Liability Insurance

[SarahDinnage]

Hi all

I run a recruitment agency and have a chap who wants to work on a contractor basis and invoice for the hours he does.

Does anyone know what employment checks if any I need to do, I assume if he is operating on his own basis I dont need to check his Eligibility to work in the UK. I was also wondering if I should be asking him for copies of insurance or would he be covered by the Public Liability insurance on the client site he is working on? Having spoken to our insurers he's not covered by ours as he's not on our site.

Any advice appreciated.

 

[PhilWarman]

It depends if he supplies his own tools and materials...if he does then he needs his own Liability cover, if not then the main contractor should cover him as a "Labour Only sub-contractor"

 

[SarahDinnage]

Hi Phil

thanks - he is a chef, his labour and knives but the materials in terms of ovens and equipment will be on the client site.

Normally according to my policy if hes on my payroll as an employee he is covered under my policy but he wants to act on a self employed basis and invoice me for the time on my clients site.

I have asked him to get it anyway because I assume as the middleman its my job to make sure someone somewhere has some cover for him if something happens.

What do you think?

 

[PhilWarman]

I think you've done the right thing Sarah.

I suggest you to get a copy of the public liability schedule just to cover yourself.

 

[Richie N]

Sarah

Still ensure you carry out his Eligibility checks, whether he is self-employed or not, you still want to cover yourself and have all the necessary documents on file in case you ever get an inspection.

 

[SarahDinnage]

Hi guys

Thanks for your help, Richie I was hoping you'd be about as you are in the same industry so I thought you'd know.

In the end I have set him up as a temp, I just dont like it as SE too messy, under my temp terms my clients carry liability and they have to sign the terms to say that they accept that the employee is an extention of their staff and they have them covered.

The candidates not too happy about the tax but he wants to work so he will do it, he explained he's done a lot of SE work with agencies and never ever been asked for liability insurance. Maybe I am just too cautious - it's too grey though for me to let him do it, knowing my luck I let him do that and he'll slip on a chip and take the whole kitchen down.

thanks for all your help

 

[Richie N]

Hi guys

Thanks for your help, Richie I was hoping you'd be about as you are in the same industry so I thought you'd know.

In the end I have set him up as a temp, I just dont like it as SE too messy, under my temp terms my clients carry liability and they have to sign the terms to say that they accept that the employee is an extention of their staff and they have them covered.

The candidates not too happy about the tax but he wants to work so he will do it, he explained he's done a lot of SE work with agencies and never ever been asked for liability insurance. Maybe I am just too cautious - it's too grey though for me to let him do it, knowing my luck I let him do that and he'll slip on a chip and take the whole kitchen down.

thanks for all your help

As long as he invoices you for his work and you have proof of his ID /visa etc then it's fine.
With the insurance, it should be the same as temporary workers, the clients carry the liability.
The clients will still sign the timesheet, so how you pay the worker is between you and him, not the client.

 

[kyeb]

The tax consequences are worth considering in more detail as well as the insurance.

People engaged by an agency should have PAYE and NI applied to any payments they are due. This is set out in s.44 of the Income Earnings and Pensions Act 2003.

An agency can engage self-employed people but must operate PAYE and NI on any payments they make to them. Other agencies may have engaged him on a self-employed basis in the past and paid him gross but that is not advisable and you would be exposing your business to HMRC issues.

He would therefore have to work either through a limited company or suffer the PAYE and NI being stopped as a temp.

Kye Burchmore