Most of us understand the benefits of social media when it comes to marketing our businesses. It’s a great tool for companies to promote their services and connect with clients.
But when it comes to online marketing, too many construction firms and tradespeople unknowingly make themselves a target for HMRC.
Maybe you share a photo of your “team” sporting your company uniforms or standing next to your shiny new branded vehicles. Perhaps you put a post out telling the world how you treated your “team” to a fun day out or bought one of your lads a new pair of boots.
But how do those posts look to HMRC?
If your subbies are genuinely self-employed, why are they listed on your “meet our team” page, wearing your uniform and driving your vans? Why are you treating them to team-building days or buying them new equipment?
If you treat them like employees, and they act like employees, and you’re putting out posts that make them look and sound like employees, you’ll have a hard time convincing HMRC that they aren’t employees.
Big Brother is watching you
Not many people realise this, but HMRC has a tool called Connect. Connect uses data from various sources to identify possible tax evasion and avoidance.
It means HMRC doesn’t have to rely solely on the information you put in your tax returns. They can collect a whole load of information about you.
Connect can take data from other government and corporate databases – for example, DVLA, Companies House and the Gas Safe Register. It can get data from your bank accounts, pensions and credit card transactions. And it can collect data from your website, social media pages and any online ads or marketplaces.
Of course, HMRC isn’t using Connect to spy on every business at all times. Something usually triggers an enquiry before Connect comes into play – an inconsistency on a tax return or some unusual activity.
However, sometimes enquiries can be completely random. HMRC looks at what they consider to be high-risk industries (i.e. industries with a lot of cash transactions) or companies with big inconsistencies in figures year on year. They’ll also become interested in you if someone has alerted them to unusual activity in your accounts.
In other words, you could get on their radar at any time. And if you do, the last thing you want is to give them a load of ammunition they can use to reclassify your subbies as employees.
And that’s why you should be careful what you’re sharing online.
The good news
Subbies wearing your uniform and driving your vans isn’t evidence that they are employed. And if you can provide a legitimate business reason why you work with subbies the way you do, it makes it harder for HMRC to argue otherwise.
You can do that by making sure you have watertight contracts between you and your subbies.
You work with your subbies the way you do for a reason – all you need to do is make that reason clear in your contracts.
If subbies drive your vans, then specify in your contracts that they drive your vehicles when delivering services, and this is reflected in the rates you pay them.
If subbies wear your uniforms, specify in your contracts that they must wear your uniforms on-site because they need to be easily identifiable for health, safety, and security reasons.
As for sharing team pictures on your socials? Well, it’s up to you whether you want to take the risk. Just don’t refer to them as your employees or staff.
Insurance-backed contracts from HardHats
If your subbies are genuinely self-employed, and the relationship between you and your subbies is legitimately one of contractor and subcontractor, put it all in writing. It’ll make it much harder for HMRC to make a case against you.
You don’t need to worry about sourcing contract templates or creating your own agreement – we can take care of it all for you.
All our contracts are bespoke – we document the exact way you work with subbies to leave HMRC in no doubt about their employment status.
But if HMRC ever does make an enquiry, we’ll handle it on your behalf. And in the unlikely event they ever reclassify your subbies, we’ll pay any associated costs.
That’s because all our contracts are underwritten by Markel – a multi-billion dollar international insurance company that specialises in ‘hard-to-place’ risks.
Plus, we get all your subbies to sign the contracts electronically using our app, so you don’t even have to worry about the paperwork.
So if you work with your subbies long-term and want to stay that way without upsetting HMRC or using a payroll company, get in touch.