'The new scheme has been in operation since April 2007.

It is the contractor’s responsibility to determine whether any worker is an employee or a self-employed, independent contractor. The answer depends on the facts of the relationship, not on what you choose to call it.

If the worker is, in reality, an employee he should ‘go on the books’ with the proper calculation of PAYE and NI. If the worker is a genuine self-employed contractor the paying contractor must verify the sub-contractor with H M Revenue and Customs to establish whether to pay them gross or after deduction of tax.

The employment status is important. If the paying contractor gets it wrong it can be costly. You should be thinking about it now. Perhaps we can help?