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HMRC don't make laws

Just to emphasise a point with regard to HMRC practices asserted as quasi law. They may assert that certain jobs can not be held to be self employed. It's not law. What in fact they are saying is that if they come across such jobs being practised as a one man business they'll rate it as being liable to PAYE legislation by suggesting that it's a tax evasion scheme (it's the only lawful claim they can ultimately rely upon) they may press the matter at law by trial. It then becomes a matter of criminal prosecution where the onus of proof is upon the prosecution and easily rebutted.

Having the Tax men pressing down on one might be scary; even the most robust outfits might deem such a challenge to be unassailable or not worth the hassle, but that's another matter. Like a hungry predator smelling blood HMRC will go to court if they smell weakness in their prey. HMRC will however avoid taking their prey to court when fundimental principles of law threaten the legitamacy and presumption of of Administrative statute, which is not law per se and which only has the force of law if flows from law. It's about precidence. Whilst lower courts tend to act as rubber stampers acting on behalf of the state, higher courts will more jelously guard their constitutional sovereignty.

There is no actual law that states that anyone may not assert their aspiration to act as a business enterprise just because it's deemed false by HMRC. The mere expedience of the states tax collecting convenience does not trump law. Any labourer may sell his service as a business enterprise and no legislation can deny him. It's only when that labourer serves just one master over an extended period of time that HMRC can build a case asserting that the labourer is not a business, and even then it's not cut and dried.

  • I think this is a solid case of law vs ease. I know HMRC do come knocking down the road, and the cost of dealing with the issue retrospectively is far higher than the cost of dealing with it upfront :'-(

    11 months ago
  • I totally empathise with that Paddy. The crippling cost of justice makes the idea that we have justice a huge myth. Actual equality before the law is the last great civilised reform we need. The current set up is Dickensian, if not almost medieval.

    What's important now though is that people understand the truth that policies are not laws, that the assertion that we don't have a constitution is at best ignorant and at worst, when asserted with the threat of force by the officers of state, treason.

    We may not be able to win every battle, yet, but at least we can know what's right and try, by whatever small powers we do have, to oppose the slippery slope towards tyranny. It matters not if that tyranny seems convenient or benign at the present. One never knows when the tools of tyranny we tolerate today might fall into the hands of less cuddly power mongers. It's why we have a constitution.

    Actually, successfully challenging those officers of state in court is not as difficult as all that. It's done every day. The first step is to be conscious of their weaknesses and the fallacy of their presumptions.

    The astonishing crudness of so much of their policies, even at the level of statute, is just one part of their weakness. It's often easy to dodge their intent by calling something by a different name. Two or more different names can be used to describe a singular activity or thing. If one definition is subject to unwanted policy then define it as something that isn't.

    The rich, powerful and cognacenti brazenly do it all the time, and so can we all.

    11 months ago
  • I'm not sure about your story, but one thing I find annoying about HMRC is that their helpline is almost never available. You go through this long automated list, with a computer that can't understand what any human could. It makes communicating with TalkTalk customer service look easy.

    And, when they finally find out your problem, and acknowledge the fact that thousands of other people have the same problem with the website, they don't adapt. Instead, they just make things worse, making it more automated. I mean, they should take more paper-based returns, the automation is so flawed, and this unnecessary technology is incredibly expensive to the taxpayer. Billions are spent on computer programs that do the job more poorly than humans who cost a fraction of the price.

    Added to that, as a filmmaker, there's always the fear that your investors won't get the tax-credits they were counting on. Read some recent news stories, about investors being stuck with large tax bills they didn't expect.

    10 months ago
  • I like how you call my 'essay' a "story" Vasco. If it is a story then it's a true one.

    I have a few true stories with regard to my dealings on behalf of myself and others when dealing with HMRC.

    The ones that perhaps best illustrate the matter at issue include one about a business client, herein after referred to as Fred, who was being pursued for over £70,000 VAT that Fred had blamelessly not collected from his American clients with regard to multiple sales of intellectual property over a period of a couple of years or so. HMRC stridently asserted that because the transactions occurred on Fred's computer in his UK office, even though his clients were in the USA at the time of the transactions, they were subject to VAT and that those Americans could claim back the VAT individually themselves, all several hundred of them. One can see HMRC's greedy and predatory thinking. After having looked into the devilish detail I assured Fred that HMRC were wrong. Fred decided to get 'professional' opinion and went to his own accountant who declared it was above his pay grade and sent Fred to a big city consultancy firm where the partners dressed in their Armani suites parked their Range Rovers, when not sojourning in their Tuscany villas. They told Fred he didn't have a leg to stand on and that he ought to arrange to pay HMRC the £70K. Being clear that HMRC and the posh firm of accountants were talking nonsense I persuaded Fred to challenge HMRC and wrote a declaration of technical fact that also included a threat to pursue HMRC in court for extortion consequential to malfeasance in public office. I've often found attack, when well founded, to be the best form of defence. A week later Fred received a weasel worded letter stating that he would not be pursued for the money and that the case was closed.

