[chrismroberts]

Hi everyone, I'm looking for a bit of advice...

My mum is looking to get out of the full time rat race and go part time with her job.  She asked me if she could work a day or so here and there with me to bump her money up, and I said that would be fine... but I don't want to become an employer and mess about with PAYE just yet, so was thinking of paying her as a subcontractor.

Is this possible? Are there any special rules about this, ie do I have to have employers liability insurance and safety policies and things? And most importantly... is the money I pay out tax deductable?

Thanks in advance for any advice you guys can give

Chris

[chosker]

Maybe she could go self employed? just a thought

[KarlJones]

Does she intend on working for anyone else or just you?

The thing is, tax evasion and tax avoidence.  To avoid tax is legal, to evade it is not.

If she is self employed then it is no problem, however there is a few rules about what is and is not self employed.  You can not be self employed and work for one person.

[chosker]

You can be self employed with one job if you already have another job. I have done it in the recent past and from the sounds of it she (I'm sorry, sounds rude but I don't know her name) has another job for 3 days a week so this should be fine.

The laws around the self employed status are murky though and if she is seen to be an employee then there could be trouble. So long as she is seen to dictate her own hours, makes sure she gives you invoices etc things should be ok. You might want to get some advice from somewhere though, don't take my word for it just in case 

[chrismroberts]

Yes, shes going self employed and keeping her other job part time.  I used to work for the borough council in Warrington, and a lot of lone subcontractors we had in had to fill out questionnaires to determine whether they were to be self employed or on the councils payroll.

If she provides her own equipment, and as you said chosker, does invoices for her time, would this be sufficient?

[chosker]

I think so.

You have to make sure certain other things are taken into account. For example if you're self employed and ill, you are supposed to find someone else to stand in for you. This shouldnt be a problem for you as you could probably be her stand-in I imagine. You do not necessarily need to actually stand in, so long as if worse came to the worse you could.

Do you have a good accountant? If so, drop em a quick line and run it past them. Our accountants fab and knows all that kind of stuff so i presume yours will too?

[chrismroberts]

Do I have to prove I stand in for her? She'll only be working with me perhaps a day a week, so I don't think this should be too much of a problem.

I don't have an accountant, no  Should I get one? They just seem really expensive for what they are.  My work is really growing, but they just seem a huge expense right now.

[chosker]

No you don't have to prove it, she just must be aware that should she be asked by someone what happens if she's away she must have the answer ready of ''so and so can stand in for me''. You don't actually have to, just don't book work for those days, and don't say that to them!

I'm sure we didn't have an accountant the first few years either, it is advisable as you get larger as if an error is made, it could cost you more in penalties than an accountant would cost. Accountants take some responsibility on their own shoulders if they do the wrong thing so your partially covered, plus they probably wont do the wrong thing!

Have you got anyone else you could get advice from? i.e. the FSB or some other form of advisor?

[chrismroberts]

Thats true enough, any error I made now would only be a relatively small one.  I could probably just do with a book keeper.

The FSB? The Financial Services Board? Would the Revenue give advice or would that be a dangerous move?  :  I have a few friends who are in similar businesses, but noone who could give advice in official form.

Thanks for all your replies, I'm heading away for the weekend now so won't be on again for a while.  Will have a look when I come back 

Chris

[chosker]

FSB stands for Federation of Small Businesses. It is HIGHLY ADVISABLE to join them, if you have less than five employees i think its about £190 for a year.

What the FSB do is give you advice. Any advice that they do give you you cannot be sued / taken to court over, they take entire responsibility for wrong advice. They have a huge team of people specialised in all areas of law for small businesses - employers liability, tax issues etc. Basically, you have a problem, you call them and they can help you out.

Hope you have a good weekend.

Claire

[windows_chepstow]

Excellent information on employment status for you to mull over
www.hmrc.gov.uk/employment-status/index.htm

And from within that link is this
www.hmrc.gov.uk/pdfs/ir56.htm

Read and enjoy; the above are the definitive rules for employing.