Employing Someone YES/NO ?

gamblep

Hi,
I am a one man operation and have the opportunity to expand. My business is haulage and it would mean me purchasing a second truck and employing a driver. This is what worries me... What happens if the driver where to be off sick ? Do I have to pay him? This would make the expansion plans non-viable straight away if so as theres not much of a profit margin to begin with.

Also, say he was with me for 6 months and then began to regularly miss work for "dubious" reasons? Can I get rid easily? I know it sounds harsh, but I have been doing this on my own for 4 years as an owner driver and never had a day off and never let any customers down. Whoever I take on could damage my reputation so I need someone to be 100% reliable.

In a bit of a dilemma, help, comment, give me your experience!! Anything Appreciated.

Thanks.

gamblep

I forgot to add, what paid holiday entitlement per year would i need to give to any employee? Also, what is the current level for employers NI? Ta.

Andy_L

http://www.businesslink.gov.uk/

in particular statuatory sick pay
http://www.businesslink.gov.uk/bdotg/action/detail?r.l3=1074407226&r.l2=1073876962&r.l1=1073858787&r.s=sc&type=RESOURCES&itemId=1074411377

squeaky

Hi gamblep

We have a board dedicated to small businesses which might well be of help to you with this and any other questions you might have (unless they're about tax, of course:)) so I'll move your post across there for you.

Good luck

the_optimist

Would it be possible to sub-contract some jobs to other self-employed drivers? That way you wouldn't need to buy another truck, nor would you need to pay for holidays, tax etc.. You just agree on a price and the driver would invoice you.
This happens in lots of other areas but I don't know whether this is possible in haulage.

jellyang

Your question has many answers.
I have run a transport business for 18 years , although not hgv but close enough.

Personally if I had my time again I would handle the employee road very different.

Please feel free to send me a private message if you would like more details/advise

presenthyme

i have ran a small business and have been blessed with some excellent employees.
HOWEVER
i have also worked for a number of companies where the staffing has been horrific.
i am sorry to say most of these employees have been female and are off work at the drop of a hat, for example one of my "colleagues" has had 10 weeks off this year with various illnesses.
it is very difficult to get rid of these leeches and a sole trader business could not afford the loss of any employee, wheras the larger businesses could withstand the loss and it tends to get put up with in these organisations, which simply perpetuates the problem.
IF
if you must employ someone i would suggest keeping it in the family as most family members would have a similar work ethos as yourself and if they are off work for any reason your payments are supporting a family member

Savvy_Sue

presenthyme wrote:

i am sorry to say most of these employees have been female and are off work at the drop of a hat, for example one of my "colleagues" has had 10 weeks off this year with various illnesses.
it is very difficult to get rid of these leeches and a sole trader business could not afford the loss of any employee, wheras the larger businesses could withstand the loss and it tends to get put up with in these organisations, which simply perpetuates the problem.

I do hope you're never ill for any length of time yourself ...

But to contribute to the original question, as well as the useful links already given, if you do decide to go down the employment route, there is a dedicated HMRC phone line for new employers and I always found them very approachable and helpful.

Be aware that the decision about whether someone is self-employed or not actually rests with HMRC rather than you and the employee. My understanding is that if you farm jobs out to a number of individuals who regularly do work for others, you will probably be OK to treat them as self-employed. If you regularly use one other person who does little or no work for anyone else, you might not be. There was a cautionary tale on this board, quite a while back, about someone who'd been using a van driver on an occasional basis, and paying them as self-employed, but HMRC had decided that in fact the driver was an employee, and there was a rather large tax bill to pay.

If the other driver provided their own van, that might make a difference to HMRC's decision. But if you want your livery on the van, I can foresee that making life complicated.

There is a LOT to think about!

mikewebs

presenthyme wrote:

if you must employ someone i would suggest keeping it in the family as most family members would have a similar work ethos as yourself and if they are off work for any reason your payments are supporting a family member

I would be extremely careful about employing family or close friends. You could end up ruining perfectly good relationships if things go wrong.

If you know that, for example, you need a driver a week next tuesday for two day, why not use an agency? You get staff - I know you have to pay agency rates but you have no hassle re NI, Tax etc and you would be covered in the event of sickness because the agency would bring in someone to replace them?

Only a thought but i hope this helps.

WHA

It is actually very common in the transport/haulage industry to use self employed drivers. As long as they are truly "self employed" i.e. they provide their own vehicle as a definite and hopefully do delivery work for others, then you should be OK. What you can't do is provide someone with a van yourself and agree between yourselves that they're self employed!

As you are a "one man" operation, I would have to strongly advise against employing anyone. That first employee is always the worst in terms of hassle, red tape, and dependance upon them. Once you are larger and have, say, 5 employees, then one bad apple won't ruin you, but if you only have 1 or 2, you are literally starring financial disaster in the face if things go wrong.

That is why there are so many small businesses with no staff at all - a very large proportion would really love to employ someone, but the balance is weighted very much to employee rights and a very small business just can't hope to survive a problem employee.

Most small businesses will use genuine subcontractors/self employed workers as they start to grow and then take on staff as the step after that when they're a lot bigger.

SonniC55

A quck word of caution here.
It is no longer acceptable practice to agree between yourselves if a person works on a self-employed basis. before doing this check the circumstances with HMRC as they will have the final say.
paying someone on a self-employed basis on the term of a 'gentlemans ageement' or because they told you they are self-employed could result in a costly error further down the line.
The basic rule now is if in doubt treat as employed untill HMRC agree otherwise