Employment Income

Question 1

Advantages of self-employued for the client

Answer 1

No NIC liability
No need to apply for PAYE

Question 2

Advantages of self-employued for the worker

Answer 2

Income received gross with a delay before having to pay a tax bill

Better deductibility of expenses

Question 3

Difference between employment and self-employment?

Answer 3

Employment is a contract of service

Self-employment is a contract for services

Question 4

Why do taxpayers prefer self-employment?

Answer 4

Rules on deductions for expenses are more generous

Question 5

Factors that lead presumption of employment rather than self-employment (equipment)

Answer 5

Client provides any equipment necessary for the work

Question 6

Factors that lead presumption of employment rather than self-employment (degree of control)

Answer 6

Subject to another person for choosing their place of work

Question 7

Factors that lead presumption of employment rather than self-employment (instructions)

Answer 7

If they are subject to another person’s instructions

Question 8

Factors that lead presumption of employment rather than self-employment (integral)

Answer 8

If inidivudual holds integral position in organisation

Question 9

Factors that lead presumption of employment rather than self-employment (risk)

Answer 9

If individual has no financial or personal risk for duites performed

Question 10

Factors that lead presumption of employment rather than self-employment (rights)

Answer 10

If individual has rights under employment legislation

Question 11

Factors that lead presumption of self-employment rather than employment (other people)

Answer 11

If individual can hire other people rather than having to perform duties themselves

Question 12

Factors that lead presumption of self-employment rather than employment (clients)

Answer 12

If individual works for multiple clients

Question 13

What are general earnings

Answer 13

Any salary, wage or other benefit obtained by employee if it consitutes an award for the employee + Cash equivalent of any taxable non-monetary benefits

Question 14

When is an amount treated as received (amounts received in current tax year) on earlier of?

Answer 14

Cash receipt

When employee becomes entitled to payment

Question 15

If an employee is director of a company, earnings are deemed to be received on earliest of?

Answer 15

Earlier of cash receipt or when employee becomes entitled to payment

TIme when amount credited in company’s accounting recirds

Emd of company’s period of account

Time the amount is determined

Question 16

How are taxable benefits treated?

Answer 16

As received when they are provided to the employee

Question 17

Does receipts basis apply to pension income?

Answer 17

No

Question 18

Is pension income taxed?

Answer 18

Yes, on the amopunt accruing in the tax year, whether or not it has actually been received in that year