going from sole trader to employer

[Gordanus]

Hi I'm in a position where I'm beginning to think seriously about becoming an employer but am terrified at all the responsibilites that come with it. I've been getting other people in to help out as sub-contractors but they've ended up doing so much work for me that they are nearly fulltime. And another thread led me to look at the revenue guidelines on whether you are self-employed or not. I'm afraid one of them will see it, or think about this and decide that I should really employ them. I'm not a great bookkeeper and the thought of having to sort out wages, PRSI, tax etc frightens me. But I'm afraid the business will collapse if I don't expand. Has anyone out there either gone from ST to Employer or conversely decided not to? Or is there any other way to go?

 

[antoinolacht]

Personally, I think you have the right attitude. You are trying to keep everything legal and straightforward, which is a good thing. Becoming an employer is a big deal, and you should plan carefully.

If you plan carefully, it might be possible to avoid the revenue issues with subcontracting. I don't know your business though. It might take some planning and cooperation from your subcontractors.

When you think about it, it might make more sense to take on 5 or 6 people at the same time, including an office administrator/HR person, rather than adding people in dribs and drabs and never having any real system for managing the growth.

 

[podowd]

If you are taking on staff on a sub-contract basis but they are working for you virtually full time it is likely they would be regarded as employees if the Revenue looked into. The finance act 2006 introduced new powers in this area as the revenue are looking to clamp down on people acting as subcontractors instead of employees. I would definitely recommend going down the route of registering as an employer and doing things properly (although you will have to look at the cost of doing so as you may have to pay your "staff" more as employees to make up for higher tax/prsi that they pay). If you are not a great bookkeeper then you need to use an accountant to deal with the wages, doesn't have to cost the earth and is essential if you want to stay on the right side of the revenue. feel free to contact me if you want to discuss it in more detail.
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