Self-employed staff versus full-time PAYE staff

Speaking to the landscape contractors among you who engage in the design and construction side.

I am looking at ways to make the business run more efficiently financially as well as having less pressure of supporting so many staff. Wondering about making more of the guys self-employed, which would reduce my administrative burden, employers NI, and give greater flexibility. This NI bill each month is such a lot of money.

last month it was £1000!!

I have heard that quite a few companies down south operate like this and some don't directly employ anyone. Would anyone like to share their experience of this issue?

I know HMRC are quite strict about the whole employed/self employed distinction, and so I would have to abide by their rules on this.

Hi Susan,
I think there a lot of us in that position and being more competitve and efficient is never far my mind. Our issue is that we have qualified staff who have been with us for in excess of 12 years and as you say the NI bill is horrendous each month. We are at the moment working with two p/t staff but end up bringing them in for extra hours when work demands so kind of defeats the purpose.
The HMRC website is quite explicit when it comes to who provides the tools and materials determining self employment status - Don't know what the reaction to that would be from employees. "still want to employ you but must have own mini excavator and 1 ton dumper to make you self employed" think that might be a " no thanks" with a few expletives. I don't know about you but we have not had much luck with getting the right staff over the past few years. Lots of time wasted on 'on job' training just for them to find its not quite what they were looking for or they are not as experienced as they told you they were.
If I come up with any bright ideas I'll share them with you.

Cheers :)

Replies

Susan June 27, 2010 at 1:08pm

Just searched this site and see that there's already a lot of valuable info here....gosh, what a wondeful place this is.
vhowe June 27, 2010 at 1:50pm

Hi Susan,
I think there a lot of us in that position and being more competitve and efficient is never far my mind. Our issue is that we have qualified staff who have been with us for in excess of 12 years and as you say the NI bill is horrendous each month. We are at the moment working with two p/t staff but end up bringing them in for extra hours when work demands so kind of defeats the purpose.
The HMRC website is quite explicit when it comes to who provides the tools and materials determining self employment status - Don't know what the reaction to that would be from employees. "still want to employ you but must have own mini excavator and 1 ton dumper to make you self employed" think that might be a " no thanks" with a few expletives. I don't know about you but we have not had much luck with getting the right staff over the past few years. Lots of time wasted on 'on job' training just for them to find its not quite what they were looking for or they are not as experienced as they told you they were.
If I come up with any bright ideas I'll share them with you.

Cheers :)
Gary Hedges June 27, 2010 at 2:13pm

Have a look at this site.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPay...
the chances are if your guys/girls are still doing the same job they can't be called self employed.
PRO

Gary RK June 27, 2010 at 5:39pm

Hi, just a thought but what about the news in the budget that Firms in weaker regions to be exemt from NI on first 10 jobs ??

I believe it's for startup's, but not sure how they would define 'new company', perhaps create a new ltd company and 're-employ' the staff ? Perhaps worth checking with your accountant ?

Personally, I don't think you can do what you have in mind, as HMRC will still count them as employees (even though self employed) if the work for you the majority of time and you decide their 'work.
Susan June 27, 2010 at 7:38pm

hilarious!!! thanks for cheering me up :) I want to keep my very good core team, and expand and contract the size as necessary.

Gary Cobb said:
Coat hangers, that's the answer.

Just take a few guys off the hangers in the spring and put them back again in the winter.

Thinking of setting up a website providing this service ... coathangers.com.

This time next year I'll be a millionaire.
Susan June 27, 2010 at 7:40pm

I think you are absolutely right. But it costs so much to employ people!! I may keep the very best all rounders as my core team and bring others in when I need their specialist skills....and pay them more for doing parts of jobs so its worth their while, and since they are doing fewer hours.