Employing someone on Self Employed Contract

sdps

Hi Im looking for some advice please. I run my own small childcare business. I need to employ someone in the coming months for 7 hours a week. Previously I employed people as am employee and paid Employers PRSI, TAX and holiday pay. It was extremely time consuming and this time around Im wondering can I hire someone in as self employed, have them invoice me for the hours they work and then they are in charge of their own tax responsibilities.....anyone know if this is possible?and can I use the paid invoices for my tax return at the end of the year?
Thanks in advance

Alan Shore

You can do it but if you engage someone who is an "employee" as self employed then you take a substantial risk of it going wrong for you.

7 hours per week should not be too much hassle to run through payroll.

antoinolachtnai

The short answer to this is that no, it is not possible. You will potentially leave yourself liable for a large tax bill. But you really need to consult with an accountant to discuss the best way to move forward.

Axwell

antoinolachtnai wrote: »

The short answer to this is that no, it is not possible. You will potentially leave yourself liable for a large tax bill.

Accountancy isnt my area, could you explain why this is the case? Surely its the same as hiring a contractor in to do the job and you pay them. They file their own tax return. Why would hiring them affect the employers tax bill as you indicated?

Atomico

antoinolachtnai wrote: »

The short answer to this is that no, it is not possible. You will potentially leave yourself liable for a large tax bill. But you really need to consult with an accountant to discuss the best way to move forward.

Em, not sure why you think that?

You can of course have someone work for you as a contractor, that is happening all over the country / world. Have the contractor bill you for services rendered and they take care of their own tax affairs as a self-employed person.

It gets into more of a grey area if the person is effectively an employee - perhaps working on the premises / for the client almost as much time as if they were employed by the client. However in this case the OP is just looking for someone to do a small number of hours each week.

endacl

Not sure you can in childcare. They will need to be Garda vetted. This form has to be submitted on their behalf by their employer. They can't apply as an individual, and a vetting clearance for another organisation won't apply to yours.

pedronomix

endacl wrote: »

Not sure you can in childcare. They will need to be Garda vetted. This form has to be submitted on their behalf by their employer. They can't apply as an individual, and a vetting clearance for another organisation won't apply to yours.

and the "non employee" employee has to register with revenue as a sole trader.....for 7 hours a week? Liability insurance cover etc etc Yeah right!!

antoinolachtnai

Atomico wrote: »

Em, not sure why you think that?

You can of course have someone work for you as a contractor, that is happening all over the country / world. Have the contractor bill you for services rendered and they take care of their own tax affairs as a self-employed person.

You can do that and many do, but there is often wishful thinking involved. It is a matter for the Revenue and DSP, not the parties, to decide whether the contract is of an employment nature. The number of hours worked don't come into it at all.

The problem for the OP is that if the Revenue subsequently decide that the contract is an employment contract, they are entitled to recover tax and PRSI from the employer.

The criteria the Revenue use are at

http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

srsly78

If someone is SELF-EMPLOYED then you can not employ them in that capacity, surely this is obvious. Rather you can contract with them for services, there is no middle-ground. You are either their employer or you are not.

OP you really need to discuss this an accountant. If you choose not to (and instead indulge in tax fraud) then you might find yourself with a large tax liability.

And yes, when you get the local kid to cut your grass for cash this is also tax fraud. Sure there might be no tax liable because little is earnt but you do not know someone else's total earnings.

capefear

That loophole of companies hiring contractors who only work for one company 35 hours aweek will surely be closed in the next couple of years. They are employees.

Op pay the person 7 hours a week and out source the payroll or get your accountant do the payslip it will cost you an extra €5 euro a payslip and then you have nothing to worry about.

DubTony

capefear wrote: »

Op pay the person 7 hours a week and out source the payroll or get your accountant do the payslip it will cost you an extra €5 euro a payslip and then you have nothing to worry about.

That's a cheap accountant. My brother used to pay his accountant €300 a month for four salaried employees. (Yeah, I know. There's one born every minute.)

capefear

DubTony wrote: »

That's a cheap accountant. My brother used to pay his accountant €300 a month for four salaried employees. (Yeah, I know. There's one born every minute.)

Hi Dubtony


You would be surprised the type of prices for payroll. I know one guy who is getting it done for €1.80 a payslip, some are €3.00 and some €5.00. Most seem to have a minimum fee of €15.00 for the first payslip and then €3.00 for each after.


Tell your brother you can get it done for €250.00 a month, we will get a guy to do it for €50.00 and we will split the difference :-)


CF