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Is this classed as tax evasion?

  • 05-05-2020 8:46pm
    #1
    dartboardio
    Registered Users, Registered Users 2 Posts: 2,436 ✭✭✭


    Hi, does anyone know if a company operating similar to a pyramid scheme, hiring online marketers to recruit people to signup to their trading affiliate program, count as tax evasion?

    For context : they have over 65 online marketers whom they pay €100 to per client, some marketers making over €2000 a month tax free.

    They also advertise freely on Facebook looking for new workers all the time.


Comments

  • #2
    davindub
    Registered Users, Registered Users 2 Posts: 1,447 ✭✭✭davindub


    dartboardio wrote: »
    Hi, does anyone know if a company operating similar to a pyramid scheme, hiring online marketers to recruit people to signup to their trading affiliate program, count as tax evasion?

    For context : they have over 65 online marketers whom they pay €100 to per client, some marketers making over €2000 a month tax free.

    They also advertise freely on Facebook looking for new workers all the time.

    It could be...but I would say they are stating the marketers are self employed as thus must self declare the revenue. But Revenue may regard the marketers as employees and required to pay tax under the PAYE scheme if they meet their criteria.

    I would say given the normal circumstances of these companies it is the marketers who must declare the income.


  • #3
    dartboardio
    Registered Users, Registered Users 2 Posts: 2,436 ✭✭✭dartboardio


    davindub wrote: »
    It could be...but I would say they are stating the marketers are self employed as thus must self declare the revenue. But Revenue may regard the marketers as employees and required to pay tax under the PAYE scheme if they meet their criteria.

    I would say given the normal circumstances of these companies it is the marketers who must declare the income.


    I see. Thank you for the response!

    If these marketers were classed as self employed, would the company have to hold any personal details of the marketers? Ppsns, or at the very least a database of their general details?


  • #4
    davindub
    Registered Users, Registered Users 2 Posts: 1,447 ✭✭✭davindub


    dartboardio wrote: »
    I see. Thank you for the response!

    If these marketers were classed as self employed, would the company have to hold any personal details of the marketers? Ppsns, or at the very least a database of their general details?

    They would need to ensure that the arrangement is not for the purpose to avoid income tax. Some companies insist on evidence of registration for income tax but most don't.

    Yes the company should hold records of the transactions but not necessarily addresses etc. Again if they were paying cash or trying to hide cash, it could come under trying to avoid income tax. By rights a contractor should be issuing invoices but most of these companies will produce an invoice on behalf of the contractor, in which case there should be an address.


  • #5
    Leroy42
    Registered Users, Registered Users 2 Posts: 15,872 ✭✭✭✭Leroy42


    davindub wrote: »
    They would need to ensure that the arrangement is not for the purpose to avoid income tax. Some companies insist on evidence of registration for income tax but most don't.

    Yes the company should hold records of the transactions but not necessarily addresses etc. Again if they were paying cash or trying to hide cash, it could come under trying to avoid income tax. By rights a contractor should be issuing invoices but most of these companies will produce an invoice on behalf of the contractor, in which case there should be an address.

    It is always better to be an the cautious side. I many cases once one can be seen to be doing ones best the revenue will take a considered view.

    In this case, think about it from Revenues POV. What would they normally expect from a company? Payroll should have PPS numbers and be filed through ROS.

    Are you certain that these are self employed? Have you checked with Revenue? If you are not certain then the company is open to Revenue filing they are intact employeescandcas such the company owe taxes as if this were not payments.

    Even if they are expenses, do you know the normal expectations in relation to records for expenses. Revenue do not like cask being paid out with no details.

    To protect the company, I would think that you should be keeping records of you was paid. The company could do self invoicing if it is not possible from the individuals.

    Name, address. Are these cash payments or bank transfers. If cash I would look to move to bank transfer as at least that gives you records of where the payments went.

    Caveat - I am neither a tax advisor or work for the Revenue. These are simply my own obversations from different businesses and interactions with Revenue.


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