Taking on another employee - implications?

[richy]

hi! i've got someone I've looked at their CV and they are ideal to hire in my ltd company. What I want to do is bring them on the team (currently I am the only directory+employee of the company).

I wont make the new guy a directory, just put him on a monthly salary via PAYE. Then I will send him on contracts we tender for through jobserve etc, and have him work those for my ltd company.

Does this raise any MSC or IR35 issues? I am myself a contractor, working with different clients, and I am outside IR35.

I would like to get some sort off "flexible working" employment contract drawn up for my new employee, so I can just pay for the hours he works (and give him annual leave and sick pay etc etc). Can anyone recommend any draft employment contracts for this purpose?

thx for any tips! cheers. richy

[r0bly0ns]

http://www.businesslink.gov.uk/bdotg...3858787&r.s=tl


Has some good info and in the tools bit down the side there is something to generate a statement of employment.

I am sure they provide sample contracts as well, but can't find them now!

[thunderlizard]

Does this raise any MSC or IR35 issues?
The only way your company would turn into an MSC would be if you made him a significant shareholder. If he's just a PAYE employee you're fine. IR35 won't be any more of an issue either - taxman will have a harder time arguing that he's effectively under your client's direction when he is literally under yours - but not entirely impossible.

This post makes me quite sad actually for this reason:
What you are talking about is the normal way for a company to go about doing its business: hire more staff as the available work increases. But the state of contracting is so messed up in this country that you are worried you're doing something unusual and you're expecting the law to trip you up.

The only problem I can see is "tendering through Jobserve". 99% of people on Jobserve are meatheaded agents who won't understand the concept that the person signing the contract isn't the person turning up on the client site to do the work, and you will scare them off. Even "tendering" will confuse them - they only understand "interviewing".

[Bear]

Sounds great doesn't it - grow your business into a proper consultancy. Make loads of money, don't have to do the contracts yourself.

I have thought about this and the problem i found was finding someone who would be willing to take a PAYE role but with the skills to be a good contractor. It doesn't take much for them to realise they can earn twice as much as you pay them.

If they want job security then you need to pay them an annual salary whether they earn any fees for you or not - can you afford that? If not then they have no job security anyway.

[balaplus]

You would proably need to consider employer liability insurance and probably HSE policy ??

[Epiphone]

Why would you employee want to do this? If you're going through Jobserve the client is going to either want you (as said before, they understand "interviews" not "tender") personally or to interview your employee.

Then he sees how much you're getting as gross, thinks "I'll have a bit of that" and leaves to go contracting.

But if you take him on as perm then you have to pay him even if there's no contract for him to go to.

[tay]

Its a catch 22 isnt it? Would you want to hire someone stupid enough to do this?

[richy]

hi all. thx for so many replies!

good point about jobserve, agents might not understand when it's me submitting a CV with my company name on and not getting to speak to my employee until it's "skills review meeting" (aka interview!)

will need to get an employer's liability insurance policy, thanks for pointing that one

i think some people doing short term temp contracts run their stuff through a PAYE umbrella. Many people are happier being permie as there is a bit of security as I have to keep the work rolling in for them, so its less hassle for them to do.

If I'm giving work to an employee in my office or on a client's site for a number of weeks/months I don't see any reason for him/her to know the details of what I am invoicing client for. When I was a permie I never knew what clients were paying for me to work on projects for them...
thx for replies, richy.

[tay]

Many people are happier being permie as there is a bit of security as I have to keep the work rolling in for them, so its less hassle for them to do.

You can always work on the theory that 'there is one born every minute'

My posts are not a dig at you, indeed if you get tghis working I will ve very pleased for you, but will think the person working for you is a moron.

[r0bly0ns]

There are plenty of people out there who just don't want to work for themselves.

To them, even the illusion of security you get from working as a permie for a small business is better than the risks of being in business for yourself.


When I was in my first job, getting paid a salary of £7250, I knew I was being charged out at £400 a day, but I didn't care as I knew the company had costs to pay on top of my salary......