i am taking on some people for a project.

March2012

i can pay them self employed . do they need a utr number for this? or can i just get them to write to me with their passport that they have a right to work in uk and make their own tax declarations? if you could let me know that would be great. i just want to make sure i am doing the right thing.

paddyrg

It may depend on your industry and other factors. I'd start with the gov.uk websites, or ask your accountant

Undervalued

You need to be careful as if they are deemed to be employees, despite anything they may have signed or invoiced, you could be liable for any unpaid tax, NI, paid holiday, SSP etc.

There is a guide on the HMRC website which attempts to indicate if somebody is actually an employee or truly self employed. Many people feel this is slightly twisted towards the employee answer but you do need to be careful. Just getting the person to invoice or sign to say they are self employed is not sufficient.

Key factors are if they work for anybody else, are free to turn work down, able to send a substitute, still get paid if they have to correct a mistake etc etc.

agrinnall

I'm going to guess that this is disguised employment and if you really want to do things right you should be setting up a payroll, paying them through PAYE, and (probably) doing returns to HMRC through RTI.

ACG

As above, general rule of thumb is that if you are telling them where to be and when and they are using your equipment, regardless of what they sign or your contract says, HMRC would deam them employed rather than self employed.

Taking on employees is actually not as bad as people think to some extent. I found that taking someone on who earns less than £144 a week means you do not need to set up a pension (although that may have changed). Everything else my accountant dealt with and it was pretty easy. But if they are more than part time you will have extra obligations.

I would speak to your accountant...or get one, a decent one is worth their money.

agrinnall

A note of caution on my post and some of the others has just occurred to me: if the answer to paddy's point in post #2 is that it's the construction industry then different rules apply and you can investigate operating through CIS.

paddyrg

agrinnall wrote: »

A note of caution on my post and some of the others has just occurred to me: if the answer to paddy's point in post #2 is that it's the construction industry then different rules apply and you can investigate operating through CIS.

Similarly the film industry is different - but in a different way. Just flagging it up