Incorrectly classifying an employee as a self-employed worker can be one of the most individually costly income tax and national insurance errors a business can make.
Where HMRC are successful in their endeavour and reclassify such an individual as an employee they will then review the payments made on the engagement for usually up to 4 years (for PAYE unless a case of fraud) and seek the recovery of the PAYE, NIC, Employers NIC, Interest and a penalty due on the amounts . . .
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