Paying people who are not employees
Paying people who are not employees are pretty straight forward. In the UK, you would check to see if the employee meets IR35 rules, and if he or she does not, than you can pay the person as a contractor. When the person is a contractor, the contractor would issue an invoice to your company, and then after receiving the invoice, the company would pay the invoice just as it would any other supplier.
In what situation is this relevant
For example, Cleartrade, which is a platform that links tradespeople to customers needs to pay the tradespeople that customers hire. In this case, like a marketplace, Cleartrade, books the customer revenue, and when the job is done, Cleartrade can then pay the tradesperson based on its vendor supply rules. It is important that Cleartrade does its IR35 checks on all its tradespeople. This is a simple check that can be done by visiting UK Government website, which goes through a list of defining criteria.
One example of this is if the tradesperson, who in this case is a contractor, only works for Cleartrade, then the tradesperson would fall into IR35 rules and therefore be subject to NI withholding as well as Cleartrade being subject to employer NI. Hence it is very important for companies that pay contractors to regularly check the IR35 eligibility of their contractors.
Main criteria
The main criteria which Gary Lineker's case aptly highlighted is that the contractor needs multiple sources of income. In Gary's case, he had BTSport and well as the BBC, even though the BBC was the bulk of his income. This meant that off payroll working rules applied, that he did not meet the conditions of IR35 and hence was not subject to withholding for NI and the BBC did not have to pay NI on his earnings. This case highlights that rules need to be regularly reviewed for eligibility.
The HMRC tool on the website has a very useful interactive tool which you can use which asks you a series of questions. There is also a list of professions which may be excluded from the general rules here, hence as someone who will be paying others whether as employees or contractors, it is a good idea to familiarise yourself with the rules.
This kind of transactions affects many platforms such as Uber, Deliveroo, Justfix, and many others. These online platforms hoover us customer demand using good websites and then percolate the demand down to the services that they provide. The service provider, the driver or tradesperson would then be paid for his or her services. Hence, managing the status of these workers is a constant process.
Regular employees
For regular employees, there is ShiftAI. ShiftAI lets you pay your employees and report your NI, income tax and provide your employees with payslips. As an employer, you can then pay the PAYE bill using your online gateway account.
