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.

Losing four years of NHS pension contributions, will reduce her pension income for the rest of her life.

If she doesn't have the required number of NI contributions for her state pension, that could further reduce her income for the rest of her life

You (and your Mum) need to understand that for her, this isn't just a four year help-out to you. She will be making a lifetime financial sacrifice.

She currently has other employment benefits that self employed people don't have; for instance, redundancy entitlements, adequate sick pay, paid leave. If Brexit or covid wreck your business , or one of you gets long covid, she might not even have a salary.

I'd be very surprised if financially your dm wouldn't be best of staying in her current job. The NHS pension is a good one.

Thank you ladies that is indeed sobering and I’m thinking I could employ/work with someone else.

I’m not a financial advisor - I do own a business though. She would need to seek advice on her pension.
I think what you need to do is work out how you would do this if employing a stranger. Would it work as a contractor/freelance position and not be subject to IR35?
Would the benefit to your business outweigh the extra cost of employing someone?

Think of those things first, then if your mum is the right fit.

@2021booklover excellent advice

Thank you all

Good luck! Whether it works out with your mum or not congratulations on growing to a place where you need extra help.

@2021booklover thank you so very much for that, it has been hard work, blood sweat and tears

Self employed "employees"? Aggressive and cagey over details? My money's on OP being a MLM hun.

[quote Tillsforthrills]@gobbynorthernbird

What are you talking about! It’s above board. No disguised employee. Jesus, please think before you speak.[/quote]
It may not be
iR35

@WhatTiggersDoBest not at all.

Pointed out that certain posters who came on accusing from the start that I was out to fiddle taxes that they are wrong.

MLM - ugh it is nothing of the sort, which more reflects your line of thinking and who you are rather than my business.

But happy new year to you.

Good luck with your business OP. Just commenting that as an NHS employee, there is no way I’d be losing 4 years of pension contributions at her age.

You would not be able to pay her enough to make up four years of lost NHS pension!!!

@AmandaHugenkiss

Thank you for that, I hear you. I really do and although it seemed like a great idea that’s really the crux of it. Thank you for the good wishes.

I'd be VERY wary about losing her NHS pension. It can be complex to work out, but that will be the biggest loss to her. And not something that your tax adviser will be looking at (especially if they are your tax adviser rather than your mum's and if you haven't asked them to consider that specific aspect as it's not a tax question).

Also, your tax adviser should be telling you that it's not a case of you choosing whether she is self employed or whether she is treated as an employee. That is determined based on the facts of her work, with reference to established case law. The facts will override any legal agreement, so it really isn't just a case of one has sick pay and the other doesn't.

And be more fair on the other posters, you have specifically said that she will register as self employed and that you would "offer her employment". They are mutually exclusive hence the points made by previous posters.

You haven't really provided enough info here to get good advice, and tbh I wouldn't necessarily recommend posting sufficient detail on a public forum, so work with the advisers your paying for and your mum may want to get independent financial advice.

If the job is in the public sector, or a solid private sector job, it is likely she is better off where she is due to pension.

How about offering her a job when she retires?

YABU for getting snippy that people have questioned the self employed status considering you state you would be employing her.

If you’re getting professional advice from someone in real life who is aware of the full circumstances and is a verified expert, I’m not sure what you expect to gain from a MN thread tbh. I appreciate you can’t give specifics of your business model and equally you can’t verify the qualifications of anyone giving advice.

You and your mum should be get professional advice from separate sources so there’s no conflict of interest and they can look out for each of your best interests.

@SuperrHann thank you, I see exactly what you mean and have asked for two scenarios - one for my mother in her position (which I’ve decided against for now but which she would still like to see, as the business has expanded premises and is doing well) and another in the more likely scenario of me employing a stranger.

@tttigress
Absolutely yes! I’ll be waiting for her with a flexible part time job when she retires

Unless you can offer a considerably better salary than she already has she would be very foolish to give up her present job, NHS pension not to mention any potential redundancy package. If she becomes self employed she will lose almost all of her employment rights and benefits.

@Brighterthansunflowers

I’ve taken advice from those who haven’t accused me of being a tax fiddler, even if it was sobering advice. I am very interested in opinions that don’t include that automatic assumption.

@SirGawain

I can offer her a significantly better salary for at least 3 years but the risk of the last year is what is putting me off working with her until she retires.

@SirGawain for the fourth year, she would earn what she’s earning now. So, even though I haven’t had the tax appointment, based on the advice I’ve received here I’d prefer to put it off for now.

In your DM's shoes I wouldn't even consider this.

In yours I would, genuinely, go and learn a lot more about employing people.

@2021booklover it’s really a huge difference.

It’s been amazing to see my business off the ground but it brings a lot of responsibility and learning all about employing others. It’s a good thing but still a bit nerve wracking.

Could your mum take early retirement from the NHS and work for you? She would secure a lower pension but this would help inform whether the salary offered plugged the gap

@unmarkedbythat

That’s correct I have a lot to learn about it. One thing I will not have questioned is trying to fiddle taxes as my aim in life or in getting help with my business.

I’m really looking forward to it.