To ask DM to work with me?

[Tillsforthrills]

I own a business and am self employed.

The business has done well but I’m at the stage where I need a reliable staff member to help me. I’m return I can offer very good pay and flexibility but the person working with me would also need to register as self employed and pay their taxes.

DM is in a comfortable but boring job and due to retire in 4 years.

Would it be unreasonable to offer her employment with me for those 4 years or would this affect her negatively.

Anyone expert or knowledgeable in these areas please help as I’d like to know whether it’s worth her while or not.

Setting aside the potential issue of working with family, I’d say a major consideration here is pension. If her current “boring” job is with a local authority and she’s in the LGPS, I doubt you’re offering anything that will come close to her pension contributions for those years. If she only has a DC pension with minimal employer contribution, that’s a totally different story.

Nobody here can tell you if it’s worth her while or not though: even on a basic financial level, we don’t have any of the details!

Another point to consider - how safe are either of the jobs, and what is her redundancy entitlement in current job? I wouldn’t advise anyone to stay in a job they dislike long term - but she may not be unhappy with being bored, and depending on the two jobs, could be crazy to give up security of redundancy payment.

Is she reliable?
What happens if she gets sick (she might be giving up sickness benefits)
Is she willing to do a tax return, is she organised
What are her pension arrangements.

Why would a staff member, that you need, have to register as self employed rather than you being their employer?

@TeenPlusTwenties

Why would a staff member, that you need, have to register as self employed rather than you being their employer?

Precisely

If she has to register as self-employed then she won’t be your employee. And unless you will be treating her as a genuine contractor, she’ll be a “disguised employee” under IR35 legislation and there will be tax implications for both of you.

I can't believe that you're asking your DM to try fiddle HMRC.

@TeenPlusTwenties we could also do it so that I’m her employer. I’ve just looked it up.

She is extremely reliable, hands on and fit as a fiddle.

I’m making an appointment with a specialist tax adviser about this as she’s said she’s interested.

Her pension is with the NHS. She pays in towards it monthly.

@gobbynorthernbird

What are you talking about! It’s above board. No disguised employee. Jesus, please think before you speak.

^^ The above applies to anyone btw, not just your mum. You really need to familiarise yourself with IR35 and what it means for you and rethink what you’re proposing.

@ComtesseDeSpair

I know what I’m proposing. Perhaps if you knew the business I’m in, you wouldn’t assume.

[quote Tillsforthrills]@gobbynorthernbird

What are you talking about! It’s above board. No disguised employee. Jesus, please think before you speak.[/quote]
Nope, it isn't.

When did she start to pay Into the pension for the NHS, how much would she lose not paying into it for these last 4 years?

I’m offering you free advice as a qualified tax practitioner. That you feel the need to be so aggressively defensive suggests you haven’t had much other qualified advice, so I’m glad you’ve confirmed you’re going to seek some.

@MichelleScarn I believe it was around 7/8 years ago.

This is a legitimate business and even after her taxes she would end up with more money with me.

She’s calculating how much she’d lose and weighing it up.

@ComtesseDeSpair

As a tax adviser perhaps you should realise that before making any huge accusations, you would need to know the full details and in this case the type of business is crucial to that.

If she’s already adding it up, and you’re seeing a specialist tax advisor, what more can you get from MN with no details?
I don’t mean that in a snarky way... just don’t see how this would be helpful to you.
Just remind her to look at her pension too, as I said before. As she’s NHS it’s likely to be valuable.

There are so many variables but mainly

• how will it affect her pension?
• how will she structure herself as self employed - would she be a sole trader or set herself up as a ltd?
• what are you offering compared to what she’s on Taking into account things like sick pay, NI, possible expenses etc

Out of interest why wouldn’t you just employer her rather than as self employed?
Have you checked IR35 and how it could apply?

It doesn’t matter if you are going to use your mum as a sales rep, have her be your private chauffeur, or pimp our her sexual services. If you are a “business owner” looking for “a member of staff to help” and aren't aware of the principles of contract which distinguish employment from self-employment, then it’s a very bad idea to rope your equally unaware mum in when it could end up having enormous financial implications for her down the line.

I definitely advise you make sure you take that professional advice you mentioned.

If I were her I would want those 4 years of pension contributions more than a higher wage. They will last her all of her life.

[quote Tillsforthrills]@ComtesseDeSpair

As a tax adviser perhaps you should realise that before making any huge accusations, you would need to know the full details and in this case the type of business is crucial to that.[/quote]
Well that's just part of it. Whether you're self-employed or not isn't just about one factor. If you're setting the pay and conditions then it might not be as clear-cut as you think.

Get advice on whether the role you are offering is really self-employed, whoever you end up recruiting.

@Cocomarine yes thank you those are all valid points, she can earn well with me and gave flexible holidays to see grandchildren abroad but I just wanted to see opinions on whether others would do this.

@2021booklover according to brief conversation with tax specialist she would be a sole trader or if preferred an employee with the main difference being sick pay. That is what she would be giving up if she were a sole trader. Tax specialist will go through options with us, both are above board with HMRC and perfectly viable.

@HollowTalk

yes, this is what would hold us back as I would feel terrible about it.

She isn’t very happy in her job but is happy enough to plod on for next four years.

@RaspberryCoulis

You’re right, I’ll look into the employing someone part of it properly rather than her registering as a sole trader.

If she’s an employee you will need to pay the NI contributions, put her on payroll, and offer pension contributions. It’s a huge difference.

@2021booklover

I’d be happy to do that but would be nervous about it as I haven’t done it before. I’ll see if it would be worth it.

Would her pension then just continue with me as employer?