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Being forced to become a casual worker
Hi, I hope one of you kind people can help with my question. I also hope this hasn't been asked before - I've had a good look and can't find a similar question.
I have been freelancing as a magazine editor/writer for about a decade, having set up a Limited company in 2003. I sometimes work from home when writing, but mostly work in other companies' offices away from home when editing layouts etc.
My company submits invoices to these companies and it pays me a basic salary each month, with the bulk of my income coming from dividends three or four times a year. My company also makes monthly NIC contributions and, naturally, pays corporation tax each year.
Last week I was called into a meeting at one of the companies I provide services to (Haymarket Publishing) and was told that from 1 Jan I will be treated as a casual worker and have my tax deducted at source by Haymarket. I'd heard about this happening to others at Haymarket who operate as sole traders, but thought it wouldn't apply to me.
Haymarket supplied me with a copy of their new company policy on the 'treatment of non-established and casual workers'. It appears that the key condition for them being able to deduct my tax at source is that I 'use the company resources' by working at one of their workstations with one of their computers. Other contributors/suppliers will be allowed to continue invoicing Haymarket if they do not work in the Haymarket office.
No other company that I've provided services for does this. I'm especially worried about Haymarket doing it because they provide the bulk of my company's income at present. I live quite a long way from their south-west London office and claim back mileage expenses and two-nights-a-week accommodation from my company. I won't be able to do this if I'm a casual worker. I don't even know what day rate I'll be offered as yet. I imagine they'll try to pull a fast one and cut the rate my company charges them at present, to take account of the 'holiday pay' I will be entitled to. Ultimately, I will end up poorer as I will be paying more tax.
Can anyone advise on this? Do I simply have no option but to capitulate to Haymarket?
Many thanks for taking the time to read this.
Chris
I have been freelancing as a magazine editor/writer for about a decade, having set up a Limited company in 2003. I sometimes work from home when writing, but mostly work in other companies' offices away from home when editing layouts etc.
My company submits invoices to these companies and it pays me a basic salary each month, with the bulk of my income coming from dividends three or four times a year. My company also makes monthly NIC contributions and, naturally, pays corporation tax each year.
Last week I was called into a meeting at one of the companies I provide services to (Haymarket Publishing) and was told that from 1 Jan I will be treated as a casual worker and have my tax deducted at source by Haymarket. I'd heard about this happening to others at Haymarket who operate as sole traders, but thought it wouldn't apply to me.
Haymarket supplied me with a copy of their new company policy on the 'treatment of non-established and casual workers'. It appears that the key condition for them being able to deduct my tax at source is that I 'use the company resources' by working at one of their workstations with one of their computers. Other contributors/suppliers will be allowed to continue invoicing Haymarket if they do not work in the Haymarket office.
No other company that I've provided services for does this. I'm especially worried about Haymarket doing it because they provide the bulk of my company's income at present. I live quite a long way from their south-west London office and claim back mileage expenses and two-nights-a-week accommodation from my company. I won't be able to do this if I'm a casual worker. I don't even know what day rate I'll be offered as yet. I imagine they'll try to pull a fast one and cut the rate my company charges them at present, to take account of the 'holiday pay' I will be entitled to. Ultimately, I will end up poorer as I will be paying more tax.
Can anyone advise on this? Do I simply have no option but to capitulate to Haymarket?
Many thanks for taking the time to read this.
Chris
- Contact in PM
Rarinrob
Messages count : 2Likes count : 0Registration : 24 November 2012Capitulate it is, then. - Contact in PM
glebe digital
Messages count : 105Likes count : 2Registration : 21 December 2006It's just business, perhaps you should up your day-rates [to Haymarket] to account for your -soon to be- increased expenditure on accomodation & fuel?CGI Specialist - Contact in PM
cheltax5678
Messages count : 2Likes count : 0Registration : 28 September 2012Hi Rarinrob,
This is to do with the ever changing stance on employees/workers and contractors by HMRC. It is not actually a straight forward issue although common.
Do you have an accountant as this is something they normally advise on.
There are ways that this doesn't actually impact you overall tax wise if the other companies are not doing the same but the fact that you use one of their workstations on its own no way merits them treating you as a worker. There are various other tests.
For the record I am an accountant :)
Steve ME