IVA Help!!

SIMONESANDERS_2

My husband's setting up a business as a self employed sole trader installing lockers. His friend will also be working with him, I wondered if he could set up as self employed as he has an IVA that is why we are not opting to set up as a company partnership. Can he set up as self employed on the basis that he will do work for us? We don't really want to have him as an employee because of all the NI etc hassle. If he can set up as self employed are there any implications? Any help or advice would be appreciated, thanks.

skintflint103

you can trade in any way you like it's your duty to creditors to earn an income.And a right. There are no restrictions that i know of in an iva . If he were bk he can still trade a sole person but cannot change his trading name whilst he's bk . so no go ahead.

Charco_2

There are no restrictions in the IVA on whether you can be self employed or not. As Skint says, you have a right to earn a living. Now I assume you're saying it's the friend that has the IVA and that he is going to self employed doing contracts for you/your husband...

There may be restrictions but they would actually come under different laws -they'll have nothing to with insolvency!

Mostly (as you've highlighted yourself) it will concern tax implications. The Inland Revenue may be interested to know your working arrangements to know that you're not just avoiding tax. Will your friend ACTUALLY BE self employed. I'm not saying you'll be doing anything wrong, but it is important you make sure you're doing things right - if that makes sense!

It's not simply enough to SAY he's self-employed if for all intents and purposes he's actually employed by your husband (albeit on a very loose contract). Some of the criteria that the Tax Office will be looking at are

1. Who provides the tools for work?
2. Does your friend work his own hours? When he wants!
3. Can he do the work in his own manner?
4. It's a bit of a coincidence that this same friend always wins the tender for the contracts you're offering

Things like that! I'm not saying you can't do it the way you are proposing, just do it right!

(I'm no expert, I sat a tax exam once many moons ago and could just as easily not have remembered this answer for you)