How to keep regular self employed subcontractors as self employed and not PAYE?

[kentcontractor]

I have a team of great subcontractors working for me premanently but I understand I should operate PAYE for them and not CIS as they are classed full time workers. Is there anyway I can keep them as my subbies as self employed? Can I use an umbrella company to keep things this way?

[eek]

I have a team of great subcontractors working for me premanently but I understand I should operate PAYE for them and not CIS as they are classed full time workers. Is there anyway I can keep them as my subbies as self employed? Can I use an umbrella company to keep things this way?

I doubt anyone on here can help you. The people here are mainly freelance IT and Business Consultants rather than Building contractors.

[LisaContractorUmbrella]

This will confirm whether or not you should be operating a CIS scheme: HM Revenue & Customs: Are you a contractor or subcontractor under CIS?

[Martin at NixonWilliams]

I have a team of great subcontractors working for me premanently but I understand I should operate PAYE for them and not CIS as they are classed full time workers. Is there anyway I can keep them as my subbies as self employed? Can I use an umbrella company to keep things this way?

There's nothing stopping you from continuing as you are, but if the subcontractors work for you permanently then it is likely that HMRC would view them as workers or employees (the two are not the same). If this was the case you would be liable for PAYE & NI deductions on their pay.

To err on the side of caution, make them your employees. If you continue as you are, make sure they are paying their taxes!!

[john@UKCA]

HMRC Status Enquiry

I would recommend you get the subcontractors to invoice you some element for materials supplied each month which is shown seperately on their invoices (that's if they do one for you?). Small items for materials can include for example screws, sealant, staples, nails, tape, paint etc.

If no invoices issued then prepare them yourself each month to match their payment and get them to sign as approved. This will help on any status enquiry from HMRC. May also help if they use a trading name rather than their own names and use their own tools.

[LisaContractorUmbrella]

I would recommend you get the subcontractors to invoice you some element for materials supplied each month which is shown seperately on their invoices (that's if they do one for you?). Small items for materials can include for example screws, sealant, staples, nails, tape, paint etc.

If no invoices issued then prepare them yourself each month to match their payment and get them to sign as approved. This will help on any status enquiry from HMRC. May also help if they use a trading name rather than their own names and use their own tools.

Wouldn't those costs then be classed as expenses which presumably would have a tax benefit?

[john@UKCA]

Wouldn't those costs then be classed as expenses which presumably would have a tax benefit?

tax benefit for who? the subcontractors would have these costs shown in their self-employed accounts and would just merely show them as costs on their invoice to the client. The fact that you are invoicing for materials is a tick in the right box for self-employment status.