Employment status enquiries are serious for the following reasons to name but a few:
They usually begin as part of a wider enquiry into a corporation tax return and can quickly spiral out of control if not handled carefully and given the attention they require.
HMRC often seek retrospection of the PAYE for the workers concerned which, without intervention from a tax dispute resolution expert, can lead to a large settlement which can potentially put the company out of business.
Without intervention, HMRC will lead the enquiry and focus their questioning on the status indicators that support their position.
Any business that engages self-employed workers should be satisfied that those workers are correctly categorised and would not be considered employees by HMRC.
If HMRC open an enquiry into the status of the workers, we recommend that advice is sought from a tax dispute resolution specialist experienced in handling status challenges, who can limit the retrospection, and work with HMRC and the wider industry if necessary and assist the company with recategorization if required.
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