The Revenue has been cracking down over the last few years on the criteria for being self employed.
This has led to workers who had been self employed all along suddenly finding they must go on the payroll as the Revenue has determined they do not fit the criteria for being considered self employed.
This means a big change for the worker involved but it also has implications for the employer.
If the Revenue determine one of their workers should have been classified as employed rather than self employed they are liable for:
- Employers PRSI contributions for the time the worker was working for them
- any unpaid tax/prsi/levies owed by the worker.
- As employees, the worker is entitled to holiday pay, working time etc
Most recently the Revenue issued a e-brief with regard to locum doctors who must now be treated as employees. The doctors who employed them were advised to issue supplementary P35s to cover all outstanding tax due for 2009 and ensure the position is regularized by the time the 2010 P35 is submitted.
What are the criteria to assess whether a worker is employed or self employed:
- must own their own business
- are exposed to financial risk
- assumes responsibility for investment and management in the enterprise
- have the opportunity to profit from sound management
- Has control over the work that is done and how it is done
- Is free to hire other people to do the work
- can provide the same services to more than one person/business at a time
- Provides the materials for the job
- Provides the equipment and machinery for the work
- Has a fixed place of business
- Costs and agrees a price for a job
- provides their own insurance cover
- Controls the hours they work
There are additional factors to consider but each case should be considered on their own points. If in doubt, professional advice should be sought.