Employee/Sub Contractor/Self Employed?

[dominict]

I am a sole trader completing works for various landlords on their properties. My business has grown quickly and I needed help on a day to day basis. I found someone to help and have taken him on on a self employed basis paying him a daily rate. I am wondering if I need to tell HMRC anything with regards to this? He will be invoicing me for the work. Do I, or the person who is helping me, need to register for on the CIS? I have spent some time doing research but its a bit of a minefield so would appreciate any help on the matter. If they are only working for me would it make more sense to employ them?

 

[The Byre]

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:

• they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
• they can decide what work they do and when, where or how to do it
• they can hire someone else to do the work
• they’re responsible for fixing any unsatisfactory work in their own time
• their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
• they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
• they can work for more than one client

You can check someone’s employment status here https://www.gov.uk/guidance/check-employment-status-for-tax

 

[Newchodge]

You both need to register for CIS. As has been mentioned you need to make sure that he is a sub-contractor and not an employee.

 

[MattRumbelow]

So, there might be a few matters on self-employment that you may want to consider.

For a start, on most issues, the HSE says you have the same health and safety responsibilities to a self-employed person in your pay as to an employee. I recently wrote an article on health and safety and this point comes up a lot.

The Byre made a really good case for what constitutes self-employment. I was reading somewhere that it's quite common for farmers to try and hire 'self-employed' people on an essentially-permanent basis to try and skirt costs, only for it to become a problem down the line when it's realised that, by all measures, they're acting as 'traditional' employers.

I think some really big questions are, does the person have the right to seek other work, and can they change their own hours? If the answers are no, they're employees and PAYE is probably the route for you and your employee.

 

[DWS]

You will probably find that the majority of sub-contractors working within CIS should be employees but in reality it never works that way.
First thing to do is check the works you are carrying out is within CIS, if it is then as said above you will both need to register and then you can make the necessary deductions.

 

[bodgitt&scarperLTD]

You will probably find that the majority of sub-contractors working within CIS should be employees but in reality it never works that way.
First thing to do is check the works you are carrying out is within CIS, if it is then as said above you will both need to register and then you can make the necessary deductions.

Indeed- the whole reason CIS came about was becase of dodgy 'subcontractors' within the construction trade not paying their tax!

 

[SteveHa]

You both need to register for CIS. As has been mentioned you need to make sure that he is a sub-contractor and not an employee.

Are you sure? There's nothing in the OP to suggest that the work being done is even within CIS. There's every chance that none of it is caught by CIS rules, but without further information it's impossible to know.

 

[Newchodge]

Are you sure? There's nothing in the OP to suggest that the work being done is even within CIS. There's every chance that none of it is caught by CIS rules, but without further information it's impossible to know.

I realise it is a slight leap, but I cannot imagine

I am a sole trader completing works for various landlords on their properties.

can mean many other things than CIS-related work.