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Employing part-time staff

Posted by ISM_CLEANING (ISM_CLEANING), 8 January 2004
Could anyone offer any advice on taking on part time staff, I started my business 6 years ago and up until now have managed to cope on my own, giving up any social life along the way! I now need to employ staff and would be grateful if anybody out there could help me on the following points.
Is it possible to employ staff without the need to get involved in tax & nics e.g if they are only earning a certain amount,or if they are able retired people.

Ian mckenzie
Posted by martin_606 (martin_606), 8 January 2004
Hi

Such a minefield this one.

If you employ staff then you are liable to pay the tax and N.I. There is a ting called LEL (lower earning limit) if they go above this you have to pay N.I.

then there is pay to date, free pay, tax credits, maternity leave, holidays....zzzzzz

I am wondering about if you take someone on and they go self employed and are responsible for themselves, best to ask an accountant for pro advise.

Best of luck!

Regards

Martin Cool
Posted by ISM_CLEANING (ISM_CLEANING), 8 January 2004
Hi Martin
Thanks for the advice, this is my first post on the site and was not sure what the response would be like.

With regards to the lower earnings limit, if the pay is lower than the limit, I take it you dont worry about tax & nics then, and I suppose if they are not only working for you then this is included in the limit.

Thanks Again
Posted by Fox (Fox), 9 January 2004
Hi

If you have employees that are retired or on a second job they will be on a basic rate code until you get notified otherwise by tax office (by submitting P46)

You do not personally pay their tax - they do - you deduct it from wages and forward it to tax office monthly (PAYE).

If they are part time it is unlikely you will be liable for employers NIC. Retired people are usually exempt from NIC's but will need to produce a cert to this effect.

Basically if you are employing staff for say 10 - 15 hrs per week you shouldn't have to worry to much.  You will have to pay holiday pay (min 4 weeks per year) and keep records.  You will still need to inform the tax office of any staff you are employing though whether they pay tax or not.

There is so much info that you should know, but it's not as difficult as you may think.

Hope this helps somewhat
Fox
Posted by Derek (Derek Bolton), 9 January 2004
Hi Fox

It's a few years since I employed part time staff including some retired people (I always found the older employees the most reliable)

Being a Limited Company for many years I believe the employer has to still pay NIC although the retired employee is exempt as you stated (I stand to be corrected)

Ian

Make sure you check 'ALL' the facts that a prospective part time employee gives you and as Fox says get a P46 completed. Part time staff can, and do, sometimes give false details to avoid tax liabilities. (It may be just the area that I live in)

I also believe that as an emplyer you have a resonsibility for the tax/NIC for 'allegedly' self employed people... again I stand to be corrected. The Revenue and the Government are fully aware of this method of avoidance and closed the loophole a year or so ago.

Hope this helps

Derekl
Posted by Mike_Boxall (Mike_Boxall), 9 January 2004
on 01/08/04 at 13:16:09, ISM_CLEANING wrote:
Is it possible to employ staff without the need to get involved in tax & nics e.g if they are only earning a certain amount,or if they are able retired people.


Ian, the answer is no you can't employ people without getting involved in tax and NI although it may not actually cost you any more money that their standard hourly rate. Derek is correct that you are responsible for them paying whats due to the Inland Revenue on the money you pay them.

It is tempting to just hand over the cash assuming that they will sort it all out because they 'claim' to be self-employed but it can cause you all sorts of problems down the line.

Regards

Mike

Posted by ISM_CLEANING (ISM_CLEANING), 9 January 2004
Hi All,

Many thanks for the advice given.

Now to try and find some honest, reliable, and hardworking staff, they must be out there somewhere.

Thanks again

Ian
Posted by petra (petra), 9 January 2004
just a few mate.

Posted by Fox (Fox), 9 January 2004
Hi again

Many valid points have been made - to clarify - if an employee has to pay tax - you take it out of their wages and pay it to the inland revenue.  

They may sign P46 as 'only or main job' as suggested (when having pension or second job) but you are then not responsible - as long as you have submitted the paperwork, as the employee will be put on a higher tax code for the length of time it may take to pay this off when proccessed.  If they swap jobs in the mean time it is not your problem, you have paid the PAYE that you believed to be due.  
Posted by petra (petra), 9 January 2004
this is a mine field, but if the employee is liable for nat ins, you as the employer as also liable for emplyers nat contrib. am i right?
Petra
Ps all mine are part time and below LEL
Posted by Derek (Derek Bolton), 10 January 2004
Hi Petra

This is going to sound awful....but  my advice is don't always believe what you are told by staff!

Always get a P46 signed and keep your paperwork up to date as far as the Revenue and DSS are concerned.

I had a call from both the Revenue and DSS a few years ago when I employed part time staff and it transpired that they were looking for 'ghost employees'
i.e. people allegedly on the payroll who didn't exist  the money  going into someone elses pocket.
The Revenue angle was that if you couldn't 'prove' that they existed the money would be allocated to the owner/Director as part of their salary.

The grilling was intense... thank goodness I played by the rules.

Derek
Posted by Fox (Fox), 11 January 2004
Petra

You are right that the employer is liable to pay employers NIC if the employee is at that level.

Derek

I agree that employees don't always tell the truth.  However it does catch up on them and monies due have to be paid eventually.  Again I strongly agree that all records and paperwork should be filled in and dealt with properly.
Inspections can sometimes happen if you have alot of employees on temp NI numbers as the inland revenues system automatically put them to one side for a trace at the end of the year. Well done Derek for getting through yours.

Regards
Fox

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