A friend of mine is considering dipping his toe in the contracting market. I have a ltd company. Would there be a simple(ish) way of me acting as an umbrella company for him, rather than him setting his own up? Things I'm assuming:
- he will have to be an employee of my ltd, and therefore pay full tax/ni via PAYE
- I will have to pay employers NI
- I will have to charge him a fee to cover this, and a little more to cover admin costs/time
- I may need to get additional insurance cover
- When he is not working, I can lay him off with no salary
Advantages for him:
- He can try contracting without setting up ltd
- My admin fees will likely be lower than an umbrella
Advantages for me:
- My company makes a small margin on the fees
- It shows that I have a plan b / other business use of the company, which in some way should reduce my risk from an ir35 perspective
I appreciate anyone's time taken to respond, if there are a million reasons why not to do this, feel free to just say that, rather than taking it apart a piece at a time - I'm just mulling the idea at the moment and want to establish if it's a non-starter.
- he will have to be an employee of my ltd, and therefore pay full tax/ni via PAYE
- I will have to pay employers NI
- I will have to charge him a fee to cover this, and a little more to cover admin costs/time
- I may need to get additional insurance cover
- When he is not working, I can lay him off with no salary
Advantages for him:
- He can try contracting without setting up ltd
- My admin fees will likely be lower than an umbrella
Advantages for me:
- My company makes a small margin on the fees
- It shows that I have a plan b / other business use of the company, which in some way should reduce my risk from an ir35 perspective
I appreciate anyone's time taken to respond, if there are a million reasons why not to do this, feel free to just say that, rather than taking it apart a piece at a time - I'm just mulling the idea at the moment and want to establish if it's a non-starter.
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