Putting an employee through your Ltd

**Nixon Williams** · 2 March 2009, 19:04

Originally posted by Sausage Surprise View Post

I'll be asking my accountant (NW) in the morning but just thought I'd run it by the collective wisdom of the CUK forum first.

Mate of mine has a contract for 5 weeks - this is his first contract and he is obviously not set up as Ltd or brolly as yet - the agency are insisting he choose one or the other.

He asked if I can put him through my company as an employee for this 5 weeks - effectively I'd be acting as his brolly.

If he sticks with contracting he'll start his own ltd but for the initial 5 weeks says he would rather pay me than a brolly.

Anyone else been down this route? Would there be any major problems with this set up? I'd expect the accountant to charge more but is there anything else?

Whilst this is possible, an issue will be if you are on the Flat Rate VAT scheme - you may exceed the threshold limits, thereby forcing you to exit the scheme.

Another issue to consider is employment law etc, whilst you hope this will not arise, this could cause problems if something you did not expect happened.

If you do add him to your payroll, remember you have costs of employment such as Employers NIC, so you cannot simply pay him what you receive from the agency/client.

Hope this saves you a call in the morning!!

Alan

**Grinder** · 2 March 2009, 20:03

Turnover limit is £225,000 ongoing - will the 5 week contract push you over this? If you drop back the following year you can remain within the scheme.

I'd be worried about the other aspects - you'd be responsible for your mate's activities during conduct of his work. For example, if he kills someone driving to site, you would be liable. This is an extreme case - there are all sorts of rules like working hours, health & safety, redundancy, maternity, etc..

**Sausage Surprise** · 2 March 2009, 20:33

Originally posted by Grinder View Post

Turnover limit is £225,000 ongoing - will the 5 week contract push you over this? If you drop back the following year you can remain within the scheme.

I'd be worried about the other aspects - you'd be responsible for your mate's activities during conduct of his work. For example, if he kills someone driving to site, you would be liable. This is an extreme case - there are all sorts of rules like working hours, health & safety, redundancy, maternity, etc..

Are you sure? Why would an employer be liable for an employee's driving?

**Grinder** · 2 March 2009, 20:42

Its all about being on company business. I was an employee until middle of last year, and the company insisted having filed copies of my insurance certificate (showing that business use was included), last service invoice & MOT (to prove the car was roadworthy).

Basically anything you do during work hours, the employer is liable for.

I forgot to mention sick pay - you'd be liable for that too.

**dmini** · 2 March 2009, 22:41

A friend of mine did do this for me when I did contracting first - I had been badly stung through P4 previously - and this new contract was initially for a week, as I remember. Ended up for about 6 weeks or so, till I found a good brolly.
No tears - all went smoothly. Probably less acceptable now to a lot of agencies though than it was 5 years ago.
Its two way though - I have since passed him a contract which has generated a huge amount of ongoing work since that point

**Archangel** · 3 March 2009, 08:05

What happens if he gets very ill in week 1, are you going to pay him sick pay? Do the work for him? Find a sub? Get sued by the client//agency?

Do you have employers liability insurance?

Can you be bothered to operate the extra PAYE?

Just tell him to go to a brolly.

**BrilloPad** · 3 March 2009, 08:08

How much will it make you? Is it really worth the hassle and potential downside?

I dont like mixing business and pleasure.

**krytonsheep** · 3 March 2009, 09:04

For 5 weeks, I'd tell him to go with a brolly. Messing around with P45's, expenses and employers liability insurance for the sake of a few quid isn't worth it.

**jmo21** · 3 March 2009, 09:05

Originally posted by BrilloPad View Post

How much will it make you? Is it really worth the hassle and potential downside?

I dont like mixing business and pleasure.

Totally agree, it's not worth it.

Putting an employee through your Ltd