Engineering Contractors - Ltd Company - Revenue Ruling

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Scrooge

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Interested to get your opinions on this.


Given the revenue's recent direction on the below, has me a little concerned, while I don't work for Domino's I feel trying to answer the Revenue questions are a bit confusing at best for me and I am wondering am I going to be impacted by this action which I understand Revenue may be looking to implement sooner rather than later.


www.warrenp.ie

PAYE, Self-Employed New Revenue Guidance on determining the employment status of an individual - Warren & Partners

Revenue have recently published new guidelines on determining the employment status of workers for tax purposes. - PAYE, Self-Employed Warren & Partners
www.warrenp.ie www.warrenp.ie


I am a Company Director of a Ltd company, in my current setup I have one contract to an engineering firm through a recruitment agency.
I don't invoice the engineering firm directly invoice a recruitment agency who in turn invoice the Engineering firm.


In terms of paying Taxes VAT, Income taxes are all up to date and I have an accounting firm managing all of this and I should be fully compliant here.


Is the above ruling from Revenue more chasing people who have not paid the above taxes or are they casting the net wider to cover people like myself who are complaint from a tax perspective.
 
The second bullet point under section 2 of your linked article is relevant to someone in your situation:

"Importantly the guidelines clarifies that the Dominos judgement does not change the tax position for businesses who engage companies to carry out work on their behalf or the treatment of services provided through personal service companies. Revenue have stated that they will not look through corporate structures except in very limited circumstances."

You are an employee of your own limited company, so that's where your employment status begins and ends.
 
Thanks for that; I suppose what got my interest in this was the below video; not sure if this is a scare sales tactic from this chap Derek but it certainly got my thinking.


Not sure if anybody had any dealings with him.




www.coventure.ie

Coventure Tax Consulting - We provide strategic tax planning for new and growing businesses and the individuals behind them.

We provide strategic tax planning for new and growing businesses and the individuals behind them
www.coventure.ie
 
I presume you are referring to the first video, about subbies in the construction industry. While it's not said explicitly, in that context he is talking about individuals engaged as subcontractors by a builder - again, not people like you who operate through AND ARE EMPLOYEES OF their own limited company. That's the critical distinguishing factor.
 
thanks torblednam I think the choice of words threw me a bit he has a lot of similiar videos on the Domino's case also.

Consult's with the man are not cheap either.
 
Last edited:
torblednam said:
While it's not said explicitly, in that context he is talking about individuals engaged as subcontractors by a builder - again, not people like you who operate through AND ARE EMPLOYEES OF their own limited company. That's the critical distinguishing factor.
Click to expand...
Exactly, up to maybe 20 years ago it was not uncommon to have IT contractors as sole traders. Very surprised if you could find one not employed through a limited company now for the very reason raised by the OP
 
We got audited years ago and got a big PRSI + Interest + Penalties bill for someone with their own Ltd company who worked partime for us. He was semi retired and came in a few days a week. Revenue argued that we provided them with their own desk, phone and computer and therefore they were an employee. We appealed it, the auditor in Revenue got assigned different section to handle a 'scandal' and issue then disappeared...
 


" Revenue’s treatment of services supplied through a Personal Services Company, or a
Managed Services Company, which are common structures through which
contracting services are supplied, has not changed. Revenue do not look through
corporate structures, except in very limited circumstances specifically provided for in
the Taxes Consolidation Act.

In that regard, for tax purposes, the judgment only
relates to individuals and there is no change in the tax position for businesses who
engage companies to carry out work on their behalf.
Having considered the full facts and circumstances of the case, and applying the five-
step framework, the Supreme Court unanimously confirmed Revenue’s
determination of the employment status for taxation purposes of the workers in the
case as employees.


Some businesses have relied on previous decisions of Deciding Officers of the
Department of Social Protection, to treat workers as self-employed for the purpose
of tax.

With the clarification from the judgment, such previous decisions cannot be
relied upon for determining the correct taxation treatment.

The five-step framework
should be applied to each relationship to determine the taxation status of each
worker.


As outlined throughout these guidelines, there are a number of workers across a
number of sectors who will need to be treated as employees for tax purposes, where
previously they have been treated as self-employed. It is essential that businesses
urgently and comprehensively review arrangements with all workers and determine
their employment status for taxation purposes. Where a business previously treated
a worker as self-employed, rather than as an employee, and the review of these
arrangements by reference to the five-step framework indicates that they are
employees for tax purposes, the business must now rectify that position by treating
the relevant workers as employees and operating PAYE.


Throughout these guidelines, the term ‘business’ is used to describe any recipient of
a service and includes not-for-profit entities (such as sporting organisations and
charities), and ‘worker’ is used to describe the service provider (i.e., the self-
employed individual, or employee, as the case may be)."
 
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