[jhagger]

Any ideas would be much appreciated!I've been trying to find any advice reading through pages of this site but keep getting sidetracked on other topics!
i have a friend who has asked me if i can fit him into my business as had enough of working alot of hours for little money . he would be a good asset to have as he deff works alot harder than me. i am only a small one man band so would need to canvass some more work to fit him in. what i am unsure of is how to go about with his wages, he is used to being paid monthly. am i allowed to pay him into his account and claim it on expenditure as wages? would i need to state that he is self employed also. does anyone no if it's legal to do it this way? if i was to withdraw cash from the bank there would be no proof of this and i would then get stung on tax as would appear to have a much higher income?!

also do u need employers liability or can i just put one in his name?

please help!!

jon

[chris@c.m.s]

Hi Jon sorry I don't know much about employing other than what I've picked on here, however I feel If you cant make good money as a sole trader your not going to do yourself any favours by employing someone else who potentially is going to bring in less money than yourself even though you say he works hard.
You need to look at the bigger picture of why your working hard for low rewards.   

[Trevor Knight]

Hi Jon,

Few pointers for you.

1) If he works FULL time for you he CANNOT be self employed, he is PAYE
2) Payment into his account can be done weekly or monthly, I suggest monthly as it help cashflow projection
3) ALL PAYE is tax deductable, but you will also be liable for Employer NI Contributions and are also respsonsible for deducting Tax and NI from your staff and sending it to the IR every quarter.
4) YES you MUST have Employers & Public Liability, if he has an accident you must be insured otherwise you will be in deep trouble, poss Imprisonment!!

If he is working cleaning windows then you need to use your time wisely and work on ways to increase your business, canvassing etc.........

Good luck! Trev

[STEVE-UK]

He can be self employed full time ,but he has to have his own limited company so on paper hes a sub contractor, he would have rent the van off you ,pay his own fuel,tax,liability insurance etc,but you pay him extra to cover that

[Trevor Knight]

Steve,

You CANNOT be full time self employed, if someone generates ALL their work from 1 person then they are EMPLOYED! 100%

Ask the IR and they will verify this to avoid exactly the situation you have detailed.

You used to be able to do this but the IR worked out they lose so much revenue they stopped it.

Regards,

Trev

[Moderator David@stives]

Here is a fantastic guide to determine someones employment status

www.hmrc.gov.uk/pdfs/ir56.pdf

[Steve CM]

this pretty much sums it up in 4 lines from the guide Dave posted up!

• self-employed - if you are in business on your own account and
bear the responsibility for the success or failure of that business, and
 
• employed - if you personally work under the control of someone
and do not run the risks of having a business yourself.

I have tried finding loopholes because the tax is high once you've paid your end and their end! i think the only way round it is to set up some kind of franchisee or license holder but i don't know enough about it to comment. P.A.Y.E is the way us as employees have to work i'm afraid

[gerard mcmanus]

I am looking to take people on as well, but under self-employeed. I have read through trev's posts and he is spot on, technically if you are generating the business and are responsible for ensuring he is making a wage then he is employeed by you.

But there are tuns of examples of business that get away with this....eg....

taxi drivers, they are taken on by a firm, who gererates there business through there switch board, but are self emplyeed.

 :

Jhagger, just to keep things on track for you mate,

If you take someone on employeed:-

You will have to pay holidays, sick, maternaty leave etc
You will have to pay employers liability insurance
You will have to pay employers national insurance contributions
You will have to run a PAYE system and pay there tax on there behalf

If you take someone on self employeed

You will be responsible for nothing

how ever they will have to pay for a tax return
they will not get any paid holidays
they will not get any paid sick
they will be respunsible for there tax returns

hope that helps mate

gerard 

[pdale]

Just a something to add to everything that has been said. If he is self employed or a subbie, it is still a requirement by law that you have employee's liability insurance.

I did a course with the chamber of commerce last year and this one came as a shock to me as well others. One guy was a plasterer who had 8 subbies working for him without it.

Paul

[Wayne Thomas]

Any ideas would be much appreciated!I've been trying to find any advice reading through pages of this site but keep getting sidetracked on other topics!
i have a friend who has asked me if i can fit him into my business as had enough of working alot of hours for little money . he would be a good asset to have as he deff works alot harder than me. i am only a small one man band so would need to canvass some more work to fit him in. what i am unsure of is how to go about with his wages, he is used to being paid monthly. am i allowed to pay him into his account and claim it on expenditure as wages? would i need to state that he is self employed also. does anyone no if it's legal to do it this way? if i was to withdraw cash from the bank there would be no proof of this and i would then get stung on tax as would appear to have a much higher income?!

also do u need employers liability or can i just put one in his name?

please help!!

jon

The question you need to ask yourself is: do I really want to employ someone for the  benefit of my business and not just because they are a friend (at the moment) who is fed up with working long hours for low pay.

[seandyer2003]

Also if you take them on self employed you cant really control them because then they are employed!? So its a difficult one but employing will be ok if you have the right work and he finishes it every week, when i get busy enough to employ (which i am still building too) i plan on paying a percentage of work done each day plus a bonus for being punctual and one for completing the weeks work and when i worked it out it was between 8-10 an hr which is good wage but hopefully they are doing double that for me But need ALOT of good work to do that day in and out....
Anyone here who does employ a worker on residential or commercial who can let us know what kind of figure they hit each day etc, because i know what i can do each day but would a worker do that???