Additional Contractor through limited company

[ContrataxLtd]

I'd echo TCP's comments, especially the part about knowing your responsibilities as an employer and remember the following:

1. Employers NI at 13.8% on payments over £663 per month (assuming you'll pay the salary monthly) as this is quite a big employment cost;
2. Factor in potential sick pay, maternity/paternity pay;
3. Payment in between assignments (fixed term might solve this)
4. Auto Enrollment and pension contributions (probably a few years down the line)
5. Loads of other things that might crop up

And as Jessica mentioned, check out the .GOV website for loads of helpful information.

You should also consider your turnover in terms of the flat rate scheme (if you are on it), whether leaving the scheme would be appropriate (if you used them as a sub-consultant that is), your PI insurance and how this covers their work.

Loads of issues to think of before making the commitment, that said, get it right and you could be on to a winner!

Hope this helps

Martin
Contratax Ltd

[Jessica@WhiteFieldTax]

Endorsing TCPs comments on these aspects.

Check https://www.gov.uk/browse/employing-people for more stuff

[TheCyclingProgrammer]

If you're going to put them on the payroll, they aren't a contractor, they are an employee. I haven't done this before but I imagine you'll need to:

* Get an employment contract drawn up for them - there are probably standard ones but have a think about if there are any particular clauses you want in there as it relates to IP and confidentiality. Also think about whether you want to have a standard or fixed term employment contract and what each involves.

* Payroll should be no different to paying your own salary, using RTI. Your accountants should be able to assist you in how to add a new employee to your payroll (I imagine you'll need a P45 or P60 from them to make sure you put them on the right tax code).

* If you didn't previously have employers liability insurance, as you were a one man company, you're going to need it now. QDOS do it for about £45/year x number of employees. You get it bundled in with public liability which is also probably a good idea, especially if your employee will be working on client sites.

* Most importantly, make sure you are fully aware of your responsibilities as an employer, including how to deal with any disciplinary issues or what the procedure would be if you need to terminate the employment for whatever reason. Employees have significant rights and make sure your company can afford the commitment of employing somebody (unless you're taking them on for a fixed term contract).

Given the potential headaches of employing somebody, is there a reason why you haven't considered simply sub-contracting the work to them? Obviously you can't just say somebody is self-employed if the relationship could genuinely be construed as an employer/employee relationship (if they operate through a Ltd Co then they could be IR35 caught, if they are self-employed then there is potential repercussions for Your Co), but if you feel this could be a normal B2B relationship between you and them, then sub-contracting seems like far less hassle (they invoice, you pay).

[Meerkat]

Situation has occured where I may take on another contractor through my company (just me at the moment). I would invoice the client on a day rate basis and pay the person a salary. They wouldn't be shareholders. My accountant has given me good advice on how this would work financially as far as payroll/tax payments go, but can't comment on any other liabilities or complications this might mean with regards to being an employer. Anyone done this and could give me some pointers.