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Employer incurs £400 EPC lodgement fees

Submitted by: MikeC (Admin) on 16-Jun-08 11:27:03 AM

An employed Domestic Energy Assessor (DEA) was suspended by their accreditation body after they failed to recover the lodgement fees from the employer, according to Dawn Pillans of Dawn2Dusk, specialists in contracts and Terms & Conditions for Home Information Packs (HIPs) and Energy Performance Certificates (EPCs).

Unable to work, the DEA was forced to cough-up over £400 to the accreditation body in order to have the suspension lifted.

The story emerged last Monday (09/06/08) after Dawn Pillans received an email from the DEA seeking help. She is warning all parties to carefully check contracts before offering or signing them: "Employed DEAs need to be very careful about the terms of employment they sign up to. I have reviewed a couple of 'employment contracts' offered to DEAs and both ignored basic UK employment law and contained unfair clauses."

"If the DEA is personally taking on liabilities on behalf of the employer, such as lodgment fees to their Accreditation Scheme, they need to have a clause in the contract covering prompt reimbursement.", advised Dawn.

Unlawful deduction from wages

She further warns that: "If the employer then fails to pay, this could be both a breach of contract and an 'unlawful deduction from wages', claims which can be lodged in an Employment Tribunal with little cost to the DEA. The employer's behaviour could even amount to an unfair 'constructive' dismissal claim if the DEA has been employed for 12 months or more."

Dawn is asking members of the Home Inspector Forum for examples of clauses within other employment contracts which cover lodgement fee liability: Employed DEAs bearing EPC lodgement fees - Is this usual? - The Home Inspector Forum

Mind games

This raises some "interesting" questions:

  • Should a DEA lose their livelihood for debts incurred by an employer in their name?
  • Can a DEA technically be employed at all under today's tax rules? *.
  • How much debt should an accreditation body allow employers to run-up on behalf of DEAs?
  • How is that figure to be arrived at (and should it apply universally to avoid unfair competition)?
  • If an accreditation body agrees to an employer paying lodgement fees, shouldn't the liability end there, and not fall to the employed DEA?
  • Is there a conflict of interest in circumstances where a DEA is employed by a HIP provider, say, and the accreditation body operates a similar, or same, business too?

Employed or self-employed?

* Do not accept this as any indication of knowing what the hell I'm writing (What follows are just mind-games - you get me? Good).

IR35 tax rules seek to determine whether a self-employed contractor, for example, may actually be an employee to their main income source, or if they are truly trading independently as a private business. The axe man asks various questions of the relationship such as: Who dictates the hours of work? Who supply's the tools of the trade? Could the DEA be substituted if something cropped up?

And so on.

It has to be said, though, that many view the definition as open to interpretation and believe the axe man ultimately prefers to chase an employer for a tax lump sum, rather than many sums owed by independent traders. So where the division is not clear, the axe man is thought to weigh the "evidence" accordingly (in favour of 'employed').

With that out of the way...

Trading relationships

Accreditation body and the DEA

I wonder then, who is entitled to claim the tax deductible expense of lodgement fees (in tax returns) if the accreditation scheme only recognises the liability as a DEA one? Because, in the final analysis...

If, by not paying lodgement fees, a DEA is consequently suspended and unable to work, then doesn't that make it the sole responsibility of the DEA to pay them, and not the 'employer'?

If the answer is yes, then it suggests that a clear trading risk falls on the DEA - a risk which could ultimately lead to bankruptcy (from business debts). In recognising that, the axe man surely recognises a profit and loss scenario. Ergo: self-employed.

Accreditation body and the DEA employer

If an accreditation body has an agreement to accept payments directly from an employer for lodgement fees, but later suspends - and chases - the employed DEA for payment (after said employer fails to pay); and if the accreditation scheme lifts the suspension when the DEA settles the debt, then that suggests a Joint and Several liability exists between the DEA and "employer", ie... a business partnership where debts are recovered from the assets belonging to either the DEA or employer.

Clearly, that is not the case. Or, at least, is not what an employed DEA intends to be the case.

Employers generally assume the risks of the business and enjoy the profits (or not) for doing so. Risk is part of working out who the employer is.

Remember... just mind-games!

More info on IR35

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