self empoyed taking on self employed

critterfritter

Hi there

I run my own small business and need to take on someone to help me. I sell a service that charges between £8 and £18 per visit to someones home . Visits can range between 5 mins and 45 mins. Due to the low value of each visit my questions are...

1 if I employ a self employed person will this person be responsible for paying their own NI and TAX if they self bill me via an invoice
2 will I be able to literally send them a cheque for said invoices

3 will it matter that they have no hourly rate

Any information great fully appreciated

martindow

You cannot decide whether to take on someone as employed or self employed. It is decided by the nature of the work.

I've tried looking on the HMRC site as there is a page there on how to make a decision (failed to find it). Have a Google or call them to get a definitive answer.

debbie42

martindow wrote: »

I've tried looking on the HMRC site as there is a page there on how to make a decision

This one?
http://www.hmrc.gov.uk/employment-status/index.htm

Savvy_Sue

critterfritter wrote: »

3 will it matter that they have no hourly rate

the posters above have got it right, and I'd have thought too that you'd want to employ someone rather than risk them pinching your idea.

In reply to this bit though, no it won't, as long as if you calculated an hourly rate from the time they spent on each visit the result wasn't lower than the minimum wage.

However, again, you might find it better to employ someone who you would then pay at an hourly rate.

critterfritter

Thanks for the information , I understand what is being said about the hourly rate but I really want to keep administration to a minimum hence thinking if they are self employed and bill me I won't need to pay per hour , rather to pay per job

Prime example , looking after someones home while they are away I charge £45 per day - if I had someone work for me that's less than minimum wage per hour

If I had a business that charged more this wouldn't be an issue but my partner is about to have a child so I need some help without getting complicated


There is no pattern to bookings so can vary significantly week on week

Gertie_Walker

You cannot just treat poeple as self employed because it makes life easier for you! Once HMRC gets wind of the situation, they will make your life very complicated.
If you cannot sfford to pay the NMW, sick pay, holiday pay, etc, then you cannot afford to employ people and your business model is not sustainable. You cannot rip people off just to maintain your profits!

critterfritter

I'm not trying to rip anyone off or being underhand , I am just asking about how it works , there's no need to be funny about it

Thanks to the earlier post with a link to a helpful website I have found the answers I need

eventer

It sounds like you have the answers you need, but just in case - it sounds like you are talking about subcontracting work to someone rather than them working for you. I do this fairly often, and conversely am often the subcontractor. It avoids the need for me to employ anyone, but lets me take on larger jobs than I could otherwise handle. It also means I don't need employer's liability insurance, or to worry about whether I can afford to pay someone on a regular basis.

I subcontract on the basis that I ask someone to quote for a job, I then add my mark up on and send my quote to the client. Once the client has sent me a purchase order number, I then send a similar number on to my subbie, who does the work as agreed in the fee proposal. I then pay them as and when they invoice me. It is entirely legal and not ripping anyone off, or trying to avoid paying anything to HMRC, but unless you work in an industry where sub contracting is regularly used I can see how it would be harder to understand.

I always make sure that my subbies are registered with the correct professional governing body, have public liability cover and professional indemnity cover, and that it is entirely clear what is expected of them and what I will pay them. All of the ones I use are known personally to me so I can be certain of the level of service which is expected. Subcontractors need managing just as much as staff do, which is why knowing them personally does help!

critterfritter

Hi eventer

What you are doing is basically very similar to what I was advised so thank you for the full information I appreciate it

Thanks again