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What do the new Revenue guidelines mean for Freelancers?

What do the new Revenue guidelines mean for Freelancers?

At the end of May, the Revenue Commissioners published their guidance on how the status of workers should be assessed in light of a landmark Supreme Court judgment last October. This found that drivers for Domino’s Pizza in Ireland should be considered employees and not self-employed contractors.

This decision may have implications for the way in which freelancers are treated or hired by companies and may cause them to be more selective in their hiring policy.

The 58-page review is not the most exciting read, but it is an important one and we have included a link to it at the end of this post.

This is an important take-out from the review: the guidelines or tax rules have not changed since this case. However, the interpretation by Revenue of them might. The outcome of the case will create more focus on the relationship of ‘individuals’ (sole traders) with their clients, so we would advise every freelance to inform themselves. Read the Revenue guidelines and talk to your financial or tax advisor.

It’s important to note that being a sole-trader is a perfectly acceptable way to run a business or be hired by a business. However, where those people act for only one or few clients at any one time, this could potentially result in Revenue taking the view that the person is an employee. A good example here might be a copywriter, social media exert or a fractional CMO working a day or two a week with one client over a prolonged period of time.

This isn’t a default to an ‘employee first’ model, but sole traders who dedicate large portions of their time to any one client could be considered an ‘employee’ for the time they spend with that one long-term client.

Setting yourself up under a limited company structure is not as onerous as it sounds and we can connect you with a suitable advisor who can talk you through the why’s and how’s of doing so.

Useful links

Guidelines for Determining Employment Status for Taxation Purposes

Understanding your employment status

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