hi, now this may sound like im stupid but just looking for some advice..... im looking to take on my mate who went to my college and is a qualified floorlayer, but the dilemma we both have is how to pay him. he was on workseekers allowance until he told them he was going to work for me. so they told him to give me his p45 to fill out but the problem is we both ( my mate and i ) dont want him being paid by the hour. we want him to be paid either.... by the day... by week.. or metres laid, also cash is better for both of us, so just wondering what you lads do for employing fellow fitters, would it just be better for him to go self employed as a subbie or something like that or is that a no no?, ohh an btw im self employed not LTD, thanks in advance Owen
My apprentice who is also my step son is a partner registered under the same utr number as me so we invoice for work done then our tax is paid from that invoiced ammount and our wages are classed as private drawing so we don't pay tax again. Summit like that I leave it upto the accountant talk to yours if you have one.
You are in fact employing him, so therefore he needs a employment agreement. In this you can state what his wages will be and how it will be calculated. You don't need to have wages per hour, you can state for instance: 1/3 of the sales of labour of any job he works on; £ 15.00 per sq m; or anything else you want it to be. Using him as Subbie and not employed might get you into trouble with the HMRC later on in regards of National Insurance etc if most of the time he works for you. Ask your accountant for more info on this (we're a Ltd, so in a different situation)
Good point Woody. Years ago my brother subbed to one company for about 90% of his income over a couple of years. HMRC wanted to tax him as an employee and it cost him quite a bit to sort it out.
