Letter: The pros and cons of John Birt Productions Ltd
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Sir: Legal avoidance, we are told, allows some highly paid corporation and company executives to have all their contracted salary treated as Schedule D. Fine. But if legal for them, why not everyone? As a bona fide freelance designer and writer, operating as a consultant with no salary from any other source, the Inspector of Taxes insists that all income from part-time lecturing must be duly taxed at source as PAYE.
In a letter of 1991, HM Inspector wrote to say that:
Only the private client work would appear to attract the 'freelance status' ie: self-employed status. Agency work is deemed to be employment by statute, and the lecturing is considered to constitute employment. The distinction drawn has a profound effect when considering the taxation of each type of income.
It certainly can - for some.
How many full-time 'employees' on very high salaries are allowed by their employers (and their tax collectors) to avoid PAYE in the way devised during the career of the director-general of the BBC for the past 20 years? What sums of money might flow to the Inland Revenue if the ruling above was less maverick?
Yours sincerely
DOUGLAS MERRITT
Bristol, Avon
2 March
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