Question 1a ii
Your manager has had a meeting with Jonny who is establishing a new business. An extract from an email from your manager, a schedule and a computation are set out below.
Extract from the email from your manager
Jonny was born in 1968. His new business will begin trading on 1 November 2015. We have been asked to advise Jonny on his business and his inheritance. Some of the work has already been done; I want you to complete it.
Please prepare a memorandum for Jonny's client file addressing the following issues:
(ii) Salesmen
Jonny intends to hire two salesmen to get the business started. Their proposed contractual arrangements are as set out in the attached schedule.
Explain which of the proposed contractual arrangements with the salesmen indicate that they would be self-employed and state any changes which should be made to the other arrangements in order to maximise the likelihood of the salesmen being treated as self-employed.
Tax manager
Schedule — Employment income and plans for the new business
Salesmen
Jonny is proposing to enter into the following contractual arrangements with two part-time salesmen: They will work on Tuesday and Wednesday mornings each week for a two-month period. They will be paid a fee of £300 for each new sales contract obtained. No other payments will be made. They will use their own cars. Jonny will lend each of them a laptop computer.
Required: Prepare the memorandum as requested in the email from your manager.
The following marks are available: (a) (ii) Salesmen. (4 marks)