Oakham Town Council Still Think Laws Don't apply to them and employ a self employed Clerk Malcolm Plumb
The law is very clear and the council continues to ignore it.
The council first broke the law when it employed self employed administrator
Tracy Haliday. When I raised that issue The then Chairman Cllr Adam Lowe said
it would be sorted.
This week we have been given a copy of the internal audit report which states
are temp clerk is self employed.
The council has been mislead by the then chairman Adam Lowe.
We have always been told we were employing the clerk.
I have written to the council and will raise my concern at next weeks special
meeting.
Dear Clerk,
I have read the internal audit report and I am shocked to read the Locum Clerk is self employed.
The council is fully aware that it is unlawful for us to employ self employed Clerks or staff.
I thought it was only the temp admin was self employed and The then Chairman Adam Lowe
said it was being sorted.
It has been unlawful for any clerk to be self employed since 2011
New guidance says self-employment cannot be considered
Parish clerks will no longer be considered by HMRC to be self-employed and must be subject to PAYE. Guidance in Employment Income Manual EIM67320 had stated it was acceptable practice to treat payments received from the parish council as self-employed income
The Revenue says its view was based on the premise that payments to clerks fell below the PAYE tax threshold – but the department is now aware that many individuals’ earnings are above the thresholds of PAYE and National Insurance (NI) contributions.
New guidance has been issued on the tax treatment of parish clerks. It states that as a parish clerk is an office holder, income arising from the position is subject to PAYE, meaning a clerk
• can never be considered self-employed for tax or NI purposes
• must not be paid gross; and
• must be taxed under PAYE.
Parish councils must register as an employer with the taxman and operate PAYE on the income earned by clerks. The new guidance adds that ‘any previous agreements with HMRC or the former Inland Revenue under which the clerk was paid gross or was treated as self-employed are void, as are any “inherited arrangements” under which a clerk’s income is not subjected to PAYE’.
To ensure a correct tax code is issued, HMRC must be advised – usually via form P46 – if a clerk has other income.
The department says it will carry out checks to ascertain whether councils are operating PAYE on clerks. They will be undertaken in the tax year starting 6 April 2011.
The guidance in EIM67320 has been removed and should no longer be followed.
From
Martin Brookes
