Taking on a Self Employed Person

Tabbie · Dec 9, 2008

CAn anyone ofer any guidance? I am looking at taking on a self employed recruitment consultant to work alongside me. I have decided against taking on a paid member of staff as to be honest I am watching the pennies and have a chap who is interested in coming on board for a 6 month period before he goes to live abroad with his wife.

He wants to come on self employed as this is something he has done before and knows he can make more money being self employed as he will receive a high commission rate on everything he bills.

I will be taking 70% of the profit he makes and he will take 30% - I will be covering all telephone costs, advertising costs etc out of this 70% and the remainder is 'money in the bank'.

I am really unsure of the tax implications as well as anything esle really! I have read that I would need to have a contract in place to say that he is self employed etc - as from what I have read, because he is working from my office, using my laptop etc then this could be seen as being employed?

Any advice on this or anything I have missed would be a great help

Many thanks

MyAccountantOnline · Dec 9, 2008

Be very careful - you can not take on a self employed person that is an employee.

HM Revenue & Customs scrutinise working arrangements and do collect tax, NI and penalties where people engage the services of individuals who should be employed.

I would strongly recommend that you speak with your accountant about this and take advice from them.

Getting it wrong is very expensive!

MyAccountantOnline · Dec 9, 2008

Be very careful - you can not take on a self employed person that is an employee.

HM Revenue & Customs scrutinise working arrangements and do collect tax, NI and penalties where people engage the services of individuals who should be employed.

I would strongly recommend that you speak with your accountant about this and take advice from them.

Getting it wrong is very expensive!

Lime One · Dec 9, 2008

You can form a joint venture with this sort of arrangement and a number of our recruitment clients have this sort of arrangement. It can be done as 2 separate entities and it is a specialism of ours to ensure this does not form a status enquiry situation as per the posting by Nicola. It is not the sort of thing to do without legal advice on this tricky area but it can be done as a joint venture with the associated agreement.

MyAccountantOnline · Dec 9, 2008

This may be of interest in advance of getting some professional advice -

http://www.hmrc.gov.uk/paye/employee-freelance.htm

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Taking on a Self Employed Person

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