Employed or Self-Employed Status

Revenue are increasingly querying the status of self-employed contractors such as

  • Consultants
  • Tradesmen
  • Locum doctors, opticians, pharmacists

Why is this happening?

Revenue prefer employee status. They can collect tax easier through PRSI

Some self-employed schemes were shams used for tax avoidance

Employees pay higher PRSI

What does it mean to you?

As a business owner you need to be careful in this area. If you treat someone as self-employed and revenue deem it an employment

  1. You could be assessed for PAYE and PRSI on top of previous payments
  2. The “employee” might acquire rights like redundancy .

How is the issue decided?

There are no set rules. Each case is decided on its own facts. The legal basis is whether the person is in fact “in business on their own account” The main guidelines are

  • Previous cases decided
  • Guidelines issued by the Committee on the Status of Employment. Key Factors
Does the employee provide labour only?.  Favours employment
Can they send a substitute? Favours self-employed
Can they make a loss in the activity? Favours self-employed
Are they integrated into your business e.g. Holiday pay, pension?. Favours employment
Are they closely supervised e.g. working hours, routine task monitoring. Favours employment

 If faced with a challenge on these issues you should consult your tax adviser for support

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