Later that evening, Ebenezer Scrooge sat in his lonely office at home, contemplating the problem before him. He had hoped that the Employer Compliance Review was just a routine affair - a seasonal inconvenience to be got out of the way quickly, so that he could get on with earning a living. Now he wondered gravely what the New Year would bring.

"If only old Marley were still here", he thought, "...I always resented sharing the company's profits with the likes of him, but at least I could put his name forward as an obvious substitute or assistant worker". As the night wore on, Scrooge could not erase from his mind the parting words of the Tax Inspector, and the prospect of having to pay additional fees to his accountants for defending him against a lengthy Revenue enquiry.

Scrooge was still sitting in his chair when The Ghost of Christmas Past appeared before him. "Whose past?" asked Scrooge. "Your past", replied the Ghost, "and I shall need to see copies of all your contracts since April 2000, together with all other documents associated with those engagements, including all invoices, purchase orders and timesheets".

Then the Ghost took him on a nightmare journey through the events of years gone by: all the times when he worked at his client's premises rather than at home, all the times when he had to use his client's equipment instead of his own, and all the times when he worked as part of a team that included members of the client's permanent staff. It all became increasingly tedious and frustrating. "What is to become of me?" demanded Scrooge in desperation. "You will be deemed to be a disguised employee under the IR35 provisions" said the Ghost.

Ebenezer Scrooge awoke with a start. "What a terrible thought!", he exclaimed. Then he realised it was just a dream. He tried to comfort himself with the idea that his accountants would doubtlessly protect him from any attack by the Revenue regarding his employment status. He even chided himself for being foolish enough to have had such fearful imaginings. "Whatever next?" he said out loud.

Just then he noticed an unopened envelope on his desk. "That wasn't there before" he thought, as with feverish hands he tore open the letter. It was from his accountants, Billem & Riskit, announcing that the Revenue were asking questions about the amounts of salary and dividends paid to Mr. and Mrs. Scrooge. And they also wanted to know what exactly it was that Mrs. S. did for the company to justify such a "bounteous" arrangement. Then the letter mentioned something about "Section 660A and the Settlements Legislation", which was all too much for Scrooge, whose head was spinning. "What a nice Christmas present this is", he thought, as he ruminated gloomily about the prospects of a huge tax bill on the dark horizon.

Scrooge's tortures were not over. The New Year brought with it the spectre of cold Christmases to come, with harsh tax regimes, more bureaucracy, increasing competition and decreasing earnings. Then there were the professional fees that he would have to pay to unravel the ball of string that his tax affairs now resembled. He recalled the last conversation that he had ever had with Jacob Marley, in which his old partner had advised Scrooge to consider purchasing some insurance, to cover him against the risk of an official enquiry. "The premiums are very reasonable", Marley had said, to which Scrooge had sneered: "A poor excuse for picking a man's pocket every renewal date". But Scrooge now had occasion to reflect, and he had to acknowledge that Marley might have been right.

Keith Preece
Senior Tax Consultant
Qdos Consulting
Qdos Consulting - for freelancers