Sole Trader Question

[Tiggy]

Hello All

I will need to hire staff for my events business. It will be for 3 - 6 hours in the evening, depending.


As a very small sole trading operation I will be asking them to sign a form which means that they are responsible for their own tax and will be paying them by cash or cheque.

Does anyone know if there is any reason, legally, i should not do this?
I'm hoping I do not have to be a limited company.

Many thanks

Tiggy

 

[SuffolkDesigns]

Hi,

I don't know the in's and out's of paying casual labour nowadays, but I do know you do not have to be a limited company to do so.

The last time I paid casual staff I **think** I had to deduct tax from their money at the "emergency" tax rate and give them the rest.

 

[Jayne]

Hi,

Part time staff under a certain limit don't pay tax and NI. It's about £80 I think, (Check with accountant), so you could put them in your books as casual labour, depending how much you paid them per hour.

Best Wishes

Jayne

 

[Astaroth]

I do not know the legalities of what you are suggesting however you would have to remember that the employer has to pay ni in addition to that which the employee pays - if you are correctly doing that may you not as well deduct the employees ni/tax at the same time?

If you keep them below the threashold then just log them as casual labour but an accountant will be able to give you difinative advise

 

[gj]

Hi Tiggy

You take a risk by not deducting tax. If the revenue subsequently rule that they were employees (and it depends on a lot more than just you having them sign to say they are responsible for their own tax and NI), the Revenue can charge you for the tax and NI that should have been deducted had they properly been treated as employees under PAYE, plus employers NI, plus interest for late payment plus penalties for failing to operate PAYE correctly.

The problem is that the amounts may appear small per person, but if the Revenue came in in say 4 years and took alook at 4 year's worth of payments, there could be a large bill you are facing. Safest is definitely to deal with them under PAYE.

Having said all that, depending on how they actually work, and the fact that there may be no ongoing obligation for you to provide them with work or for them to take work which you may offer them, it is possible that they could have contracts which would mean they are genuinely self employed. It would be important to have written contracts in that case.

Sounds to me like you should talk to an accountant before too long the cost could well save you a lot of money and heart ache in the long run.

HTH

Graham