Can I use my limited company to process other contractors who are not shareholders

[sreenivunnam]

one of my friend requested to process his temporary contracts of 6 weeks through my company and take 5% cut and pay the remaining to him directly. is this legal ?

[stek]

one of my friend requested to process his temporary contracts of 6 weeks through my company and take 5% cut and pay the remaining to him directly. is this legal ?

Yes, but consider insurances, accounting, whether he will be an employee and/or director, in other words, a world of pain.

[northernladuk]

Yes, but consider insurances, accounting, whether he will be an employee and/or director, in other words, a world of pain.

This and another couple of lines of items you have to consider. Avoid it like the plague.

[Ticktock]

Shirley you'd have to sign the contract, as director of your company, and then either put him as a temporary employee (with the attached complications), or set up a separate contract with him as self-employed?

I'm thinking of it more along the lines of how you would deal with a substitution (if anyone on here has managed one), as potentially you could deal with this through the same setup, or am I wrong?

[mudskipper]

Yes, but consider insurances, accounting, whether he will be an employee and/or director, in other words, a world of pain.

If he invoices as an individual, and declares it on his tax return, then he's just an expense, isn't he?

[kingcook]

Yes, but consider insurances, accounting, whether he will be an employee and/or director, in other words, a world of pain.

Definately ^this^.

Do you have employer liability insurance? Public liability?

What you going to do if he makes a big **** up while working? Your limited company could be liable.

Avoid.

[SueEllen]

Do you have employer liability insurance? Public liability?

Those insurances don't actually cost very much. Employers liability is often bundled in with other insurance products and you may have public liability due to your clients.

What you going to do if he makes a big **** up while working? Your limited company could be liable.

Avoid.

This is the bigger problem.

If the guy touches live systems or works in certain industries then you don't want to go near him.

If he doesn't then you need to take a bigger cut to cover the potential risks.

[BigRed]

^ so agencies should be on at least 5% then ?

[kingcook]

^ so agencies should be on at least 5% then ?

You won't be an agent for your friend - you'll be his employer. Unless you were thinking about setting yourself up as a recruitment business and having agent style contracts?

[VectraMan]

If he invoices as an individual, and declares it on his tax return, then he's just an expense, isn't he?

Though if he doesn't yourco could end up liable for his taxes.

Point him at an umbrella company. This is what they do, and generally for less than 5%.