Expansion Options

[diyroberts]

Hello,

My business is currently expanding and we're currently looking for a bigger premises. The problem is that I'd like to bring some of my contractors into the office to work alongside me, but at present I can't afford to pay them all a salary

I see my options as below:
1. Invite a few of my contractors to work with me in my new office and split the rent. We get the benefit of cheaper rent, and we can communicate and help each other better. I give them work as I get it and then they do their own work when they have time too.

2. Invite a few of my contractors to work with me in my new office and split the rent. We get the benefit of cheaper rent, and we can communicate and help each other better. I give them full time contracts with me so that they are committed to working for me but they're still contractors not employees.

3. Invite a few of my contractors to work with me in my new office and my company pays the rent. We can communicate and help each other better. I give them full time contracts with me so that they are committed to working for me but they're still contractors not employees.


The end goal would be that they're all employees, but I need to do this in stages

Would appreciate people's comments

Thanks
Will

 

[akirk]

2 and 3 may fall foul of IR35:
http://www.hmrc.gov.uk/ir35/faq.htm
though the new Gov. has talked about getting rid of this...

I would go with number 1...

Alasdair

 

[diyroberts]

Hello,

What is IR35 all about then??

Thanks
Will

 

[akirk]

mmm - that is why I put a link there for you

it basically says that if you have a contractor working for you the majority of the time you may have to consider them an employee - i.e. NI / PAYE / TAX / etc.

it was set up to stop all the IT contractors who resigned, set up their own companies, contracted back to their employers and only paid corporation tax through dividends rather than income tax, costing the tax man a bit of money... they often did it over night and didn't even move from their desks - no Employer's NI for the employer, same pay, no employee NI / lower tax / etc. for the contractor - all a winner except the tax man, so they made it illegal! you now have to demonstrate that you are working for others...

needs checking through...

Alasdair

 

[diyroberts]

OK, thank you for this

Option 1 is the desired at the moment, but I'd be looking to hopefully take them on as full time employees within 1 year