothing but delaying tactics as they appear to cover there own backs.The end is nigh…but paying a lawyer £250 per hour to recover from a mess that UKPS has created is a pisser,especially when things really are hanging in the balance as to who is right!
Meanwhile I have had 2 bills through the door,asking for immediate payment plus interest,and if not paid within 30 days add another 5%.

UKPS,thanks for that..you could have avoided all this 2 years ago!

SO.. UKPS SELF EMPLOYED..PAID GROSS
UKPS PAYE (ALSO SELF EMPLOYED) DEDUCT 11.8% FOR EMPLOYERS NI FROM THE GROSS AND YOU GET YOUR DAYRATE. JUST DONT EXPECT ANY OF THE BENEFITS OF EMPLOYED STAUS AS YOU ARE NOT,AND NONE OF THE BENEFITS OF LTD COMPANY. YOUR GETTING SHAFTED.

Another benefit of now being staff,none of the above applies from my start date onwards,so no point in being Agency PAYE is there!!!

[xxx]

Buffel

If UKPS knew about this change in status 2 years ago they have committed fraud and your employment under PAYE is illegal under the unfair contracts acts. Lawyer may seem expensive but in the end UKPS should be footing the bill. Everyone should get together get one solicitor between you, fight the taxman and sue UKPS!! After all they have been stealing your money!! The only way to find out exactly where you stand and who is actually at fault is to seek legal help. It may be cheaper in the long run.

On a personall note I think this is a horrible situation and feel for everyone involved as if it wasn’t for a change in my circumstances 4 years ago I would be PAYE agency worker having 4 years tax back to find.

Good luck guys remember strength in numbers and the legal bill is split so much cheaper.

[Buffel]

XXX I intend to seek legal advice as soon as HMRC get back to me with exactly why they have made this decision.At that point I shall make enquiries as to what action can be taken initially with regard to the Commssioners (first things first) and then UKPS,I feel that they have treated people shockingly (and continue to do so). It looks as if I am at the head of the race to the Commissioners and being HMRC it will be dealt with on a case by case basis although I suspect that one case will set precedent here.
The way I feel with regards UKPS cannot be put here for legal reasons….suffice tp say.ARSE!

just waiting for the date for the ribunal and get this all sorted one way or another.

[James McLauchlan]

I hate seeing an individual suffering like this.. it smacks too much of the corporate big stick beating the little man.

Buffel
Whilst I understand that you may have to be careful what you say here in the open I have a couple of questions that you may wish to ponder over, and might suggest the uni0n look into. Some of what I am about to write you may have already been through, but anything that may give you another angle might be of use.

Read which ever company name you wish into the instances of employer I use.

• Assuming that employer have been deducting class 1 National insurance from your ‘salary’ have they been passing that full amount on to the authorities or, if they knew you were legally self employed, have they passed on a lesser amount?

A check with your local Social security office (or what ever they call it these days) that deals with such things should be able to tell you what NI contributions have been recorded in your name.
I would suggest that if what you thought was your employer has been paying a full class I amount you should be entitled to a refund of the difference at some point. Not to be sniffed at.

• Was your employer legally correct to employ you on a PAYE basis?
• Was your employer legally correct to deduct Class I NI or should you have only contributed at a self employed NI level?

Bearing in mind that it seems, by their own admission, that employer in question knew you were self employed.

• Were you issued with a P60 when starting your ’employement’?

If so I thought a P60 indicated that you are in the employ of a company.

• Were you issued with a P45 when leaving your ’employement’?
• If the HMRC are saying that you are self employed then you should at least be able to dispute the tax bill on the basis that you were unaware that you were self employed and need to seek legal advice.

I would try anything that may a) push the payment date back & b) give scope for renegotiating the size of the bill.
They may simply say that you should have sought financial advice years ago but it’s still worth asking.

With regard to the recent tax demands. I would think that you may wish to seek advice that may enable you to dispute these demands. That may at least give you a stay of execution on the payment date until an agreement is reached.
Push the Uni0n hard on this.. that is why you joined. You may not have the money to fight it but all the other uni0n dues are there for this reason…. to help people fight a just cause.
I would also suggest that you do not just ask the Uni0n a few questions every now and then but push them to appoint a lawyer to your case.

[Buffel]

James

Thanks for your input,the NI aspect is something that we have been discussing.If we are classified as Self Employed,have UKPS in fact paid the correct amount of NI on our behalf? As we received a lower dayrate as PAYE we paid NI on the lower dayrate,but the big question is did UKPS then pay employers NI as they say they did or are we now due to pay or get back any differential between Self employed NI and whats been paid.The RMT are going to be looking over the info I am sending,but at the moment there is no word as to what if any actions may result. I am going to certainly require Legal assistance.

