There is an ever growing amount of legislation relating to Pay As You Earn schemes. In fact, the legislation continues to mount up despite successive governments promising to cut down on rules and regulations, particularly for employers. This is bad enough, but on top of the actual laws, anybody dealing with PAYE schemes also needs to know H M Revenue & Customs practice and the rules they effectively introduce because of the way in which they administer the law.
Before you even know what set of rules to apply to payments made to an individual, you need to decide whether that person is your employee. Even the Revenue realises this is not an easy question to answer and provides a tool on their website which they call the employment status indicator.
This can be completed although the instructions on who can use it and how are quite complicated to start with. There are a whole series of questions relating to where the work is carried out, who provides any tools required during the work, whether particular hours or days are worked, how pay or fees are calculated and what the arrangements are should a person be unable to carry out the duties they are contracted for.
The answer given by the tool is, of course, only an indication and not considered to be legally binding.
It is no wonder that more and more companies engage in payroll outsourcing and use the services of a payroll company. We, at Dataplan Payroll, offer solutions to your payroll outsourcing requirements and more.