Becoming a Sub Contractor

[nickjames]

Hi Gents,

Ive been offered some work by a company, however they don't want to take me on the books as an employee because they haven't got secured long term work currently.

I was wondering if there was any advise out there on what the process is to becoming a sub contractor?? Ive always been employed, and haven't got a clue what i need to sub contract myself out!! What are the pro's and con's?

The company offering me work is registered with the nic.....but do i need to register myself too, do i need public liability, do i need to register myself as a subby to the tax man, am i limited to the amount of work i do for one company etc. Any tips would be much appreciated.

Im fully qualified and have my 2391, if that is relevant.

Thanks in advance.

 

[biggsy]

Hmrc web site to register self employed sole trader is easiest option tax wise check firm will pay you as sole trader may req ltd co
Public liability / pro indemnity insurance check min cover req

 

[rmc86uk]

If your planning on becoming a long term sub contractor then most firms will be using CIS to pay your taxes. You would need to register self employed through CIS (Construction Industry Scheme). With this the firms your sub contracting to will deduct the 20% tax off of you. Or if your planning on going as a sole trader then you need to ask someone for advice as I'm not up with all these scheme things.

 

[Hayeso32]

Get yourself down to your local tax office to get registered in the CIS scheme.They will give you a UTR(unique tax reference number)- all you do is give this to whoever your subbing to and they will deduct 20% at source. My advice to you in this current climate is don't work anymore than a week without getting paid-that way if the firm goes under you are only at risk of losing a weeks wage. I subbed for 10 years and for 9 of them it was great, this last year though 3 firms that I worked for all went under owing me money every time.These were well established firms aswell but if the big one above goes then its like a house of cards. Good luck though, I hope this helps!!

 

[Sharpend]

Register at tax office as a self employed person, tell then you need to register for CIS tax, these two usually done at same time. You will be issued with a Unique Tax Reference number (UTR). Get yourself at least £2m public liability insurance and min£500k of professional indemnity insurance (covers you for any advice you give). In many subby roles you will not need to be scheme registered as you will come under the umbrella of those you sub to, however there are some that require you to have your own membership. You decide whether its important to you remember you may have to take on your own private works if the subby bit goes quiet.
Either get an accountant or learn how to do self assessment yourself (tax office run a free course for this) and away you go.
In terms of the myth of working for same outfit for too long, just sub to more than one outfit throughout the year, which in real terms is not difficult as it is unlikely that one outfit would have continuous work for you all year round, otherwise they'd employ you. All the best.

 

[rmc86uk]

I've subbed to the same firm for two year now, never had a problem.

 

[nickjames]

Thanks alot guys!! Massive help!! Any idea the cost of insurance (public indemnity and public liability), a ball park figure would be great. Hayso, great advice thanks a heap. Theres no fee for your personal tax code im guessing??