Short term assignment for additional contractor

[ContractorBanking]

I'm working on a project where I've been given a small budget for 8 man days of work for an additional contractor, to speed up the project.

Contractor would work from home doing some of the "mundane" work which I would outsource to him. He is not required to be on site so end client doesn't have visibility of the additional resource.

I have a colleague who I trust to get the work done. He's taking a year out and his Ltd Co is now closed.

What's the best way to handle such a small piece of work? Can I pay him as a sole trader and he can pay his taxes on his self-assessment?

Or is there a better way?

thanks

[gixxer]

Interesting...having people to whom you can delegate work and therefore scale up the business was likely the main reason why I drifted from asset management advisory into project management. What is for you an issue is pretty much my goal. Good for you. :-)

My ltd is not (yet) in the UK so can not provide a guidance. I ask to have invoices written; from there on it is not my business any longer.

[northernladuk]

Firstly what do you mean you've been given budget? Your project or your LTD company?

I don't want to be rude but your initial posts have been about some pretty basic stuff so you are still finding your feet about what you do. I just wouldn't bother with this and the complexities around it for such a short period of time. If your project has been given budget then I'd refer your friend to your client and let them deal with it. It's just not worth the hassle for the small amount of money.

That said if you as a LTD have been bunged a couple of extra quid to help out and it wouldn't be possible to supply this guy through normal channels then your first stop, as it should be always, is your accountant, not a bunch of not rights. The option the accountant might not suggest is bill it and just bung the guy some cash in hand.

[FarmerPalmer]

I would be wary of sub-contracting to self-employed, as if they don't declare the earnings then your company will be liable for any unpaid tax and NI.

If they don't have a limited company then it would be better for you to make them PAYE on your company for the work.

However if it is only 8 days work, then offset the risk and associated cost of worst case against the extra work of invoking PAYE for a short period, and weigh up how risk averse you are.

I would personally take the risk for that small an amount.

However, as others have suggested, talk to your accountant.

[jamesbrown]

TBH, this sort of very short-term subcontracting is hardly worth the effort any more. In particular, note the intermediary reporting requirement.

[LucidDementia]

I don't see a massive problem, although VAT could be a pain if you're on the flat rate scheme. The reporting requirement is all online so not terribly tricky, but it certainly is another point to consider if you are a bit paperwork shy.
Personally I use subbies from time to time, I have no issue working with sole traders despite the apparent horror stories. In fact some of the best accountancy firms you could choose are sole traders and non-LLP partnerships. What does that tell you? You decide....
As always YMMV so take advice on your own circumstances from your own accountant.