Hiring someone

I am a sole trader and considering to hire someone for occasional call outs to support me in additional services which are currently not supported by myself.

The idea is that the person will be working under my brand (Style by Lina) when visiting customers.
The service is going to be mobile, outside of my premises.

I will be defining the prices for all the new services which are obviously going to be higher than what the new person will be earning.

The new person is not registered as a self-employed.

The question is what would be the best employment structure for me in this situation?
The new person would have to provide receipts to customers on behalf on my brand since the advertising of the new services is going to focus on my existing brand.

Although the new income is going to be considered in full from the Tax point of view, I will obviously be getting only part of it.

It does not make sense to hire the new person as an employee as the job is occasional by a customer request only.

If the person registers for self-employment, I could get a receipt from her on the amount she earned I guess. But she can also provide receipts from her name to customers as far as I understand.

What are the options for the most efficient operations?

Thanks

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Hairdressers Milton Keynes

Can't offer much in the way of advice but best to get it set in stone before you start, have you got an accountant?

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No accountant

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Hairdressers Milton Keynes

I've operated sometimes under a "contract for services" where I provided outplacement support to the client of my client. The contract governed every significant aspect of the services I provided to the client's client - how I described myself to the client in person and on the 'phone, their entitlement to use my material for free for this one contract, etc. My client dealt with all the financial and contractual admin and set up a new temporary email address for me to use. Would be happy to send you an anonymous version of this contract if it would help.

Clearly a relationship like this has to work on trust and both parties have to be able to determine in advance which prospective customers are "Lina's" and which can be legitimately targeted by whoever gets to them first.

Most hairdressers seem to me to be used to working simulaneously as employees and on a self-employed basis. Personally, I think it might pay you to start working with this person on the basis he / she is self-employed.

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Outplacement Support

We used to have commission only sales people, which worked out ok'ish, and more recently have had an office temp who was taken on as a short term contract, so self employed.

As CareersPartnership says, it has to be built on trust.

In all cases we had a contract drawn up and signed, which confirmed they understood they were self employed and responsible to declare their own tax, and a breakdown of our agreed product prices, commission/wage, R&R's etc.

One thing to think about, you are saying the role isn't viable to employ someone full time, as there isn't enough constant work, so how will a self employed person cope?

Will they do this part time and split their time with other hair dressers or other work? In which case what happens if their other job scales up, or could their be the possibility of loyalty issues?

Always a risk when you ask someone else to work in your name, as you are then dependant on someone else matching your standards.

Just food for thought.

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cheers Steve
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You cannot decide whetherthe other person is self employed or employed.it is decided onthe facts ofthe particular case.

The Inland Revenue have produced a 'status questionnaire' butit is heavily biased in favour of employment.

In particular,there questionnaire looks atthe following matters:-


Ultimate control ofthe work
Profit element, and risk of loss
Provision of materials and equipment
Integration withthe employer's business
The intention betweenthe parties
Usual conditions inthe industry

Note, however,these are matters of general employment law, and not specific tax legislation.

For HMRC to accept the self-employed statusit shouldbe evidenced that:
The worker operates a business assuming risks such as rectifying work, invoicing and waiting for payment;
The worker is not required to work for a particular engager,
The engager is not obliged to use that worker's services; and
The engager does not havethe right to control whatthe worker does.

One thing HMRC seem to get wrong in their status checks is the 'substitution clause'. That is, does the worker have the right to send a substitute, at his own cost, to perform the duties.

I'm still surprised in this day and age that this kind of information is so hard to come by.

Good luck with your research

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As long as this person offers services to others as well as you and you have in place a contract for services in place (to control what they do and to define & limit their actvities, conduct, fees etc) I would think you would be OK from the taxmen here. They arent always trying to stifle small businesses you know!

Wrong phrase. The self employed person has to have control over what is being performed and how.

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Picture Framers In Essex

Good point I didnt make that particularly clear. It should have said to define the terms of business.