Hiring your first employee- a UK guide
blog.crispyfriedsoftware.com
blog.crispyfriedsoftware.com
For example, my contracting company took out a policy for the Professional Indemnity cover, but it also comes with some Public Liability and sufficient Employer's Liability cover to meet statutory obligations if we take on employees.
I don't know whether this works out cheaper than finding separate policies for exactly what you need, so obviously please do your homework if you're in a position of needing this type of cover.
EL is the only compulsory insurance which applies to all private sector employers, although in certain industries you will have additional requirements (e.g. conveyancers have to purchase professional indemnity insurance).
What happens if you are employing someone at the limits and then they go out and get a bar job too? Would I then be liable for the relevant amount of contributions? Am i responsible for knowing that my employee hasn't gone and got another job without telling me??
Assuming i would be responsible for PAYE if they got more work, then am I allowed to make not having other employment part of their contract? If i am not making PAYE contributions, does the employee have any NI contributions? (eg. paid by the state?), or are they elligable for any tax credits/benefits? (IIRC JSA could be claimed if working < 16h /wk -- although IIRC earnings would count against JSA money, NI would at least be paid, right?)
Finally, How do all these things change if you are employing someone from the EU, or outside??
second, some friendly advice: my approach would be to register them for PAYE even if they're only close to the threshold; this means they are future proofed if they step up hours / get a bar job. I know economists will tell you effort up front is worth more than cheaper effort in the future, but that's only one opinion!
finally, I believe that EU citizens are treated exactly the same once issued an NI number - but see my first comment about all matters of tax law!
The employer is still responsible in providing suitable office equipments for the home-worker, i.e. office chairs, desks, lighting and computers. If the home-worker is using their personally-owned equipment for work, the employer is still liable in ensuring the equipment is fit for purpose and get it test/certified for electrical items.
It is up to the employer to ensure the home office is at the same health and safety and data protection standards as they would in the office and yes a H&S risk assessment will have to be carried out.
You may also have to purchase public liability insurance if they receive business visitors into their homes as well.
I'm not trying to put a downer to home-working (I do some myself) but few SMEs realise the true implications of offering home-working until they get a letter from the lawyers demanding compensation for their employees' injury from tripping on some cable they placed themselves in their home office whilst working.
What this basically says, is if someone looks like an employee, they're doing the job of an employee, then they are an employee, whether you like it or not.
Most UK IT contractors will be pretty familiar with this situation, and the ways to avoid being caught out by it.
However, as my employee is mostly customer service, admin etc, and doesn't work for anyone else, I don't think there's a way round it for me!
It might be possible to hire remote freelancers based on other european startup hubs without being affected by IR35.
IR35 was introduced to stop contractors from setting up a limited company and then having the company contracted instead of the individual. The individual would then take dividends out from the company, which are taxed at a lower rate and not subject to national insurance.