Employees and tax?..............

HappyHippyDad · Jun 11, 2023

I have injured my back and I feel it is only going to get worse over the years. My plan is to get a lad to help out 2 days a week.

I'll be putting it through the books, but I was wondering if it is very straight forward when you are filling out your tax return. I have simple accounts as I am a sole trader. Is it as simple as putting the amount you have paid him in the correct box?

Do I have to pay him a pension?

Basically what are the factors i need to think about if I have a chap helping me 2 days a week and I plan do it all legit, i.e through the books?

Dustydazzler · Jun 11, 2023

In all honesty if you would be way better taking a lad on for just 1 - 2 days a week then make it as a sub-contractor.

pirate · Jun 11, 2023

Bring someone in as a freelance. They sort their own tax stuff, you don't have all the paperwork, no pension or holiday pay or sick pay...far too much paperwork! OH, AND YOU CAN SACK HIM AT ANY TIME...

Dustydazzler · Jun 11, 2023

pirate said:
Bring someone in as a freelance. They sort their own tax stuff, you don't have all the paperwork, no pension or holiday pay or sick pay...far too much paperwork! OH, AND YOU CAN SACK HIM AT ANY TIME...

I have a mate who once on a while I use for Labour only and its on a day rate. What he does with the money after I pay him is his business. he gets nothing else from me...

kropaske · Jun 11, 2023

As above Sub contractor way is bit easier then taking them on payroll, however when taking sub contractor on, technically you still have to do it under construction industry scheme and take deduction and pay to hmrc. All it takes is few clicks every months with your chosen software (I use bright pay).

Simon47 · Jun 11, 2023

Subcontractor route will be simplest - as long as he's doing work for others as well. If he only works for you then there's a risk of HMRC coming along with IR35 which will be a whole lot of hurt.
If employing, then you'll need to use an agency to manage not just your tax but all the other stuff. The legalities around employing someone are an ever changing minefield - without a proper map.

suffolkspark · Jun 11, 2023

Just get him to invoice you and you pay it, then log it as a subcontractor expense for your own accounting, just goes off your gross profit if you run basic cash basis books. No need to do CIS deductions for contracts under 1k if it hasnt changed, so just get invoiced weekly.

HappyHippyDad · Jun 12, 2023

Thanks for all the replies. I have a bit to think about.

What sort of price do you offer for a days work? This lad has worked on site with his builder dad for a few years and knows his way around tools, although he knows nothing about electrics. I've offered £120 a day which he snapped up.

Dustydazzler · Jun 12, 2023

HappyHippyDad said:
Thanks for all the replies. I have a bit to think about.

What sort of price do you offer for a days work? This lad has worked on site with his builder dad for a few years and knows his way around tools, although he knows nothing about electrics. I've offered £120 a day which he snapped up.

If he lives at home with little to no overhead than £120 cash in his hand is pretty fair for a 7 hour day if the work is local and he can just turn up with basic tools and you provide the rest of the gear

timhoward · Jun 12, 2023

@HappyHippyDad I'm glad you asked this question as for very similar reasons I'm in exactly the same boat.

suffolkspark said:
Just get him to invoice you and you pay it, then log it as a subcontractor expense for your own accounting, just goes off your gross profit if you run basic cash basis books. No need to do CIS deductions for contracts under 1k if it hasnt changed, so just get invoiced weekly.

I got similar advice and looked into it. I think you are right about the 1k limit, but it looks like you are technically supposed get an exemption approved. What I don't know yet is if this is a one-off phone call or if an exemption is required for each and every contract!

Source: What you must do as a Construction Industry Scheme (CIS) contractor - https://www.gov.uk/what-you-must-do-as-a-cis-contractor/who-is-covered-by-cis

[ElectriciansForums.net] Employees and tax?..............

suffolkspark · Jun 12, 2023

timhoward said:
@HappyHippyDad I'm glad you asked this question as for very similar reasons I'm in exactly the same boat.

I got similar advice and looked into it. I think you are right about the 1k limit, but it looks like you are technically supposed get an exemption approved. What I don't know yet is if this is a one-off phone call or if an exemption is required for each and every contract!

Source: What you must do as a Construction Industry Scheme (CIS) contractor - https://www.gov.uk/what-you-must-do-as-a-cis-contractor/who-is-covered-by-cis
View attachment 108676

Interesting, the line about exemption wasnt there when i last looked into this on the .gov pages less than a year ago, wonder if lots of people are doing it

Gavin John Hyde · Jun 18, 2023

If taking him on via paye then you should explore the employment allowance which even if he does just one weeks work could open up a nice PAYE employers NI saving for the company.
CIS is a pain but tread carefully as a builder I did work for locally refused to deduct CIS and is now being investigated. for years they never deducted a penny from any trades for CIS and its come back to bite in the backside in a big way. so much so they now have set up a new ltd company with very simialr name and worried. At moment as long as they co-operate it stays civil but if they refuse to talk or provide documents on request it can go criminal... I am in the clear as i registered and applied reverse charge vat to all my invoices to the builder.
Pension is a minefield. he has rights if an employee and has to opt out. you as employer must enrol him if over a certain age - think its 21/22?

PeakSteve · Jun 18, 2023

HappyHippyDad said:
I have injured my back and I feel it is only going to get worse over the years. My plan is to get a lad to help out 2 days a week.

I'll be putting it through the books, but I was wondering if it is very straight forward when you are filling out your tax return. I have simple accounts as I am a sole trader. Is it as simple as putting the amount you have paid him in the correct box?

Do I have to pay him a pension?

Basically what are the factors i need to think about if I have a chap helping me 2 days a week and I plan do it all legit, i.e through the books?

Make sure you have him covered on your insurance. Talk to your insurers. Also talk to your accountant.
You have my sympathies, from experience of a bad back. (Also, find a good Chiropractor, or similar - the cost is worth it if it keeps you moving.)

Employees and tax?..............

HappyHippyDad

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Dustydazzler

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pirate

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Dustydazzler

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kropaske

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Simon47

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suffolkspark

HappyHippyDad

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Dustydazzler

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timhoward

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suffolkspark

Gavin John Hyde

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PeakSteve

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