Place a temp worker on a client site via Ltd company

[ITMATE]

Hello All,

Recently jumped into the world of contracting and so far so good - thanks to various articles on this site and discussion forums, I gathered the courage to take the plunge.

Situation:
I have my own Ltd company and am contacting at Client-A. I came to know about a temp-job requirement at Client-B. I know someone who I could place at Client-B but am not sure of the process and responsibilities that this may entail.

Whole idea here is to earn a fee on daily-rate for the person whom I intend to place at Client-B. I do not wish to take him as an employee of my company but simply as a Temp-Worker on a short term contract(not sure if Sub-Contracting is the right word). So the way it would work(IMHO), I would Invoice Client-B, Pay a fixed Fee to the temp-worker, pay VAT, CorpTax to HMRC for remaining profit(fee) and not fall foul of legislation etc.

Any pointers or advice on how to proceed ahead and pitfalls would be highly appreciated.
I have already checked some threads including: Contractors' Questions: Any risk to subcontracting some work to a PSC? :: Contractor UK

Regards
IT

[TheCyclingProgrammer]

You could employ a temporary worker on a fixed-term contract. You would need to add them to your payroll and deduct tax and NI via PAYE.

If you want to sub-contract them, they could invoice you just like you invoice your clients. Their tax is their responsibility but with one caveat; if they are self-employed and you're exercising a degree of control over them that could be construed as an employer/employee relationship, you could find yourself liable for unpaid tax/employers NI. Alternatively, if they also operate through a Ltd company then its simply a B2B transaction and they will have to consider IR35 and whether or not it applies to their engagement with you.

As far as Client B goes, you would be contracted to them and will invoice them for supplying somebody to do the job.

The risk in either case is that you've got to pay them, regardless of whether you get paid by Client B.

[LondonManc]

You could employ a temporary worker on a fixed-term contract. You would need to add them to your payroll and deduct tax and NI via PAYE.

If you want to sub-contract them, they could invoice you just like you invoice your clients. Their tax is their responsibility but with one caveat; if they are self-employed and you're exercising a degree of control over them that could be construed as an employer/employee relationship, you could find yourself liable for unpaid tax/employers NI. Alternatively, if they also operate through a Ltd company then its simply a B2B transaction and they will have to consider IR35 and whether or not it applies to their engagement with you.

As far as Client B goes, you would be contracted to them and will invoice them for supplying somebody to do the job.

The risk in either case is that you've got to pay them, regardless of whether you get paid by Client B.

This is the big one. There's an element of trust involved. It may be easier to point your friend at Client B via an umbrella company.

[northernladuk]

Ah.. The pipe dream of every new contractor

Find an agent that can place someone on that site. Agree a finders fee, find him a bod and pass it to him and pocket the finders fee.

Double whammy would be to contact a potential candidate and agree an introduction fee off him and pocket that as well.

[Neil@Intouch]

If you want to sub-contract them, they could invoice you just like you invoice your clients. Their tax is their responsibility but with one caveat; if they are self-employed and you're exercising a degree of control over them that could be construed as an employer/employee relationship, you could find yourself liable for unpaid tax/employers NI. Alternatively, if they also operate through a Ltd company then its simply a B2B transaction and they will have to consider IR35 and whether or not it applies to their engagement with you.

As far as Client B goes, you would be contracted to them and will invoice them for supplying somebody to do the job.

The risk in either case is that you've got to pay them, regardless of whether you get paid by Client B.

If you go down the route of sub-contracting that person to client B, you will need to consider the intermediary legislation, which requires you to report the pay to the sub-contractor from your Ltd Company to HMRC.

This would be the best route in terms of increasing your profit without the extra work, as northenladuk says, it's a 'pipe dream for every new contractor'.

There of course will be some sort of checks on the person you are going to sub-contract for the work to client B, which will be to ensure they have the required qualifications etc for the work.

[Maslins]

Ah.. The pipe dream of every new contractor

Find an agent that can place someone on that site. Agree a finders fee, find him a bod and pass it to him and pocket the finders fee.

Double whammy would be to contact a potential candidate and agree an introduction fee off him and pocket that as well.

This would be my thoughts. Should mean negligible responsibility on you/yourco.

If you subcontract work out to others, the end client will typically still hold you responsible (and rightly so). You'd be agreeing a deal with them. If you then subcontract it out and the subcontractor fails for whatever reason, that's your problem. Worst case scenario you end up with the client not paying you as the work wasn't done to standard, but you still having to pay the subcontractor as they turned up. Don't get into that kind of risk lightly.

[jmo21]

Ah.. The pipe dream of every new contractor

right up there with "lets start a website that cuts out agents".

[pr1]

The risk in either case is that you've got to pay them, regardless of whether you get paid by Client B.

depends what you agree in the contract