Small business advice

irn_bru

Hi all,

In order to make a bit of extra money I've started a small business specialising in linking self-employed odd-job people with potential customers. Basically I have a website that offers the kinds of services that people can offer and when customers get in touch I organise someone to do the work. The people who do the actual work are self-employed and pay me a small precentage of what they earn from each job, which I invoice them for.

All fairly straightforward but I want to ensure it's absolutely legitimate. Some customers want to make payments to my business rather than the the person doing the work, in which case I would invoice them and then the 'worker' will invoice me. Is this ok or does there come a point where I would be deemed an employer?

Anything else I should watch out for? I'm registered self-employed for this work as a sole trader.

phill99

You won't be an employer. The people doing the work get work from a number if sources and bill them independently.

However, in this scenario you would be classed as a contractor and the guys doing the work will be your subcontractors. Because if that you will be liable to register under the Construction a Industry Scheme (CIS) as it is classed as building and maintenance and deduct tax from their labour costs. This is when it gets complicated.

It's far easy to get customers to pay guys for the work and you then invoice them for the lead.

irn_bru

What if the odd jobs are nothing to do with construction or maintenance?

Mistral001

phill99 wrote: »

You won't be an employer. The people doing the work get work from a number if sources and bill them independently.

However, in this scenario you would be classed as a contractor and the guys doing the work will be your subcontractors. Because if that you will be liable to register under the Construction a Industry Scheme (CIS) as it is classed as building and maintenance and deduct tax from their labour costs. This is when it gets complicated.

It's far easy to get customers to pay guys for the work and you then invoice them for the lead.

This is some good information. Also note that you will probably have to charge VAT if the number of handyman you employ or pay as self-employed contractors means that your turnover goes over the VAT threshold. If your customers are non-business they will not be able to claim this VAT back.

In other words if you are hiring self-employed handymen who do not need to charge VAT as they are below the VAT threshold and you take, say 5 % profit the cost to the non-business customer will be 25% more than if the handyman just charged the customer himself.

irn_bru

Thanks both. I should clarify as it may make a difference, the 'handymen' are actually out of work mothers and the odd jobs are mainly domestic chores. I'm some way off having to worry about VAT but it's a good point nonetheless.

phill99

irn_bru wrote: »

Thanks both. I should clarify as it may make a difference, the 'handymen' are actually out of work mothers and the odd jobs are mainly domestic chores. I'm some way off having to worry about VAT but it's a good point nonetheless.

If they are out if work and claiming benefits plus working for you/others that will open up a whole new can of worms!

Mistral001

irn_bru wrote: »

Thanks both. I should clarify as it may make a difference, the 'handymen' are actually out of work mothers and the odd jobs are mainly domestic chores. I'm some way off having to worry about VAT but it's a good point nonetheless.

Sorry to be so negative. If you are only hiring women, then you could be breaking the Sex Discrimination Act. I am not joking there was a similar type of business in the Dragons Den a few years ago and this issue was a major problem.

phill99

Mistral001 wrote: »

Sorry to be so negative. If you are only hiring women, then you could be breaking the Sex Discrimination Act. I am not joking there was a similar type of business in the Dragons Den a few years ago and this issue was a major problem.

But the OP isn't suggesting they are only women, nor has he suggested he will only offer the services of female domestic helpers. If he is just acting as a 'broker' which it would appear, then any person offering the required service could register.

irn_bru

phill99 wrote: »

If they are out if work and claiming benefits plus working for you/others that will open up a whole new can of worms!

That's rather presumptuous isn't it? I meant they tend to be out of work until they start working through my business. I don't believe I have any responsibility to delve into their personal affairs though do I?

irn_bru

phill99 wrote: »

But the OP isn't suggesting they are only women, nor has he suggested he will only offer the services of female domestic helpers. If he is just acting as a 'broker' which it would appear, then any person offering the required service could register.

Thanks, you are correct. All are welcome!

phill99

irn_bru wrote: »

That's rather presumptuous isn't it? I meant they tend to be out of work until they start working through my business. I don't believe I have any responsibility to delve into their personal affairs though do I?

Ok, I understand. It wasn't clear, that's all.