Sub-contracting work from ltd.co. to sole-traders

[TestMangler]

Well, in that scenario, the two shops aren't acting as an agency.

Chapter 7, Section 44 of the Income Tax (Earnings and Pensions) Act 2003 states

which pretty much stops an agency dealing with a self-employed person.

Would taking on a number of people to work for a client through your company be enough to make the company owned by the OP appear to be an agency in the eyes of HMRC? Since the same act states that the legislation applies where

then I would suggest that it does.

I would suggest you stop giving advice

JHC on a bike. I COMPLETELY missed the fact that the OP was an agency. Please forgive me

Oh, what ? He's NOT an agency, so that doesn't apply then ? Well, f**k me !!

Or, by your reasoning, any company with a corporate structure who subs work to a non-incorporated worker is an agency ??

Don't think so bud !!

[TheFaQQer]

JHC on a bike. I COMPLETELY missed the fact that the OP was an agency. Please forgive me

Oh, what ? He's NOT an agency, so that doesn't apply then ? Well, f**k me !!

Would the services of the subcontractor be supplied by or through a third person, or not? If they are, then Chapter 7 section 44 applies. If they are not, then it would not apply.

HTH BIDI

[TestMangler]

Would the services of the subcontractor be supplied by or through a third person, or not? If they are, then Chapter 7 section 44 applies. If they are not, then it would not apply.

HTH BIDI

OK, let me run a scenario past you (a real one).

On the mainland, where most of you good folks live, there is a big security company with a name made up of three letters, lets call them TDA for the purposes of this posting. When they get enquiries from certain remote areas, they phone up my 'friend' who has a Ltd that does contracting and also a Ltd that does other stuff, like taking subbed work from TDA. Anyways, my 'friend' gets on to the prospective client and finds out what they want and then buys the equipment from TDA and then gets one of a number of installers (all sole traders) to go and install and commission the equipment. Customer pays my 'friend', friend pays TDA and the installer and keeps a margin.

My question to you would be, who is an agency here ?

Neither the solicitor nor the accountant or insurers that my 'friend' uses have ever suggested that my 'friend' has become an employment agency and he's been running this little business for around 5 years.

Subbing out work does NOT make you an agency.

The OP can sub out the work to sole traders if he likes. There are certain things he will need to ensure and keep an eye on, but being an agency is NOT one of them and niether is being liable for his subby's taxes.

Oh, and please don't say 'HTH BIDI'. Makes you sound like DimPrawn or Sas. You're normally much better than that

[Wanderer]

Rather than take advice from people who clearly have never done what you're trying to do, PM me and I'll fill you in

Ahhh, go on then. Enlighten us with your wisdom, kind sir. How do you propose to do it? Via your umbrella company based in Lagos or something?

[d000hg]

You can certainly hire freelancers as sole traders. But make sure you can not be construed as employing them - IIRC in this case you would be liable for NI, etc, the opposite to them being IR35-caught as Ltds. And you have to make sure they aren't going to screw up and not declare the income, or otherwise embarrass you!

[TestMangler]

Ahhh, go on then. Enlighten us with your wisdom, kind sir. How do you propose to do it? Via your umbrella company based in Lagos or something?

Actually, now you come to mention it..........there's a plan B for someone !!

MF, get a company registered in Nigeria and pay them in sledges !!

[d000hg]

You can do it, but if they are negligent, make sure your liability insurance covers them. Also, if they don't pay the right tax, then your company becomes liable (which is why agents won't deal with a sole trader).

If you explicitly put it in the contract that they are responsible for their tax, and make sure they are not deemed as employed, is this still the case? Does it transcend what a contract says?

[TestMangler]

If you explicitly put it in the contract that they are responsible for their tax, and make sure they are not deemed as employed, is this still the case? Does it transcend what a contract says?

F**k me with a hedgehog on a stick !!

[Wanderer]

If you explicitly put it in the contract that they are responsible for their tax, and make sure they are not deemed as employed, is this still the case? Does it transcend what a contract says?

Probably does, but that's a bit academic if your worker has buggered off back home to (insert foreign country here) without paying a penny of tax in the UK, HMRC can't find them and they are demanding that the company that employed them pays up....

[Wanderer]

hedgehog on a stick !!

A lot of colourful language but still not answer on how you do it I see.