4th January 2013, 04:37 PM
BAJR - there may be more cases like this as a result of HMRC taking a close interest in payments to self-employed subcontractors. The advice I have seen is that unless the subcontractors can show that they are bona fide businesses or self-employed individuals, payments should be made as if to an individual, with tax deducted by the employer. This hassle means that it is simpler to administer payments to VAT registered/ companies etc than to small firms. You'd almost wonder whether the rhetoric of supporting entrepreneurism was just empty words.