Staff

[Mustang]

I know people say avoid having staff but just wanted to know what (legal) options open to me if I have a couple of people that want to contract but, for a variety of genuine reasons do not want to set up their own LTD CO? It would only be for a limited time (max 1 year).

What are the pitfalls in doing so? Would I have to introduce a whole lot of policies and procedures so that I can pay Directors certain things but not employees?

All advice greatly received.

[TheMonkey]

You could employ them as employees on PAYE -or- as directors on PAYE with shares of the Limited. It'll be a bastard either way.

[dmini]

I did it through a friends company for a contract that was supposed to last only 2 days, and I had no notice of (4pm the day before), no means of payment. It lasted a lot longer though.
I did it as pure paye, no expenses. Mileage etc could be claimed back on my self assessment. But my contract was local, and I wouldn't went to stress out a friend.
Seriously - don't forget HOW you are going to pay them - if paye you could end up above the £1500/month average and have to pay monthly, rather than quarterly. Insurance? Are you going to take a cut for the delight of management. Expenses - do you REALLY want to be liable - or not. If they don't want to run their own limited, and you are talking long term, why don't you suggest an umbrella, surely that would be a better option. ContractorUmbrella takes £15 a week, Parasol takes £20 ish, pre tax. Not a lot really.

[Mustang]

One is a good friend who will contract until she leaves for OZ in March next year. Definitely a finite time. The other is my cousin who will come over from NZ for a year. She may well start up her own LTD CO if she plans to stay for over a year - doubt she will stay that long though. She runs a successful software support company back in NZ.

An umbrella is a good idea for both but I was just thinking of the "added kudos" for my LTD if they worked through/for me. It might not be worth the hassle for me.

[malvolio]

One point to remember, it's makes you much more of a proper business, which is a good start point for an IR35 defence...

[Epiphone]

Can't they just go through a brolly then you pay the brolly X amount and anything else is nowt to do with you.

[Mustang]

Mal, that was my thinking when I mentioned "Company kudos"! I could at least say that myCo has had staff even if they left! What I need to look into is how I could do it without it costing me. I could potentially agree with my "staff" an amount that would cover my costs (e.g. Employers NI, PHI)

Thanks for the feedback - keep the comments coming!

[Asterix]

Worth the hassle (maybe)

As the contract will be between the client or agency and your Ltd Co, in theory you can provide named or even unnamed resources, so you can take someone you know ie a friend or relative short-term (ie for a few days or even weeks) and provide them with a payment vehicle in exchange for a fee for admin similar to what some umbrellas charge (say 5%). I did this for a permie friend who took time off and did a short contract that I couldn't fill. Anything longer, ie 3 months +, you may need to add them (and delete later) as directors, thereby making them personally liable for tax etc (although anyone staying less than a year in the UK can claim back etc), after deducting 20% from their total pay to allow for CT and assuming exemption from IR35. So 75% net is not bad for them without having to lift a finger and getting in effect cash in hand. Not something I would recommend though unless it's a favour for a trustworthy friend or relative.