Hiring a resource via my limited company, on behalf of a US based company?

[DMCSL_HENRY]

I have a limited company and I have been the only employee for the last 14 years. I am currently contracting exclusively for a US based company. I am the only non US person who works for them so it suits that I have a limited company that I can just invoice them through.

They are now looking at hiring another resource on this side of the world so they asked whether I would be able to run this contract through my company as it would be easier for them.

How would that work? What would be the implications that I would need to consider before agreeing?

Would the new resource also need to have a limited company in order to Invoice me to pay them?

What if the resource were living in England? Are there any Brexit issues?

 

[Zenith63]

I was never involved in the taxation side of this so others will have to comment, but I would say that having been involved in models like this in the past they can be very lucrative, so I would do your due diligence (as you are here, but also taking professional advice!) then grab it with both hands. Depending on the role you may be able to add $100/200/300 per day and once something like this is setup you could find the US company keeps tacking people on without thinking too much about it.

Some things to be careful of though -

1. Cashflow can be very challenging and high risk, your workers will need to be paid at the end of every month without fail while the US company might only want to pay 60 or 90 days after invoicing and might mess around the odd month
2. Currency risk can be significant and bite very quickly, ideally protect yourself in the contract by allowing your rate flex. Be aware that hiring in the UK would add another currency, adding risk/complexity
3. Be careful about employing people as they will start to build rights that are likely longer than the termination period in your contract with the US company. Contractors will be much safer for you, but of course they'll eat into your margin and can disappear quickly
4. Ensure you cover how back-filling will be handled in the contract - are you going to provide somebody different if your person is sick for 1/2/30 days or goes on holidays? How quickly will you replace leavers?
5. Cover off what happens if your customer tries to hire your contractors directly, which virtually always happens
6. Plan from day one that the contract could be cancelled at very short notice
7. Look for opportunities to flip this from providing resources on a day rate to providing a managed service as that will come with longer contract durations etc

This could be a great opportunity and your value to the US company is to make some of their hiring and HR issues disappear, so try to have answers to the above questions from your professional advisor rather than presenting it as a list of challenges/concerns to the customer.

 

[Brendan Burgess]

The duties and obligations of an employer are huge in this country. You are exposing yourself to all sorts of potential claims - unfair dismissal, redundancy, discrimination, etc. There is no way to avoid this risk.

Employers in America seem to be able to hire and fire without much limitation and sometimes get into trouble in Ireland because they don't appreciate that the rules here are very different.

You would need to pay for expensive legal and tax advice. It's just not justified for taking on one person.

You should decline it but offer to help the new person in any way you can, explaining how you operate and helping them to set up their own limited company.

 

[TomEdison]

The duties and obligations of an employer are huge in this country. You are exposing yourself to all sorts of potential claims - unfair dismissal, redundancy, discrimination, etc . . .

You should decline it but offer to help the new person in any way you can, explaining how you operate and helping them to set up their own limited company.

This.

There is the option of not employing the new person but rather taking them on as a subcontractor. But the OP would still be taking on obligations and risks not for his own benefit but for the benefit of his US customer. He should still decline.

 

[Brendan Burgess]

There is the option of not employing the new person but rather taking them on as a subcontractor.

Irish employment legislation looks through such arrangements so Henry could be deemed an employee.

Are you suggesting something like the way the construction industry works? The main contractor employs a subbie to do the plumbing? Again, you would need a lot of legal advice to set this up in such a way to insulate yourself.

 

[TomEdison]

Are you suggesting something like the way the construction industry works? The main contractor employs a subbie to do the plumbing?

This. And I agree that you would want proper professional advice. And, yes, there is a risk that you would be deemed for employment legislation purposes as a direct empoyer of the person concerned, though in this particular context I think that risk is probably small.

Regardless, I wouldn't do it, with or without professional advice. OP has no business reason for wanting to do it; the suggestion comes from the US employer, which is trying to simplify it's HR/contracting arrangements. OP doesn't say what services he provides to the US company but if he hasn't been providing a HR/payroll/etc service for the US company up to now, there is no reason to start. Especially if HR/payroll/contract administration is not his core competence.