How To Pay Workers Legally?

Discussion in 'Job Talk' started by Anthhh, May 18, 2016.

  1. Anthhh

    Anthhh New Member

    Need abit of help here,

    Ive been a self employed carpenter (CIS Registered) for the last 3 years working for the same company day in day out on a fixed day rate. £80 a day

    I plan on in the near future moving away and finding my own work, basically being the boss so to speak.

    I already know a couple of carpenters / carpenters mates i will soon like to employ but there are still a few things puzzleing me:


    Now I know the going rate is around £120 - £150 a day and i would like to price me and my men at that, but, i would like to pay them lets say £100 so im making £20+ out of them a day like my boss now. (Would be my van, diesel, tools, responsibility etc. So i believe this to be fair.)

    I would like to know what the next step would be to do this as i would like to be in charge of paying my own men rather than the contactor.

    1: Can i do price work for contractors as self employed employing self employed men and pay them through CIS? Or do i have to register as something else?

    2: How would the tax work as when i invoice my tax is automatically deducted? So techinacaly my men would be taxed twice under these circumstances?

    Hopefully all that makes sense and you can see what i'm getting at lol.

    Im sure the answers are probably really simple but as i say i've just invoiced the same thing for 3 years and never had to employ my own men.
     
  2. Phil the Paver

    Phil the Paver Screwfix Select

    If you employ them, you will need to pay them PAYE, and set up a pension scheme for them.

    If they are to be self employed then as long as they have a unique Tax reference number, you just pay them a day rate.

    If you are continually employing the same peeps you shouldn't have them as self employed, unless they work on a price per job bases which involves some risk for them, in terms of money.
     
  3. chippie244

    chippie244 Super Member

    I got picked on this some years ago by HMRC. I was using self employed tradesmen who invoiced me on a day rate basis and I paid them in full.
    HMRC told me this came under CIS and I was to contact them every week and tell them who I was employing and they would tell me how much tax to deduct from them at source which I would then send to HMRC.
    I just jacked in employing anyone.
     
  4. joinerjohn1

    joinerjohn1 Screwfix Select

    It's a minefield these days, employing anyone. I have a kitchen to install for a mate next month,, just wait till I ask him what sort of pension arrangements he's making for me. :D:D:D:D:D
     
  5. gpierce

    gpierce Active Member

    Paying people through PAYE isn't so hard, the HMRC basic PAYE tools make it relatively easy once the scheme is setup, which you might need an accountant to setup, but I wouldn't let that put you off. I do payroll every month for 5 employees and it's pretty easy. Also if you ever get stuck, phone HMRC - their advisors are actually very good, patient and helpful.

    Pension wise, we enrolled all our staff with Nest pensions, they have a ton of guides on their site and again its pretty easy. It takes a bit of time and a lot of filling boxes, but actually everything was pretty straight forward.

    Just an aside on paying people as self employed trades by invoice for a long period of time - I was speaking to my brother (who's a recruitment consultant) a while ago, his company only take on people who have their own limited company setup. Apparently if you pay a sole trader and that person does not sort out doing their tax returns etc HMRC can hold you liable (although I'm not sure what the limitations are, if I hired a plumber to fit a new bathroom this wouldn't be the case, it's longer term work where the self employed are treated as an employee I think), whereas if they have their own one man band limited company then their tax affairs remain their problem, and not yours. But thats a very non-expert understanding of it, it could be total bull excrement :)
     
  6. chippie244

    chippie244 Super Member

    All the paperwork you have to go through though means the time spent doing it comes out of your profits so you have to up your prices.
     

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