    Another case was when HMRC asserted that another friend had failed to make his tax return on time and was now liable to a £100 penalty. That was easy to deflect and the rebuttal was commensurate with some of Vasco's post. Because HMRC relied upon the evidence of their online processing all that was needed to cause 'probable doubt' was to raise the fact of the vast and multiple examples of the technical failures and weaknesses of their online technology. Proven habitual liars make worthless witnesses. At first HMRC tried to ignore that rebuttal and began the first phase of enforcement, but as soon as that enforcement process and my detailed rebuttal hit their legal departments desk it was quickly dropped without comment or explanation and the threat timed out.

    What those two cases reveal is HMRC's fear of losing court cases that might result in creating a precedent. Our statutory bodies and the legislature from which their presumed lawful authority is derived have never been more vulnerable to an increasingly learned public, and those at the top know it.

    I have quite a few more true and informative stories but the above cases ought suffice for principle.

    10 months ago
  • There's been speculation about the recent Supreme Court judgement concerning the sub contractor working for Plimlico Plumbers. That case has not changed the law one jot. In that case the sub contractor, although an incorporated limited company registered for VAT, did nothing other than work exclusively for Plimlico Plumbers, on a nine to five sort of basis, for a number of years. It's that long term exclusivity that created that employee status. The sub contractors limited company had nothing to do with the judgement. In other words the fact of the employees company was subordinate to the circumstances of that very specific relationship.

    That case does not mean that every contractor, even if only providing menial services, is now deemed to be an employee for PAYE, holiday pay and other employee purposes. An editor for example, operating as a company providing post production services for a limited and non exclusive period of time is not affected by that case. HMRC may assert that in our industry an editor can not be covered by their 'in house' rule asserting a sort of quasi statutory authority over their own HMRC certified PAYE exemptions, but that issue is just a red herring. Those exemptions, much cap doffed to by some, are merely a procedural waiver beneath actual law. Holders of those letters of exemption ought to establish themselves as limited companies if they want to avoid any PAYE related liabilities arising and they should ensure that they don't work exclusively for just one client over an extended period of time, the exact duration of which and degree of exclusivity has yet to be fully defined. Everything I've stated so far in this strand remains unaltered by this Supreme Court judgement.

    9 months ago
  • In my main biz I have employees and self employed contractors. That Pimlico plumber was a slam dunk employee as soon as it became clear he was long term exclusive and in no way running his own business.

    IMO most "gig economy" self employment is really just employment - choosing your hours isn't a strong enough test to get you self employed.

    If any struggling people here are doing gig economy work, start the docu now, and aim to make it an award winning record of one persons quest to win proper working rights :-)

    9 months ago
  • Proper working rights ought to be asserted by anyone clearly being exploited. On the other hand there are lots of people, particularly in our industry, who for several practical reasons, including for sound business reasons, don't want to be PAYE employees.

    HMRC have drawn up a list of occupations that they assert, relying upon claimed statutory authority that is actually without any lawful qualification, can't be exempted from self employed status using that lawfully meaningless letter of exemption that has attained such ubiquitous and spurious recognition.

    There's no law that can prevent anyone from being a business proprietor providing any good or service that isn't proscribed by actual law or to incorporate their enterprise; no matter how menial their services. If this was not true then the fundimental basis of our free capitalist system is threatened. The socio moral mitigations required of any civilised society ought not be used as a means of preventing law abiding citizens with small businesses from enjoying the same tax benefits as those mega corporations so beloved of our government and their elite familiers.

    9 months ago
  • Ah, but the emplyed/self employed is based on a "is it a real business" test. And it's much cheaper to hire self employed people, esp if they don't charge properly to cover their holidays, sickness and pension.

    So the rules as implemented are very much about preventing bad employers classifying people who should be employees as workers.

    In fact in my files is a letter from a self employed person where I made him sign that he was self employed AGAINST my advice and that I had told him that he would be better off as my employee. (My back is covered beca

    9 months ago
  • covered because the other people doing that role for me ARE employees. It's not a classification scam :-)

    9 months ago
  • Of course this does mean that sometimes a SE person will need to make a case that they are genuinely self employed, but all laws have boundary cases.

    9 months ago
  • The balance of advantage between the self employed and the employer is an issue. Where that balance favours the employer to the detriment of the self employee that's one thing, but there's other circumstances where the benefits are either mutual or to the advantage of the self employee .

    As a fundamental principal of English Law a declaration of truth or an affidavit of truth is the truth unless disproven beyond all probable doubt. The onus of proof lies with the appellant and not the respondent. It's also a fundamental principal of English Law that where a statute or procedure flowing from a statute is in conflict with Law, note the difference, then Law is always superior; even if it does take a court of Common Law jurisdiction to prove it.

    For reference, County Courts and Tribunals are not courts of law per se, they are what is defined in Halsbury's Laws of England "Unlawful Administrative Hearings"; one could hardly make it up!

    9 months ago