employee vs contractor

homeOwner

A work mate of mine is employed fulltime but has come across a bit of work he wants to do on the side for another company, basically maintaining their website. Its only a few hours a week in the evenings indefinitely. For some reason the company wants to hire a contractor through a LTD company.. but my work mate doesnt want to go to the expense of setting a company up. He asked if he can bill through my company which I am happy for him to do.

My question is, can i bill the company for his services and then have him bill me for the same amount and pass the money straight on to him over a long period of time without there being any problems with him being seen as an employee?

TheWaterboy

I dont see any reason why you cant do that - however your mate still needs to be set up as a Sole Trader. He can register a business name and set himself up as a Sole Trader. To keep his tax right then he will decalre this income with his PAYE inccome

homeOwner

Supposing he doesnt register as a sole trader, is there any responsibility on me, or is it completely a matter for him?

All i will be doing is paying him for an invoice he submits to me. I only know this guy through work so its not like we know each other very well. I am happy to help him out as long as there are no repercussions for me if he decides to not declare his tax.

r3nu4l

So far as I am aware, as he is a contractor, then he is solely responsible for declaring his income, and any penalties exercised if he does not.

r3nu4l

So far as I am aware, as he is a contractor, then he is solely responsible for declaring his income, and any penalties exercised if he does not.

By the way, what is your friends name, address and will he be available for a visit from revenue at 4 pm next Tuesday?;)

Be careful, a mate of mine got caught out when he did the dirt on his girlfriend with her friend. She shopped him straight away, he's still paying the fines lol:D

He deserves it for cheating on her and cheating other taxpayers:mad:

homeOwner

I dont think he will be up to any tax dodging but you just never know.

It would sure be tempting though to put the cheque into your account every week and say nothing.:D

r3nu4l

Absolutely, I shared a house with a teacher who earned just over €400 a week (!!!!) from extra grinds! He spent one hour four nights a week with one child and then a further six grinds.

So my mate was earning €1600/month for about six months of the year (i.e. €800 per month for each month in the year, on top of his wages!).

All of this went into his pocket Hasn't been caught yet but even if he is, there is no paper trail so he can claim that he only just started giving grinds and pay a paltry penalty. That's why revenue don't investigate teachers giving grinds too often. It would cost more to prepare the fines and penalties than it would be worth.

Unfortunately for your friend there will be a paper trail for his payments so he should definitely be careful.

deebm

You should be careful too, what about VAT in your own company, will the work to his customers be invoiced on your company invoices, will you be liable for work he does

If it were me I'd avoid like a plague. could cause problems for your own company, just so he doesnt have the hassle of setting up on his own.