I-LOVE-U asked:
my staff will be paid in cash or by cheque, but do i have to declare anything as its up to them to declare their taxes.
my staff will be paid in cash or by cheque, but do i have to declare anything as its up to them to declare their taxes.
I am in the uk by the way.
also i am starting up, and have a really good pal that will do the first bouncer contract with me to get my business name out there, do i need insurance or anything?
thanks.
Are your staff really going to be self-employed? Will they be free to work for other people while they’re working for you? If the answer is no, then you need to set up an employer’s account with Inland Revenue. They take a dim view of anyone trying to avoid paying employer’s contributions etc by employing self-employed people, who aren’t really self employed.
Yes, you do need insurance. You’ll need public liability and probably professional indemnity. The first protects you if anyone gets hurt by something to do with your business and the second is if anyone brings a claim against you for poor performance of your service. Depending on what type of company you are and on sorting out the status of your employees, you’ll need Employer’s Liability, too.
Speak to your local Business Link for free help and advice on all these questions. Inland Revenue also offer help on the employment side of things.
Good luck with your new business!
As a small business I would never pay anyone in cash – we always pay by cheque or BACS. If you have to pay cash make sure that the person signs for it on a numbered receipt. If you have self employed people working from you and they decide not to advise the Revenue of some or all of their earnings, then it can look like you are assisting in their fraud by paying cash. Anyone who says that thye won’t accept a cheque payment cannot be trusted to have informed the Revenue of their earnings. It is also far easier to keep records of cheque payments for your accounting purposes.
The first answer is correct – people can only be classed as self employed if they are free to work for other people as well.
Public liability insurance isn’t a legal requirement in the UK – but it should be! Make sure that you get liability cover.
If you employ even just one person you will have to have Employers liability insurance – that is a legal requirement.
Neither you nor employees can decide whether or not they will be self-employed or employed. There are set criteria, and HMRC are quite strict about it, clamping down on it quite ruthlessly at the moment. Employers who do not meet their legal obligations can end up paying all tax and NIC due for employees, plus financial penalties. Look at, go into individuals, then other topics, finally into employment status indicator.
Presumably you intend to show labour costs as an expense in your own Tax Return. That’s one way they can pick up on it.