Multiple Sub Contractors?

[DrEvil]

In a position where I currently supply another sub-contractor to my client and there is no agency/middle man in place all works nice and I take a cut out of the daily rate.

I'm having discussions at the moment about maybe 2/3 more of them.

Does anyone know if there are any implications of doing this from a legal side?

[pmeswani]

In a position where I currently supply another sub-contractor to my client and there is no agency/middle man in place all works nice and I take a cut out of the daily rate.

I'm having discussions at the moment about maybe 2/3 more of them.

Does anyone know if there are any implications of doing this from a legal side?

The question I would ask is whether you have a contract with the sub-contractors and whether the sub-contractors have accepted liability for paying their own taxes. I don't think the Agency Regulations apply, but I defer that point to someone else to answer.

[DrEvil]

Yes there is an overall contract between my ltdco direct to end client and then individudal contracts with each sub-contract company. There is no employment related stuff like paying their taxes etc for them. Its just I bill the end client, take my cut and then pay the invoice of the subcontractor.

The schedule of work between me and the end client just lists deliverables expected of my ltdco and I just divvy up the work as I see fit and add it to the subcontract schedule of work.

Had someone telling me that I was potentially breaking MSC legislation so I'm trying to get as much advice as possible before proceeding.

[pmeswani]

Yes there is an overall contract between my ltdco direct to end client and then individudal contracts with each sub-contract company. There is no employment related stuff like paying their taxes etc for them. Its just I bill the end client, take my cut and then pay the invoice of the subcontractor.

The schedule of work between me and the end client just lists deliverables expected of my ltdco and I just divvy up the work as I see fit and add it to the subcontract schedule of work.

Had someone telling me that I was potentially breaking MSC legislation so I'm trying to get as much advice as possible before proceeding.

For the record, I don't know if my answer will be correct. I cannot see how the MSC Legislation applies if your company has a contract with the client and a contract with the sub-contractor ltd company. I hope you find the correct answer soon.

[Fred Bloggs]

For the record, I don't know if my answer will be correct. I cannot see how the MSC Legislation applies if your company has a contract with the client and a contract with the sub-contractor ltd company. I hope you find the correct answer soon.

I agree, can't see how MSC legislation applies here if there are B2B contracts in place between Ltd Cos.

[xchaotic]

I bill the end client, take my cut and then pay the invoice of the subcontractor.

Sounds like a winning plan and how capitalism works in general.
As always the downside is you're relying on other people to get the job done, but it seems you've got this figured out.

[Wanderer]

Had someone telling me that I was potentially breaking MSC legislation so I'm trying to get as much advice as possible before proceeding.

Have a read of this: HM Revenue & Customs:Managed Service Companies

Sounds to me like your subbies are running their own LTD companies rather than being shareholders in your company then it's unlikely that you fall foul of the MSC legislation.

[thunderlizard]

I agree with everybody else.

Mightily depressing that at the slightest hint of entrepreneurship, someone assumes it must be breaking some law or other.

[DrEvil]

Thanks everyone

Yes Wanderer my subbies are just regular contractors with their own ltdcos' etc.

I've had the same response from elsewhere too as well as my clued up accountant. His only additional advice was to watch the principle business activity but I'm a fair way yet from making more from that than I get in for myself.

The problem seems to be an agency guy who found out (long story) I was possibly taking on a few more people and didn't take kindly to me saying I dont use agencies and only take people I know and trust. He then took offence and starting spouting all this ?? Needless to say I wouldn't be using him even if I did need an agency .

[SueEllen]

The problem seems to be an agency guy who found out (long story) I was possibly taking on a few more people and didn't take kindly to me saying I dont use agencies and only take people I know and trust. He then took offence and starting spouting all this ??

Explains everything. Very few agents seem to know anything about the bits of contract law they deal with.