Another question about employing people

[chonok]

Starting to get very busy this year and looks like I could do with a hand.

Never employed anybody before. I don't need anybody too experienced and have already had people contact speculatively to see if I have any work for them.

I don't want to commit to taking anyone on permanently just yet - maybe a 3 month contract for now.

I have a fairly good relationship with the agencies (from when they found me work previously) and I was just going to go to them as I was under the impression that it is a lot less hassle than doing it directly - no commitments and no PAYE NI etc, and I just get an invoice at the end of the month, but obviously more costly than doing it direct.

Is it really that black and white though? Is there anything that is stopping me taking someone on a 3 month contract and asking them to invoice me at the end of the month for their time? Will i then be responsible for their PAYE and will they have employee benefits etc?

Other than the fact that I know that the agencies push for the contract workers to work under a limited company, I can't really see the difference. I don't really want to pay th agency a shedload of cash if I can help it!

[Eric Mc]

You want to use temporary staff from an agency.

I think it is very simple.

They supply the staff.

You pay the agency when they send you their invoice.

They handle the PAYE and NI because the staff are officially employed by the agency, not you.

That does not mean that you are completely free of employment regulations. There are rules and regulations for employers in regards to temporary and agency workers - so you do need to be aware of those.

[chonok]

Thanks for that Eric.

That's the thing though, they do not handle the PAYE and NI as they pay it straight into a limited companies account.

I know this as I have done work for them previously myself.

[insurance_jon]

they do if the person is an individual.

[Eric Mc]

chonok said:

Thanks for that Eric.

That's the thing though, they do not handle the PAYE and NI as they pay it straight into a limited companies account.

I know this as I have done work for them previously myself.

What limited company are you talking about? Are all these individuals that you use operating through their own limited companies?

[chonok]

I did, because I already had one set up.

They did offer for me to work under a limited company that they had set up, although I suppose that would mean that they would sort PAYE etc, although I was always under the impression that this was your responsibility as a contract worker...

[Eric Mc]

Sorry, I am completely confused now.

Your original question seemed to be about your business paying individuals who are working for you.

These individuals are supplied to you by an agency.

You do not pay the individuals directly. You pay the agency when they supply you with an invoice.

Am I right so far?

[chonok]

Eric,

Sorry, for the confusion, yes, that is correct if I were to go through an agency.

[Eric Mc]

If you pay an agency to supply you with people, then it IS that easy. The relationship between the agency and the people they are providing is nothing to do with you.

However, you do have employer responsibilities (outside of tax and NI) in regards to people who work for you - no matter whether they are your employees or agency staff.

[chonok]

Thanks for that Eric.

So effectively, the only difference between going through an agency and doing it myself is that I will have to sort out PAYE and NI?

[Eric Mc]

Yes - if you take on staff, then it is your business that has to register for PAYE and then pay the staff through the PAYE - accounting for PAYE and Class 1 NI on the salaries and wages you pay them.

Is your business a sole tradership or a limited company?

[chonok]

Eric,

My business is Ltd Company

[Eric Mc]

Is it registered for PAYE at the moment? Companies generally need to do so in order to be able to process properly directors' remuneration and P11d requirements.