I know that I am not alone,there were in excess of 40 people a few months ago. some of whom I know.stick a post on folks ,it may be that at some point a group action may be required?

[Steve White]

Buffel, the legal route is the only resolution to this. All parties need to be drawn into the same arena to force full disclosure. This won’t happen for as long as you are dealing with HMCR independantly. They will continue to pursue you despite the third party’s actions for as long as they believe they can force you to pay up. That will be their main focus. Of course, a specialist lawyer is needed but also Counsel’s opinion sooner rather than later. Counsel can at least give you a view on whether you have a strong enough case in Court.

The very best of luck…I hope you can get the support you need from the Uni0n as this is likely to be protracted and expensive. The Revenue have a habit of spending tax-payers money on lost causes. They recently spent around £80k (actually they didn’t keep any records of what they did spend so this is a rough estimate !) chasing an alleged £7k debt from a couple running their own small business…..the Revenue lost !….

[Buffel]

Steve

I will be seeking legal advice as soon as I have in writing the revenues reasoning behind the decision,without this I feel I would be wasting time and money. I have requested an appeal before the Commissioners and am just awaiting a date for this,but HMRC have been slow (surprise) in getting back with either the info or a date although I beleive that they must reply iwthin 45 days of notification of appeal. I spoke to the Revenue wallah a week ago and he had just recieved the file back from higher up the food chain but no indication as to what action was to follow,just that he would be writing to myself and SK Tax in due course….I have also requested a postponenment of payment until the issue is resolved.

From info that I have from others involved,decisions on other cases are pending the result of the Commissioners decision,but in the meantime they continue to spread the net wider.

[James McLauchlan]

Of course, a specialist lawyer is needed but also Counsel’s opinion sooner rather than later. Counsel can at least give you a view on whether you have a strong enough case in Court.

Steve’s advice was on the nail in IMHO but the above stood out.
It’s quote refreshing to have in house input like this! Cheers.

Buffel
You may be wasting valuable time waiting for a reply from HMRC. I would suggest that you take Steve’s advice above.. and push the RMT to obtain councels opinion on your case before HMRC even get back to you.
You could be the test case that is needed.

[GraemeRSU]

I strongly Suggest you go to the following website and read section ESM2000 for agency workers.

http://www.hmrc.gov.uk/manuals/esmmanual/Index.htm

This is the HMRC’s Employment Status Manual and has been used to determine whether you are an employee or self employed in relation to working through an agency (ref Section ESM2000). Make sure you read the fine print on the website though as the information may possibly not be 100% upto date. It may however help to assist you to solve the issue that you are having with the tax man.

I have also posted a few links from the Directgov website which discusses agency workers and their rights as well as employment status.

http://www.direct.gov.uk/en/Employment/Employees/EmploymentContractsAndConditions/DG_10027514

http://www.direct.gov.uk/en/Employment/Employees/EmploymentContractsAndConditions/DG_10027916

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10010537

It would probably be a good idea to become familiar with the above government published information and see how it relates to your agency contract, before discussing your situation further with the taxman.

[Savante]

Buffel

Had a chat with HMRC this morning and jotted this crud down from them. I can’t make head nor tail of this stuff anymore.

Under Section 44 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) the special rules enable the remuneration receivable by workers working through an agency to be treated as though they were earnings from an employment with the agency. The legislation broadly states that where:

an individual personally provides, or is under an obligation to provide, services to another person; and

the services are supplied by or through a third person (”the agency”) under the terms of an agency contract; and

that person is subject to (or to the right of) supervision, direction or control as to the manner in which the services are provided; and

remuneration receivable under or in consequence of the agency contract does not constitute employment income of the worker,

those services are to be treated for income tax purposes as duties of an employment held by the worker with the agency. PAYE should be operated on all remuneration receivable by the individual under the agency contract.

Quoted from HMRC…

"If you are employed you would have a P60 from the company. You’ll have filled in a P46 when started or you would have given them P45 – they take off NICS class 1 and tax. They use an appropriate code from IR – this would tend to indicate that you are employed."

Sounds like he is employed – he needs to obtain the IR205. Work his way though the document – see how he can claim FED."

http://www.hmrc.gov.uk/pdfs/1999_00/helpsheets/ir205(s).pdf

Very often the tax office will have pre-empted and issued a code.

May also be worthwhile looking at centre for non-residence. Tel: 0845 – 070 0040. Income tax and capital gains tax. (If <91 days in any one tax year.)

How are you getting on in your endeavours anyway
??

[Savante]

what I’m not sure is if the terms "treated for income tax purposes" includes purposes of SFED?

30 quid buys you a limited liability company – up your day rates if you handle your own tax – worth about 15-20 squid/day on average!

[Author]

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