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Taking on Staff

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    #1

    Taking on Staff

    Fellow Contractors i require your advice.

    I have a ltd company and i'm at a gig i have done before. Sadly it is within IR35 so i pay the full wac to taxman. (i'm over it now though)

    They are recruiting an i'm recommending a friend of mine who is a permie at the moment and would be going contracting for the first time. My question is should i let him trade under my ltd co name ? should i make him equal partner or take him on as staff ? and pay him salary. Would having multiple people working for the ltd co on the same site make me outside of ir35 ?

    or should i just simply say get your own ltd / umbrella cause i won't touch you with a barge pole ?

    p.s this is all going to happen in the next 4 weeks
    Thats the way the cookie crumbles
    Tags: None
    #2
    If you are on the FRS then take him on as staff with a cast iron contract that says (if you are not working your not getting paid....no sick pay etc etc).

    Then pay him using PAYE. This should get you some income from the FRS!

    Do NOT make him an equal partner.

    Comment

      #3
      Take him on as an employee, if he's looking at using an umbrella - essentially, you become the umbrella for him.

      Won't make any difference for IR35, which is assessed on a contract by contract basis.
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      Comment

        #4
        If you're thinking about taking on staff (even if they are mates), then I would recommend you join the FSB for about £100 a year. They offer lots of free legal support for small employers who take on staff.

        I'm a member and although I don't need many of their services, I am aware that lots of small businesses just blunder into taking on staff and get into serious legal trouble later on when things turn nasty.

        I agree that you should never give out shares unless you really have to.
        It's my opinion and I'm entitled to it. www.areyoupopular.mobi

        Comment

          #5
          he is thinking of using umbrella company and i am on FRS. So if i allow him to basically use my company as the umbrella co then i assume i pocket the extra FRS from his invoices, build up a good brand and turnover for ltd co.

          Would he have to be clased as Director (with no shares) or just as an employee ? where can i get hold of decent employee contract ? PCG ?

          advise so far has been great Thanks
          Thats the way the cookie crumbles

          Comment

            #6
            Taking on Staff

            Why not let him work through his own ltd company, you have the contract with the client (or agency) so you cream a bit off the top, he invoices you. I do this and it works fine. Also, having a few different companies as money coming helps with IR35.
            "Hope your doing fine". My favourite opening line in emails from certain agencies! Not only the fact they can't spell, but who actually says that?

            Comment

              #7
              Originally posted by Cooperinliverp00l
              he is thinking of using umbrella company and i am on FRS. So if i allow him to basically use my company as the umbrella co then i assume i pocket the extra FRS from his invoices, build up a good brand and turnover for ltd co.

              Would he have to be clased as Director (with no shares) or just as an employee ? where can i get hold of decent employee contract ? PCG ?

              advise so far has been great Thanks
              No - he's an employee, not a director.

              I'm not sure where you can get a contract of employment from - there are probably some templates out there on the web that you can use.
              Best Forum Advisor 2014
              Work in the public sector? You can read my FAQ here
              Click here to get 15% off your first year's IPSE membership

              Comment

                #8
                Oraclesmith advised about the contract template already - www.fsb.org.uk

                they provide legal advice/insurance and services for small businesses

                Comment

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