Taking on New Employees

[C.A.B.s]

This subject was brought up on another forum i use, and i thought i could put a new thread about it here

Who to treat as an employee
HM Revenue & Customs (HMRC) specify that you should treat as an employee anyone you employ under a contract of service, including -
Casual and part time workers and anyone who is an office holder , including directors

If the employee does not give you a form P45 because they claim to be self-employed, Look at the terms on which you took them on. The HMRC (http://www.hmrc.gov.uk/)publication employed or self employed - A guide for tax and national insurance IR56 (http://www.hmrc.gov.uk/pdfs/ir56.htm), will help you with this issue.

Caroline

[PaulSimister]

In the UK there is a subtle difference between contracts of service (employees) and contracts for services (self employed).

Treating as an employee through PAYE in the UK is the safest option for the "employing" business but it is a problem for the self employed since the tax rules are more onerous.

Back in 2000 I incorporated my business because the HMR&C were clamping down but that then brought in a host of new rules for something called IR35 which takes away the tax savings from artificial arrangements.

All terribly confusing and if in doubt take professional advice. But get it wrong and pay someone who the HMR&C thinks should be an employee then you risk the payment being treated as net and being asked for the tax and national insurance.

[C.A.B.s]

Paul

Thanks for your input on this

Caroline

[elows]

Develop a “try it out” atmosphere where employees are constantly exploring and in the habit of taking on new endeavors regularly.

[anokhi]

Back in 2000 I incorporated my business because the HMR&C were clamping down but that then brought in a host of new rules for something called IR35 which takes away the tax savings from artificial arrangements.

[pakiboyg]

I develop the new business and the lot of tips I gain from the forum which helps me during my business .