Self Employment

gamblep

hi, i am currently self employed and do not employ anyone. my business is expanding and i am thinking about taking someone on. i would rather do this on a self employed basis. ie they invoice me every week and they are responsible for their own tax/ni affairs.

my question is, is this legal? im kind of thinking if they only work for me then i will have to salary them and pay them net of tax and have employers ni etc. - just thinking about it is putting me off!!

any advice is greatly appreciated. thanks.

code^express

I assume that you have either CIS5 or CIS6 card. Well, if you are going to employ somebody he/she will be your sub-contractor & they also must apply for CIS5 (which they will do they own tax voucher) but all this CIS(s) will be scrap in April 2007. My best advise to you is contact the inland revenue.

gamblep

code^express wrote:

I assume that you have either CIS5 or CIS6 card. Well, if you are going to employ somebody he/she will be your sub-contractor & they also must apply for CIS5 (which they will do they own tax voucher) but all this CIS(s) will be scrap in April 2007. My best advise to you is contact the inland revenue.

I should have added that i am in the transport industry. HGV Owner driver.

Hoddie_2

I assume that you have either CIS5 or CIS6 card. Well, if you are going to employ somebody he/she will be your sub-contractor & they also must apply for CIS5

Not necessarily. You cannot select employment status. CIS contractors can engage both self-employed (on CIS or otherwise) and/or employed (PAYE) persons to work for them. It depends on the nature of the contract/agreement and you cannot choose just because one way would appear to be the best deal for either or both parties.

There is an online employment status indicator on the HM Revenue & Customs site that should help you decide whether this person would be employed or self-employed.

The legal responsibility to determine someone's employment status rests with the employer (engager) and the new rules for CIS do not change this.

Hoddie_2

gamblep wrote:

I should have added that i am in the transport industry. HGV Owner driver.

Almost certainly he would be an employee.

As a general guide as to whether a worker is an employee or self-employed; if the answer is 'Yes' to all of the following questions, then the worker is probably an employee:

• Do they have to do the work themselves?
• Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
• Can they work a set amount of hours?
• Can someone move them from task to task?
• Are they paid by the hour, week, or month?
• Can they get overtime pay or bonus payment?

If the answer is 'Yes' to all of the following questions, it will usually mean that the worker is self-employed:

• Can they hire someone to do the work or engage helpers at their own expense?
• Do they risk their own money?
• Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
• Do they agree to do a job for a fixed price regardless of how long the job may take?
• Can they decide what work to do, how and when to do the work and where to provide the services?
• Do they regularly work for a number of different people?
• Do they have to correct unsatisfactory work in their own time and at their own expense?

Arkwright007

As a cautionary note, when you do take someone one please make sure you make out a P46 for them. Even if they work for a few hours a week. If not the Inland Revenue, on inspection, can assume that all their earnings are liable to tax and you, as their employer, are responsible for recovering it.
This will result in them issuing you with an amount to pay unless you can prove different - this can be quite a problem a few years down the road.