Sub contracting not employing.....
Discussion
Sure, you could take on a contractor or a temp (depending on the type of work) but don't expect to treat them like an employee and don't expect them to behave like an employee.
Also, there are some circumstances where they will be deemed to be your employee anyway (I don't mean IR35) and you could be liable for employee benefits to them.
It is a bit of a minefield but fortunately there are several PHers with direct experience who will doubtless be along shortly.
Also, there are some circumstances where they will be deemed to be your employee anyway (I don't mean IR35) and you could be liable for employee benefits to them.
It is a bit of a minefield but fortunately there are several PHers with direct experience who will doubtless be along shortly.
First of all, ignore anything to do with IR35 unless the person you are dealing with operates through his own limited company (highly unlikely).
This topic occurs all the time in the world of employment and tax law. Whether an individual is a bona fide employee or whether they are "self employed" is very much down to the terms under which you and he operate.
In law the term "Self Employed" is rarely used. "Trading on One's own Account" is a much clearer definition for someone who holds themselves to be "Self Employed".
When trying to decide into what category a person falls, a court would look at a number of criteria termed "the badges of trade". If a person wants to be treated as being "Self Employed" then they must exhibit a significant number of these "badges of trade".
The types of areas covered are:
Control - how much autonomy has the invidual over the work they do?
Respnsibility - who is responsible for the work he does? (i.e who gets sued if HE makes a mistake?)
Holidays - does he get paid leave?
Sickness - does he get paid when sick?
Is he carrying out a job in your business normally carried out by someone who is employed?
Hours - full time or part time?
Industry - what is the normal method of using people in the industry in which you operate?
Substitution - can the individual appoint a replacement for himself without having to notify you in advance?
Bussines premises - does the individual run a business from a business premises?
Customers - does he work just for you or has he multiple clients?
Insurance - is he required to take out separate insurance for his activities?
Does he supply his own tools and equipment?
Can he avail himself to facilities and benefits normally reserved for employees?
Is he VAT registered?
The Inland Revenue will also tell you that whether you are employed or self employed is not a matter of choice, it is a matter of fact.
>> Edited by Eric Mc on Thursday 6th October 19:16
This topic occurs all the time in the world of employment and tax law. Whether an individual is a bona fide employee or whether they are "self employed" is very much down to the terms under which you and he operate.
In law the term "Self Employed" is rarely used. "Trading on One's own Account" is a much clearer definition for someone who holds themselves to be "Self Employed".
When trying to decide into what category a person falls, a court would look at a number of criteria termed "the badges of trade". If a person wants to be treated as being "Self Employed" then they must exhibit a significant number of these "badges of trade".
The types of areas covered are:
Control - how much autonomy has the invidual over the work they do?
Respnsibility - who is responsible for the work he does? (i.e who gets sued if HE makes a mistake?)
Holidays - does he get paid leave?
Sickness - does he get paid when sick?
Is he carrying out a job in your business normally carried out by someone who is employed?
Hours - full time or part time?
Industry - what is the normal method of using people in the industry in which you operate?
Substitution - can the individual appoint a replacement for himself without having to notify you in advance?
Bussines premises - does the individual run a business from a business premises?
Customers - does he work just for you or has he multiple clients?
Insurance - is he required to take out separate insurance for his activities?
Does he supply his own tools and equipment?
Can he avail himself to facilities and benefits normally reserved for employees?
Is he VAT registered?
The Inland Revenue will also tell you that whether you are employed or self employed is not a matter of choice, it is a matter of fact.
>> Edited by Eric Mc on Thursday 6th October 19:16
Hi Edd
As always I agree with Eric Mc, I work for a company who deals is this area. You could phone our freephone number and answer the Contractor CSQ as if you where the person who you would be taking on. We have done a full consultation with the Customs and revenue to put in place a process to decide if a contractor is in side or outside of IR35. If you pass the CSQ the chances are you could look in to taking him on as a contractor in more detail.
Our web-site is www.charterhouseplc.com
John
As always I agree with Eric Mc, I work for a company who deals is this area. You could phone our freephone number and answer the Contractor CSQ as if you where the person who you would be taking on. We have done a full consultation with the Customs and revenue to put in place a process to decide if a contractor is in side or outside of IR35. If you pass the CSQ the chances are you could look in to taking him on as a contractor in more detail.
Our web-site is www.charterhouseplc.com
John
JohnSW20 - IR35 has little relevance here. For a start, the Revenue has already shown that it is happy to class someone as a disguised employee for tax purposes yet at the same time not an employee of the client for employee benefits purposes. So an IR35 status check on a potential candidate is going to be pretty worthless given that there is already precedent for the status having no bearing on employment rights. Even more so since, as Eric points out, it only applies to people working through a Limited Company anyway.
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