Supplying another contractor to my client

**eek** · 16 February 2021, 14:49

Originally posted by velcro View Post

I'm currently contracting direct to my client and they've today asked if I could supply a person to cover maternity leave for another role. I've only ever supplied my own services in the past, but think this is maybe the way I want to go in the future.
This would most likely be an Inside IR35 role, and so which would be best way to emply someone - PAYE or via Umbrella?
I asked my accountant for their input, but what else do I need to consider?
Insurance / regulations, etc?

You will need appropriate insurance but use an Umbrella it will allow you to avoid sticky employment issues.

**northernladuk** · 16 February 2021, 15:09

Can't you just get an agent to do it for a referral payout? Could be a lot of effort and responsibility for you to manage, insure and pay this person and, unless you are going to proper shaft them, there won't be much margin in it.

If you can grow in to sole supplier then happy days but a one off is a pain. I'd be careful organising this OK client time as well. Its not what they are paying you for really.

**velcro** · 16 February 2021, 15:18

Originally posted by eek View Post

You will need appropriate insurance but use an Umbrella it will allow you to avoid sticky employment issues.

Thanks eek

**velcro** · 16 February 2021, 15:26

Originally posted by northernladuk View Post

Can't you just get an agent to do it for a referral payout? Could be a lot of effort and responsibility for you to manage, insure and pay this person and, unless you are going to proper shaft them, there won't be much margin in it.

If you can grow in to sole supplier then happy days but a one off is a pain. I'd be careful organising this OK client time as well. Its not what they are paying you for really.

Yes, I could just pass it on to an agent, but I'm thinking I've been contracting a good while now and maybe it's time I start thinking a bit bigger. Agreed, just one person probably would be a pain to organise and not much margin, but if I get ten or twenty people working for me then happy days.

**northernladuk** · 16 February 2021, 16:12

Originally posted by velcro View Post

Yes, I could just pass it on to an agent, but I'm thinking I've been contracting a good while now and maybe it's time I start thinking a bit bigger. Agreed, just one person probably would be a pain to organise and not much margin, but if I get ten or twenty people working for me then happy days.

But you need to be clear what bigger is. Every contractor has dreamed about getting a body on site or to provide a service and it very very rarely happens and where it does is because the contractor could make it work. What is a bigger you? A consultancy or an agent? If you get 5 odd people on site the admin burden will be more than you can do and still provide your work. Ten or twenty on what margin? Enough that you can start being an agent and not a contractor. What happens when you aren't on site anymore? When and how can you resource these ten or twenty people? yadda yadda

The person you are sourcing isn't working working 'for' you. You've just supplied a bum on a seat. This type of stuff only works if a direction and a business plan.

**velcro** · 16 February 2021, 16:47

Thanks NLUK. At the moment, I need to find out the requirements so I can work out what the business plan would look like, and how best to make my business grow in the right way. It's very early stages.
Personally I've gone about as far as I can in my line of work, so if I'd take people on they'd most likely be juniors, but I'd be using my experience and contacts to get the work and give them pointers.
As I'm on a direct gig at the moment with the client, I've got the rare opportunity to supply with no agency. It feels like I should take advantage of that. (Getting more clients would be the very hard part).

**Paralytic** · 16 February 2021, 17:16

Just as many people have become "accidental landlords" and somewhat regretted it, I'd be wary of becoming an "accidental consultancy" just because this opportunity arose.

If this has been part of your long term plan, then thats great and make the most of it, but don't underestimate the huge differences between running a one-man contractor company and a consultancy where you're responsible not just for your own work, but for those you employee/subcontractors.

**Lance** · 17 February 2021, 10:19

Originally posted by Paralytic View Post

Just as many people have become "accidental landlords" and somewhat regretted it, I'd be wary of becoming an "accidental consultancy" just because this opportunity arose.

If this has been part of your long term plan, then thats great and make the most of it, but don't underestimate the huge differences between running a one-man contractor company and a consultancy where you're responsible not just for your own work, but for those you employee/subcontractors.

Being an accidental consultancy is fine. It makes money. It would also, arguably, be a breach of your fiduciary responsibility to turn down profitable work that you can fulfil.

Being a failed consultancy is different. That loses money. It's immaterial whether you get there by "accident" or strategy.

**northernladuk** · 17 February 2021, 10:51

Originally posted by Lance View Post

Being an accidental consultancy is fine. It makes money. It would also, arguably, be a breach of your fiduciary responsibility to turn down profitable work that you can fulfil.

Being a failed consultancy is different. That loses money. It's immaterial whether you get there by "accident" or strategy.

But he has to be clear what he is. A consultancy doesn't really just put bums on seats. That's an agency.

Supplying another contractor to my client