"employing" a sub contractor

[Masood]

Usually the definition of subcontracting involves the principle of substitution. IE, instead of turning up for work himself, he should be able to send a suitably qualified engineer in his place.

If that is not acceptable, and you require him PERSONALLY to turn up, then you have a "contract of personal service", or in every-day speak, "an employee". You will have the obligations to pay employers NI to HMRC and will be treated by other regulatory bodies as employer/employee, regardless of what you and he agree between you.

Whilst that is true of most contractor/consultant type roles after IR35, CIS rules define contracting within the construction industry differently. As has been correctly pointed out already, the defining criterion is mainly one of exclusivity and autonomy:

Does he work only for you, or to such a large percentage of his time that it could be considered exclusive?
Do you explicitly instruct him, or dies he have autonomy in deciding how to structure the work and his time spent doing it?
Do you provide all materials or does he provide some and bill you for them?

There are other rules but these are the main ones. I'm happy to be corrected if I'm wrong but I've done a lot of reading of the CIS website, spoken with my accountant and with HMRC about CIS contractors as I did not want to fall foul of the rules...

 

[Ray Stafford]

Whilst that is true of most contractor/consultant type roles after IR35, CIS rules define contracting within the construction industry differently. As has been correctly pointed out already, the defining criterion is mainly one of exclusivity and autonomy:

Does he work only for you, or to such a large percentage of his time that it could be considered exclusive?
Do you explicitly instruct him, or dies he have autonomy in deciding how to structure the work and his time spent doing it?
Do you provide all materials or does he provide some and bill you for them?

There are other rules but these are the main ones. I'm happy to be corrected if I'm wrong but I've done a lot of reading of the CIS website, spoken with my accountant and with HMRC about CIS contractors as I did not want to fall foul of the rules...

I would bow to those with greater industry specific knowledge. My experience is more generic.

 

[GasmanxxxR1]

Whilst that is true of most contractor/consultant type roles after IR35, CIS rules define contracting within the construction industry differently. As has been correctly pointed out already, the defining criterion is mainly one of exclusivity and autonomy:

Does he work only for you, or to such a large percentage of his time that it could be considered exclusive?
Do you explicitly instruct him, or dies he have autonomy in deciding how to structure the work and his time spent doing it?
Do you provide all materials or does he provide some and bill you for them?

There are other rules but these are the main ones. I'm happy to be corrected if I'm wrong but I've done a lot of reading of the CIS website, spoken with my accountant and with HMRC about CIS contractors as I did not want to fall foul of the rules...

Thanks Masood

What is your experience? Do you employ people or have them sub contract? If its just me and one other guy is there a massive cost to me employing him?

 

[mfgs]

I would be wary of going into business with a friend. I have had friends work for me in the past as subbies and they do generally take this **** by going home early etc thinking that because I am a mate it wont bother me. When I am paying someone for a set amount of time, I expect that time and nothing less, and for them also to be fully committed to work during those hours.

I would also not offer a split of profit on the jobs. You are getting all the work from advertising, your contacts etc. You are doing the quotes, spending 20 minutes on the phone to them answering silly questions or dealing with emails about how the new programmable stat works. If you want to go ahead with it as you need more labour, I would put him on a good day rate and not offer a split of profit.

 

[GasmanxxxR1]

I would be wary of going into business with a friend. I have had friends work for me in the past as subbies and they do generally take this **** by going home early etc thinking that because I am a mate it wont bother me. When I am paying someone for a set amount of time, I expect that time and nothing less, and for them also to be fully committed to work during those hours.

I would also not offer a split of profit on the jobs. You are getting all the work from advertising, your contacts etc. You are doing the quotes, spending 20 minutes on the phone to them answering silly questions or dealing with emails about how the new programmable stat works. If you want to go ahead with it as you need more labour, I would put him on a good day rate and not offer a split of profit.

That's really great advice, thank you.

Nothing is set in stone, i guess i need to mull it over.

Most of the time we would be working at the same address so if theres any slinking off early, we'll both be at it

 

[smtplumbing]

i would put on day rate, sort mean extra for you tho remember tho he is no gs so plumbing rate he gets,

if your feeling nice give him some scrap haha or halfs or thirds

 

[GasmanxxxR1]

I have answered the questions on the CIS website and he would be deemed a sub contractor

 

[Nostrum]

I employ through CIS as a temporary measure, temporary to permanent hopefully. It can be a pain using HMRC's awful website, processing invoices and issuing CIS statements and then logging it with HMRC and paying tax.

That said, there is no employees NI to pay and the contractor pays their on NI.

I employ a mate and it's difficult sometimes to be fair. There are times when had he not have been a mate, he'd have probably been sacked. I've worked with a lot of mates in the past and it is definitely challenging at times.

I would agree with the others, don't do a split do an hourly or day rate. Make it known that it's your business and you are the boss, otherwise you'll find yourself feeling unable to make some of the judgement calls and decisions.

 

[stevetheplumber]

when i was working with another guy all the time we were both self employed seperately and we alternated who got the cheque and balanced it out as we went along

 

[GasmanxxxR1]

I employ through CIS as a temporary measure, temporary to permanent hopefully. It can be a pain using HMRC's awful website, processing invoices and issuing CIS statements and then logging it with HMRC and paying tax.

That said, there is no employees NI to pay and the contractor pays their on NI.

I employ a mate and it's difficult sometimes to be fair. There are times when had he not have been a mate, he'd have probably been sacked. I've worked with a lot of mates in the past and it is definitely challenging at times.

I would agree with the others, don't do a split do an hourly or day rate. Make it known that it's your business and you are the boss, otherwise you'll find yourself feeling unable to make some of the judgement calls and decisions.

Exact situation Im in, keep getting more and more work and need to share the load. My mate is a good plumber and ive known him 20 years. We BOTH acknowledge that im the level headed one and ive got the quals, im more thoughtful, patient and studious.

My mate is more out going, networking, social media savy ect and a more varied plumbing back ground, he knows the local builders and so on.

Im hoping we compliment each other well and we make a success of this. Maybe in future he will be my employee or even business partner