employees or sub-contractors/freelance workers??

[uksel]

hello, a quick scenario to consider, any advice and information would be greatly appreciated...

A family friend is the director of a ltd company, a contract packing firm.

A lot of his work is seasonal, ie. xmas & new year etc, so from week to week his requirement for staff can change dramatically. He is currently employing each member of staff on a temporary basis meaning that when it comes to paperwork he has a lot to do ie. checking eligibility to work in the UK, tax deductions, national insurance contributions, employers NI contributions etc etc.

would it be possible, or difficult to pay these people on an ad hoc, freelance self employed basis, like sub-contractors?

The director could have each person sign an agreement with details outlining their responsibilities to register as self employed, with websites, phone numbers, general information like being responsible for paying your own tax and NI contributions.

This would mean he would immediately make a saving of 13% on employers NI contributions, and the paperwork and time it would save would massively streamline his company and also not take up so much of his own time with payments/deductions/red tape (with employee's rights like SSP etc).

Any accountants who feel they could offer good advice and help him run his company as tax efficiently as possible he is open to suggestion and authorised me to 'vet' possible accountants on the service they could offer. he currently turns over in excess of 500k per annum.

as much information as possible would be massively appreciated, I would be happy to send my contact details via PM to people who talk sense to continue conversations and also possibly secure a new client

thank you, I appreciate it may have been a bit of a read

[Williams lester]

Could he not ask his current accountants?

[uksel]

thanks for that :rolleyes:

his current accountant he uses because he has been with him for years, he does not seem interested in giving him the answers or doing the legwork to help him streamline his company to maximise profits

[Tej]

Change the accountant!.. there are olenty on this forum who are good

[uksel]

that is the hope tej, really looking to get some words of wisdom which would encourage/sell the services of a good accountant. hoping an accountant will post a reply, tick all of the right boxes to meet the needs of my friend and see if we cant take it from there.

he would rather not jump out of the fryin pan and into the fire.

[Jenni384]

would it be possible, or difficult to pay these people on an ad hoc, freelance self employed basis, like sub-contractors?

The director could have each person sign an agreement with details outlining their responsibilities to register as self employed, with websites, phone numbers, general information like being responsible for paying your own tax and NI contributions.


On the face of it, it sounds like these workers are employed, which means he is currently operating correctly. A personal analysis of the circumstances would establish if this is the case or not, I'll ask my colleague David to have a look at this thread as he is the employment specialist in our firm.

Employment is a matter of fact. Either workers are employed, or they are not, and there are various tests (http://www.hmrc.gov.uk/calcs/esi.htm)to determine which is which. A contract saying the worker has to be self employed cannot make them self employed if the facts point to employment. And it's the employer who HMRC will chase for tax etc if PAYE isn't operated and should have been, so it's important to get it right.

If you would like to talk further regarding your accountancy needs please feel free to drop either myself or David (dp0848) a PM to discuss further. We are a proactive firm that seeks to put our clients in the best tax position possible and are happy to discuss this with you. :)

[uksel]

thank you jenni, if you could ask david to send me a PM with his/your contact number then i will try and get in touch to see if we could consider some options

[yorkshirejames]

thanks for that :rolleyes:

his current accountant he uses because he has been with him for years, he does not seem interested in giving him the answers or doing the legwork to help him streamline his company to maximise profits

You have a PM. To be fair to the encumbent, nobody can be all things to all people. The guy who can evaluate the company at a strategic level is unlikely to be the guy who can achieve the best result on the directors' own income tax return. It is one thing for accountants to be able to add value to a business, but another for them to be able to do things which may well have not even existed when they were at university.

A client can either go to one firm who can do everything (or claim to), or go to various different providers for different things. To my mind, you have identified at least three different things your contact needs - day to day accountancy services, a possible business process re-engineering exercise, and advice about a specific compliance issue pertaining to workers.