long term sub-contracting

[davydunt]

could somebody help me out with the legality of long term sub-contracting ? i plan to sub-contract for the foreseeable future from one company, i also plan on doing 2 or 3 private jobs per month for myself.

my accountant is my sister-in-law & i don't think she knows the full info on this subject, but if i went to a different accountant id be shot by my wife.

i don't want to end up with a fine at the end of the year for maybe being deemed as an employee.

i am in the alarm industry so maybe "sax" is the man to help. please.

 

[Thermo]

no an accoutant is the one to help you!

Luckily my wife is and she deals with a lot of small builders etc. Very dependent on the HMRC's viewpoint which varies from situation to situation. Have a look on their website which will give guidance.

It will depend on things such as:-

Do you have the capacity to make a profit from the jobs or are you on an hourly rate with them?

do you do seperate quote an invoice for each job?

do you supply your own tools, transport etc, ie are you self-employed in your own right.

amount of other work and size of jobs.

The main contractor may well want you to be classed as self-employed as they dont have to worry about employers national insurance contributions etc etc, how ever if HMRC deem you to be an employee then he will get whacked for missed contributions etc. They are now a lot hotter on it as its easy for them to cross refernce stuff etc due to all the online filing etc.

hope that helps!

 

[davydunt]

i am using all my own tools, van, phone, fuel, pl insurance etc...

the company arrange between 30-60, preventive & corrective calls (as many as i want), per week Mon-Fri at £x amount per call. then every Friday i invoice them for the mount of completed calls for that week, and they hand me a cheque for the full amount. i cover about 600 miles a week.

then every Saturday i would do 1 full alarm for a private customer.

i am only just self-employed.

Ive only been doing this for 3 weeks now and its working out really well. i plan to do this for as long as they will have me. years ?

 

[heatingman]

There is a flow chart on the HMRC web site which will advise you about status as employed or subbie.
From your comments I'd reckon your a subbie.

 

[r.bartlett]

Go limited...

Cheers

Richard

 

[davydunt]

my accountant says defnetly do not go limited, but I'm having my doubts about her knowledge of accountancy

the alarm industry is in some way exempt from some of the rules ?

saxondale wer are ye ?

 

[Thermo]

why does she say dont go limited?

 

[davydunt]

funny she didn't give me a straight answer... just totally ruled it out from the start. something about being very hard to with draw funds from the business ?

I'm a total know nothing when it comes to tax & stuff

i had a look on the HMRC site and going by it, i should be OK.

 

[angelboy]

If they pay you gross but have you down as a sub-contractor then they are liable to make the correct calls to the tax office to stop your tax.

You have to call the tax office and register get a Unique Tax Code. If you don't then the contractor has to stop you 30%. When you get your UTR then they stop 20% UNLESS the tax office will allow gross payments for you and then your accountant to make the tax returns.

If the contractor has paid you gross and you don't pay your taxes then THEY are fully liable to pay.

Do it this way then sleep at night.

 

[davydunt]

thanks boy ! that makes more sense to me now !

sleep has been a problem for a while