Employee or not?

The taxpayer ran a Chinese takeaway. HMRC visited the premises and found two members of staff, K and H, who were not accounted for in the taxpayer’s end-of-year employer’s return.

He said they were employed through an agency. The Revenue disagreed and issued determinations to collect additional PAYE and National Insurance (NI).

The taxpayer appealed.

He accepted that H was a direct employee, but claimed K was a self-employed deliverer. He provided his own car and settled all costs out of a flat fee paid to him by the taxpayer. He was not guaranteed work, nor was he supervised by the taxpayer.

The First-tier Tribunal accepted the taxpayer’s contention that K was self-employed and ruled that no PAYE or NI liability arose in respect of amounts paid to him.

The taxpayer’s appeal was allowed in part.

Issue: 4480 / Categories: Tax cases , Employees , Income Tax