suerye
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If your sister is working for a doctor at his surgery, working the hours he states and is not risking her own capital, then I would say she is not self employed, but an employee. In this case, the doctor is liable to deduct tax and NIC and if this arrangement is discovered, then he will be liable for the PAYE, not your sister. He is obviously trying to avoid paying employer's NIC (12.8% of the salary), as well as sick pay and any other benefits like maternity pay which may arise and I find it quite shameful, especially for a professional person. Is she covered by his insurance should something happen to her on his premises? There are lots of issues here.
The IR will find out eventually as presumably he is putting these payments through his accounts and the Inspector could well query them (although this is not guaranteed).
Other ways the IR could find out is if a third party tipped them off.
She is earning a lot of money tax free - ultimately its her own decision, but I would not have accepted this sitaution in the first place and would have asked to be put on PAYE. If she loses this job (and in her current situation, she has no right to notice, etc) and needs to claim benefits, how is she going to explain this away? |
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dadn33
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The doctor will have to declare that she worked for him for a start, even if he doesn't pay her tax or NI. If she doesn't, he will or should tell her to leave his practice. She's nieve to think that she can get away with it.
She'll get caught out in the end if she doesn't. Two of my boyfriends friends are self-employed. They do their own books but have both been caught out as declaring they don't work as much as they actually do, one has just had to pay £40k.
The Government have employed people to purely catch this type of person out. |
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katehughes2706
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This was a problem for the Inland Revenue as they werent able to track the self-employed earners.
As from this new tax year though, the employer (in this case the doctor) will have to submit a statement to the Inland Revenue detailing how many sub-contractors (if any) he has paid that month and how much. He also has to pay their tax on their behalf. But he can only do this is she is registered as a sub-contractor otherwise he cannot actually pay her.
So it may have been working up to now, but not any more my friend.
She just better hope that she can get away with what shes earned tax-free so far and start getting on the straight and narrow. |
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Lisa
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Its a big risk she is taking sooner or later she will be caught out
All it takes is one argument with a friend/ family member and they could report her out of spite
Does she have children??
If so then she could be easily caught through the tax credits system
How is the doctor going to explain paying out £1400 a month to somebody when it comes to his tax returns( that is if he is self employed)
Inland Revenue also have a right to check your bank, i know this because it happened to me when somebody wrongfully accused me of working whilst on maternity
At the moment she is no better than a benefit thief
You need to seriously speak to her
P.S trust me, when it comes to tax fraud the inland revenue are not overstretched, they will be on her straight away |
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lulu
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Sooner or later, the doctor will want to declare the £1400 as an expense. Sister needs to come clean. |
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Mikey
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When i used to work for the revenue the main way they used to find out is if people called up/Wrote in to say that they think someones being dodgy and not paying tax. Also when the people she is working for completes there tax returns they may put that she is working for them as self employed and not as an employee. They that might lead to someone looking in to it. But only 1 in 10 tax returns get audited the rest of them are just entered in by monkeys who dont care. |
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dollymixture
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National Insurance Numbers and the doctor will be claiming her wage to get it deducted off his tax so they wil check it that way!
trust me i work for an accountant and every client who has tried it got caught - the revenue miss nothing!
She better register now or if they find out she have pay all back! |
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Helen S
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The doctor will be paying tax on his earnings and in his accounts (which get submitted to the IR) he'll put down he's paying wages to someone. They will also have her name form his records. |
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Spiny Norman
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The Inland Revenue are not unreasonable and the amount of tax taken would be very small, if any from this amount. She is better to come clean rather than risk a huge back payment demand based on their assessment!! |
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John Q
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Under current Tax laws your sister cannot be self employed. There is criteria to adhere to and a simple test is as follows: If the answer is yes to each question she is employed and has to insist the doctor treats as PAYE. He could be fined.
Do they have to do the work themselves?
Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
Can they work a set amount of hours?
Can someone move them from task to task?
Are they paid by the hour, week, or month?
Can they get overtime pay or bonus payment?
It is not worth the risk as the revenue will not only seek payment of PAYE but also heavy penalties exist. |
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notmarriednochildren
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As previous answers have said, there are many ways in which your sister can be 'caught' by HMRC. Namely by a 'tip-off' but I think the question that HMRC will ask first is whether or not your sister is actually an employee or a subcontractor.
There are various tests to identify a subcontractor but broadly, you are self-employed if you are in business on your own account and bear the responsibility for the success or failure of that business. If you are employed if you personally work under the control of someone and do not run the risks of having a business yourself.
Your sister needs to contact HMRC immediately and ask to speak to a 'Status Officer' - they will determine whether or not your sister is employed or not. If she is self employed then they will pass her through to the business support team who will help her complete the relievant paper work. She may have to pay a small penalty, however this amount will be mitagated by the fact she has advised HMRC of the situation. If she is determined to be an employee, HMRC's Employer Compliance team will instigate talks with the doctor to bring your sister in the PAYE scheme. |
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Davy B
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She is almost ceratinly NOT self employed and the doctor is probably liable for her tax etc.
It is - however - interesting to see that absolutely everyone agrees how foolish she would be to do nothing. If she does nothing she may well be in trouble for that alone if she "intends" to avoid tax. The revenue can, and do, add penalties... |
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Cheese A
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Do you really want to take the risk that they won't find out 3 or 4 years down the line? Then they will do an audit and find out that you owe thousands which could cripple you!
It is quite likely someone will tip them off, banks will need to see proof of earnings etc and might think its strange that no tax is ever taken.
I like how somebody further down mentions two of her boyfriends were caught out, how many do you have? |
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