Forum

• # 116895
• Mon 02 Jul 2018 07:23 AM

Good morning.

I am looking for some help on a question I have been asked, any input would be greatfully received.

I have a client who is in full time employment and all so works shifts in her local pub as a barmaid.

The income from the pub work is entered on her self assessment tax return each year as she completes one for other income which she receives so all tax and national insurance is paid on the wage received from the pub.

The pub has been taken over by a new land lord who is saying that all employees must now be put onto the books.

My client would like to keep things the same and declair the income on her tax return as she is happy to do it this way.

The question is...

Is there any legal reason why the landlord is adament that they must all go on the payroll, he is saying that it is due to employer national insurance requirements, but if my client is declaring the income on a self assessment all national insurance and tax will be paid on the income and it would save the employer money by not having to pay employer national insurance?

 Your opinion on this matter would be kindly accepted

Rachel 

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• # 116897
• Mon 02 Jul 2018 10:25 AM

Rachel M said:

“

Good morning.

I am looking for some help on a question I have been asked, any input would be greatfully received.

I have a client who is in full time employment and all so works shifts in her local pub as a barmaid.

The income from the pub work is entered on her self assessment tax return each year as she completes one for other income which she receives so all tax and national insurance is paid on the wage received from the pub.

The pub has been taken over by a new land lord who is saying that all employees must now be put onto the books.

My client would like to keep things the same and declair the income on her tax return as she is happy to do it this way.

The question is...

Is there any legal reason why the landlord is adament that they must all go on the payroll, he is saying that it is due to employer national insurance requirements, but if my client is declaring the income on a self assessment all national insurance and tax will be paid on the income and it would save the employer money by not having to pay employer national insurance?

 Your opinion on this matter would be kindly accepted

Rachel 

”

 Hi Rachel

On the basis of 'he who pays the piper calls the tune', I cannot see why your client does not want to go on the pub payroll.  As a second job, she will automatically go on tax code BR.  If she is not using up her tax allowance on her first job she can arrange with HMRC to have the allowance divided between the two jobs.

When you have more than one job you usually have to complete a self assessment tax return .  Under her current arrangements she would also need to be registered with HMRC as self employed.

Dave

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• # 116898
• Mon 02 Jul 2018 10:41 AM

Hi David.

Thank you for your thoughts on this subject.

This is what I have told my client with regard to the BR tax code and the self assessment.

I think may be it is a little bit of the "i like things the way they are" but I said I would ask for some other opinions.

Thank you very much.

Rachel 

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• # 116899
• Mon 02 Jul 2018 12:07 PM

Rachel M said:

“

Hi David.

Thank you for your thoughts on this subject.

 

This is what I have told my client with regard to the BR tax code and the self assessment.

I think may be it is a little bit of the "i like things the way they are" but I said I would ask for some other opinions.

 

Thank you very much.

Rachel 

”

 Hi Rachel

There is also the issue of tips/tronc which need to be processed through the payroll in a certain way depending on how they are paid and treated by the landlord.  Assuming there are any that is!

Caroline

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• # 116900
• Mon 02 Jul 2018 12:32 PM

Hi Caroline.

Yes, under the old landlord there were tips which my client declaired in her self assessment.

 The new landlord actually takes over tomorrow and I am not their bookkeeper so do not know the in's and out's of how they are going to be dealing with this now or even if there will be any tips at all.

 I think there are going to be a lot of changes ahead and some not so welcome.

Thank you for replying to my question.

Rachel. 

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• # 116906
• Tue 03 Jul 2018 11:09 AM

Rachel M said:

"

The income from the pub work is entered on her self assessment tax return each year as she completes one for other income which she receives so all tax and national insurance is paid on the wage received from the pub.

”

 Hi Rachel

This isn't correct, if she is working in a pub it is difficult to prove that she is not an employee so employers Class 1a NI contributions are due, which cannot be declared and paid through self assesment. The new landlord is correct in saying all bar staff must be paid through PAYE.

There are various tests to prove is someone should be paid as employee or on a self employed/freelance basis, the principle ones are

• Is there a financial risk?
• Do they control their own work?
• Can they substitute someone in their place?

I doubt you would be able to prove anyone working in a pub can be considered a freelancer.

Cheers

Mike

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• # 116975
• Mon 23 Jul 2018 11:51 PM

Yes, it is as Mike says, and the changes are made so that the business complies with the law. They don't have a choice, and the way that your client has been paid in the past is wrong.

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