Business Owner

Sue started her career in compliance initially as a Local Government Internal Auditor and subsequently as an Inland Revenue PAYE Auditor. She then became game keeper turned poacher by joining the accountancy profession.

During this time, she headed up the Central Region PAYE practice of a Big 4 firm with responsibility on its national technical committee. She then became Head of Employer Tax Consultancy at a Group A accountancy firm. She set up her own business in 2010.

With over 30 years’ experience, Sue advises all types of clients how to comply with the onerous PAYE, NIC, Employment Income Tax and Construction Industry Scheme (CIS) reporting obligations. She can assist clients with HMRC enquiries into CJRS claims.

She specialises in employment status and the interaction of the Off Payroll Working Rules (IR35), PAYE Agency Worker Regulations and PAYE Agency Worker Rules. Sue also helps intermediaries including lawyers, accountants, and software companies to ensure their clients/members receive best advice including:

⦁ Providing ad-hoc advice on specific issues

⦁ Assisting with HMRC Visits including:

⦁ Employer Compliance

⦁ NMW audits and

⦁ CIS reviews

⦁ Carrying out supply chain audits to identify and mitigate potential liabilities

⦁ Advising on the complex rules on travel & subsistence expenses including cutting costs by structuring expense policies cost and tax efficiently

⦁ Advising on clients employing foreign nationals in the UK and sending employees to work abroad including working from home due to Covid-19

⦁ Producing guidelines and tailored training sessions on the CIS.

Employment Status/IR35 Case Studies

I was involved in a number of employment status cases when working as a PAYE Auditor including preparing submissions for Inspectors to take cases to the then Commissioners.

My first big success involved locum pharmacists. HMRC’s Special Office determined that as these individuals were covering for employees, they must be employees. The leading company in the UK accepted this decision. I worked closely with their largest competitor and established that there were significant differences in the two roles. This involved looking at the contracts and internal manuals and interviewing both the employees and the locums.

I presented a report to HMRC who accepted that they were self-employed. I subsequently contacted the market leader and we also agreed with HMRC that their locums were also self-employed. The key tests here were financial risk and the fact that while the employed locums were responsible for managing other employees, the locums were only responsible for supervising the dispensing of drugs.

I have also been involved in agreeing the self-employed status of various construction workers following HMRC challenges. In many of these cases I prepared reports and sought HMRC’s agreement proactively. In one case, however, HMRC were challenging the status under the PAYE Agency Worker rules. This was quite unusual as there was one company with two trades. It carried out both construction work and also supplied labour. After protracted negotiations HMRC agreed that the workers providing services were self-employed. This was on the basis that they were taking financial risk by quoting for projects based on specs, some provided their own labour so substitution was clearly evidenced and some provide materials.

Another case I was involved with was freelance trainers providing services into a business school. This again involved not just employment status but also the deemed employment provisions under the categorisation of earners rules for NIC. I prepared a report for HMRC and obtained their agreement to these individuals being correctly treated as self-employed for both tax and NIC.

Another case in which I defended a client against a £3 million claim from HMRC involved out of hours GPs. In this case, the HR director had provided incorrect information as he was not familiar with what happened “at the coal face”. He had even said that these doctors were provided with company cars. I interviewed the control room staff and the GPs and established that the company cars were in fact mini ambulances and that they were taking the risk by working solo in people’s homes. A good example given to me was that if a doctor was to be bitten by a dog and could not work, he was responsible for finding and paying a replacement.

Leading up to and since the introduction of the Off Payroll Working rules, I have been involved in assisting clients with SDS, working with lawyers to ensure that contracts reflect the true working practices and helping clients to understand their obligations and risks. I have also been involved in a number of webinars and videos for various businesses and trade bodies on IR35.

My approach to SDS is that all parties in the supply chain should sign up to an information gathering exercise. My preferred method is to use a questionnaire with one to one discussions. I have also helped clients who have used CEST to make sure that they understand what HMRC is asking. One of these projects involved a forensic company involved in drug testing. This demonstrated that using questionnaires remotely can result in misleading results. A number of individuals completed the same questionnaire but interpreted the questions differently despite being under the same terms. Due to the sensitive nature and security clearances, substitution was not an option. However, it was clear that this case was similar in a lot of ways to the recent FTT Referee case. The business had a system which identified the closest testers who were then contacted and offered a task. Over a period of weeks, we collated evidence of the number of projects rejected and instances where a tester had agreed to a project but subsequently had a better offer from a competitor. There are also similarities to the Trust House Forte decision. The interesting point with this was that as I was working with a lawyer, we both agreed that they were not employees but the lawyer was concerned about worker status as the mutuality test is one-sided.

Having given evidence in a Tax Tribunal for four days, I know from personal experience how difficult this can be. I therefore am cautious but realistic in my approach to the chances of successfully persuading a Tribunal whether someone is employed or self-employed. I am very much aware that this area can be notoriously grey and that even judges faced with the same evidence have different views.

Unlike many "IR35 experts", I am alert to not only the IR35 risks but also the Managed Service Company rules with the consequent risk of the transfer of debt provisions including to directors personally. I am also aware that HMRC could use the targeted anti-avoidance rules under the PAYE Agency Worker legislation.