Polish worker claiming to be self-employed

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  • #35389
    bulledl
    Participant

    We have had a claim from a Polish couple. They came to the UK in June 2008 and immediately started work at a factory and signed up to the Worker Registration Scheme. They both stopped work in November 2008. From then until March 2009 they were living off money sent to them from family in Poland. The partner has not worked since November 2008 as she is sick. However, the claimant has advised us that “I’m working as self-employed leaflet distributor in Hull areas delivering leaflets to terraced houses in predefined areas. I’m earning £50.00 weekly but sometimes when I am getting areas far away from me I must also buy weekly bus ticket for £8.50. I ‘m registered as self-employed for tax purposes as I don’t want receive cash in hand.” He has also provided a letter from the HMRC confirming his application to register as self-employed and pay Class 2 NI Conts.
    It seems to me that he is not actually self-employed, but is employed in the black economy. By stating that he is self-employed he bypasses the need to register with the Worker Registration Scheme, and goes straight to being treated as an EEA18 self-employed worker. This would also presumably suit his employer who does not need to then complete the worker registration forms, pay ni conts, tax etc for his employees.
    Do I have to treat him as self-employed if we have that letter from HMRC? If I do, he will be entitled to HB/CTB; if not, he won’t, as he is not registered for the Worker Registration Scheme. Is this a loophole that A8 nationals can exploit?

    #99223
    Anonymous
    Guest

    Hi, would you be able to tell me what the outcome on this was, as I have a similar case?

    #99224
    Anonymous
    Guest

    We had one like this and the clt even pitched up with a letter confirming her Class 2 contributions for the relevant tax year (as a casual domestic cleaner), issued to her by HMRC! However it looks to me that you just have to register as self employed and they accept it, until such time as they ever carry out compliance activity. We paid our lady but I’m beginning to think we shouldn’t have done. How could you prove he’s not s/e though – the burden of proof will be on you?

    #99225
    bulledl
    Participant

    I would not consider him to be s/e because he has stated that he is told where he has to deliver the leaflets, (“delivering leaflets to terraced houses in predefined areas”), and he has to pay for the cost of travelling to these areas. If he was genuinely s/e then surely he would add these “costs” to whatever he charged his client? Which then brings me on to the point that he is told how much he will earn, as opposed to how much he wants to charge. But on the other hand he could argue that he is a sub-contractor.
    However, we have recently been advised that A8 nationals stating that they are s/e is a known loophole and that because of this we do not really have any option but to pay.
    As an aside did anyone read the article in The Sunday Times on 23rd August? http://www.timesonline.co.uk/tol/news/uk/crime/article6806484.ece
    This appears to confirm the loophole exists and is being vigorously exploited. Unfortunately it appears that we can do little other than to wait for DWP and HMRC to look at their checks and regulations.

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