Comments on: Freelancer wins case against unlawful deductions made by recruiter

By: Alex F

Alex F — Fri, 17 Jan 2025 19:58:24 +0000

In reply to Claimant. The greed of the tax man has created this mess. I don't think employees under umbrella companies should pay the employers NI for agency or others parties processing the payroll . Contractors will never get the benefits of a fulltime PAYE even though the tax man tags it accordingly. It would have been much simpler for HMRC them to apply a % of tax on small ltd companies if it felt it was not getting enough tax or tax was being avoided . Now it seems from this it's all a total mess because of the greedy tax man !

By: Robin

Robin — Thu, 09 Jan 2025 18:48:53 +0000

So I am really confused by this ruling. Surely in this instance the agent should be entitled to a refund of the employer NICs paid to HMRC as they have over paid and the PSC would be responsible for giving those employer NICs back to HMRC. What surely can’t happen is that the employee is entitled to the employer NICs directly. I can’t see anybody winning on this one. The Employer NICs still need to get paid.

By: Claimant

Claimant — Thu, 09 Jan 2025 13:07:31 +0000

The agency (Respondent) WAS given an SDA by the client and the Claimant was also given an SDS. The agency tried to argue that it was a business to business contractual relationship and that the contract allowed for it but this was not the case.
The Respondent (agency) used outdated PSC contracts and relied on chapter 8 of Income Tax (Earnings & Pension) Act 2003, rather than section 10.
The Respondent would have then reclaimed the Employer’s NIC as a tax deductible expense when the money was not coming from them in the first place.