united-kingdom, tax, payI am putting together a business plan for a Paintball site in the UK. I will need to pay several marshals to be on duty whilst the site is live.
So these workers will be “Casual” or “Part Time” I cannot guaranteed certain hours or days due to the nature of the business. One day may be rained off, then I may need them 2 days the next week, obviously I will need a pool of potentially available people.
What is the most Tax efficient, LEGAL way to pay these workers? Will they HAVE to be “Employed” by my company?
It’s a service industry - employing the services of anyone for any length of time means they have to be employed with someone, somewhere.
Possible options:
Recruitment/Temp Worker Agency
Directly employing help
If you recruit, you’ll need to ensure who ever works for you can legally work for you. Your failure might if you are lucky lead to one warning, but after that, it will cost you somewhere between 5k and 15k for each illegal person employed. You should ensure you have a photo of ID card (passport being really your only option since the UK does not have an ID card, and a drivers license does not confirm someone is legally resident and permitted to work). Non-EU passports should have a work permit that specifically says they have the right to work - if in doubt, avoid risk.
Self employed You will still need to confirm they can be legally employed, but they will be responsible for paying their own tax/national insurance/pension. Difficult to find the people you need but not impossible.
Regardless who you pay…
All payment should be signed for - it would be best to pay electronically so you (and any tax audit) have a trail. If you pay cash, make sure you get signed receipts which you should keep with the photo copy of the ID as part of your records.
I recommend a good accountant - they are not expensive (my UK accountant costs me about 700GBP a year, though I do much of the paperwork and they audit/review my stuff once a year). Failing that, I suggest you call your local tax office - I’ve had a small business within the UK since 1994 and all my approaches with the tax office have been treated fairly. They are not out to trick you - they have enough to do besides spending expensive time/money on trying to entrap a small business. Ask them for advice on national insurance contributions, paying income tax on behalf of your temporary employees.
Undertaking temporary labour is paper heavy but once you are familiar with it, you can create a system that proves less painful. But if you cut corners, do not expect the tax man (or woman) to be understanding of your misunderstanding.
One tip you might learn from is based on two family members who ran pubs.
Think creatively if you recruit yourself. Who would be responsible and flexible, and possible regular? Think of teaching assistants, lollypop lady who help kids cross, school lunch servers, housekeeping/cleaners, keep an eye out for stuarts at football games, boy scout/girl-guide leaders. All of these are likely to have first-aid experience which could prove helpful if one of your teams get adventerous and fall from a tree or trip and fall somewhere.
Oh! Get liability insurance and create yourself an Limited Company. It is not expensive, but if a bad day happens, and the law see’s that it was accidental and not lazy oversight of health and safety, the company will be held liable, not you, your mortgage etc etc (but if the law finds that you cut corners, they will hold the directors of the business liable).
Lastly - I only ever did paintball once… 20+ years ago and loved it so… so… Best of luck on your adventure creating adventures for others!
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