Becoming an employer?

Andyaero

Bit of a query for those of u with experience.....
In Dec the Mrs set up her own domestic cleaning business as a sole trader. It's gone mental and she filled the 38 hours a week she wants to do within a month. We are confident, given the level of interest that we could double the clients within a month if we employed or contracted out work. She's already had people asking if she's employing,
this is something we never intended to do, she wanted an easier life from her past managerial responsibilities, but we never expected it to take off like this. I can see potential and £.
Loathe to get into employing people due to the admin, legal costs and things like hol pay etc.

So as a hypothetical scenario, can we use other cleaners as a contractor to the business? They are given a rate for the job and work independently. They are paid by us and payment of any tax due is their responsibility.
We would require an invoice from them for our tax return......thereby hopefully encouraging them to be above board with their own business as there would be a paper trail for HMRC.

Or.........

could I set up a business as a cleaning recruitment agency and supply her business with staff. I am currently employed in retail management and used to recruiting staff and happy to partake in the necessary admin, where she is not. Whilst in theory I'm an agency, I would only be supplying her, is this not ok?
In essence we are considering expanding the business, without the complication of employees, but also keeping the tax side legit.
Is this doable and legal, preferably both!
Any thoughts whilst I muse and think out loud? 😁

Jeremy535897

If the other cleaners are already self employed, it is more likely that they will be able to be treated as independent subcontractors, because they are more likely to demonstrate the independence required to show that they are not employees. However, each case is determined on its facts. See https://www.gov.uk/employment-status/selfemployed-contractor and remember that the onus for getting this right (and the penalties for getting it wrong) will fall on your wife.

You also need to look at IR35, but probably more importantly, your wife may have to become VAT registered if the volume of her business including the subcontractors exceeds the registration limit. There may also be insurance and liability issues, as there would be with employees.

It's not an area where I have any expertise, but if your wife brings nothing to the party but an introduction to another cleaner, treat it as such and just charge the other cleaner an introductory fee. If there is more to it than that, a franchise model may be better.