Is it inefficient to take on a subcontractor?

[kryten22uk]

A friend is wanting to contract in my industry for a short period (12mths) is it incredibly tax inefficient to take him on somehow in my Ltd? Havent worked out yet how it might happen, but I assume there would be a fair bit of complications. And hence worth him just setting up own company?

[Menelaus]

A friend is wanting to contract in my industry for a short period (12mths) is it incredibly tax inefficient to take him on somehow in my Ltd? Havent worked out yet how it might happen, but I assume there would be a fair bit of complications. And hence worth him just setting up own company?

Put him through a brolly; they'll pay him a % of what the client pay you for him making yourself a wee bit of profit per day.

Boomed!

[kryten22uk]

Sounds like a lot of red tape. That said, the guy has some excellent niche expertise and would easily command £1k+ per day.

[Crossroads]

For 12 months, easiest solution is for him to set up on his own

[Pondlife]

Sounds like a lot of red tape. That said, the guy has some excellent niche expertise and would easily command £1k+ per day.

You need to be a bit careful. If you're both invoicing £240K a year then you're ineligible for FRVS scheme this year (and the following 12 months) and maybe even no longer classed as a small business anymore. Only misery lies down that road.

[kryten22uk]

You need to be a bit careful. If you're both invoicing £240K a year then you're ineligible for FRVS scheme this year (and the following 12 months) and maybe even no longer classed as a small business anymore. Only misery lies down that road.

Yes, I can only imagine the horror of a £480k p.a. income!

[Menelaus]

Yes, I can only imagine the horror of a £480k p.a. income!

Yup - thus making a better argument for the brolly.

Seriously, give Lisa a ring at Contractor Umbrella; she's very good.

[ASB]

Yes, I can only imagine the horror of a £480k p.a. income!

The fact that your CT rate will go up somewhat might focus your mind.