Subcontracting Non-Nationals as sole traders

Ballyman

Hi
I'm starting up a company and I will be employing/subcontracting people to work for me. However, I don't want them to work for me directly and would prefer to hire "sole traders".
I would provide them with work and they would invoice me for any work they carried out for me.

I would envisage hiring or to be correct, sub contracting a number of national and non nationals (who are members of the EU) so I presume there would be no issue with this same as there wouldn't be with an Irish person??

Is it as simple as this?? I can't imagine it is and there has to be millions of reasons why I can't do this but I really want it to work this way at the beginning as my capital would be quite low and I can't afford to hire/pay someone to do wages/tax for me so I thought this would be an easy way round it by letting them do their tax themselves.

I would only hope to do this for the first six months, pending it being successful of course before I could revert to employing people as PAYE workers.

Can non-nationals, who are members of the EU, such as Pole's etc. apply to become Sole Traders in Ireland??
Anyway, thanks for any help you can provide me with.

blue4ever

Any citizen of the EU can work here PRSI and Sole Trader – same rules apply to them as our own.

(pssst – I believe that’s they should be called ‘Foreign Nationals’, a non-national actually means someone without a country!)

kluivert

Sounds like you want to take on Sub Contractors.

Once they are registered for tax then you should have no problem. You must get their PPS No and Date of Birth.

If they have a C2 card then you can pay them 100% of the bill.

If they dont have a C2 then you pay them 65% of th bill and issue the person with a C45 Cert (pink) for the other 35%. The 35% you havent given to the sub contractor must be sent the the Collector General in your monthly RCT Return. C45 Certs must be applied for from your local tax office.

You must also keep a record of the C45's that you give to people, each C45 cert has its own number, the revenue will give you a card to keep these details on.

Warn you now, if you dont do this properly and the revenue do an audit on you, they will try and take as much as possible. If its done properly then you shouldnt have anything to worry about.

I know someone who paid to pay over a large lump sum to the revenue due to incorrect operation of RCT.

You must also regsiter for RCT - Relevant Contractors Tax with your local tax office if you havent done already that is.

See Accounting Question post for similiar question

Ballyman

Thanks for your help.

What does a sub contractor need to do to get a C2 card?? Do I need one myself to invoice a company for work??

My sub contractors (sole traders) will be invoicing me for the work they carry out on my behalf and then I will be invoivcing the company where the work was carried out for, obviously for a higher sum than I was invoiced for (consultancy fee etc.). Does this make sense?

kluivert

Sub Contractor must apply to their local tax office for a C2. You should also do the same for yourself personally.

You need to have all your tax affairs up to date before they will issue one to you.

In theory, you personally, are the sub contractor of the company and the other lads are the sub contractor of you.

The same princples of sub contractor payments apply between your company and you as between your sub contractors and you.

jayok

Hmmm... we're a limited company that also contracts sole traders. Do we also need to work with the C2 thing as well.

Currenly we've two sole traders on the book - I haven't even thought of the whole C2 / C45 thing. Is there a limit for where C2 becomes effective?

Thanks,

indiewindy

You only need to worry about c2s if you are involved in construction, forestry or the fishing industries. As Kluivert says it can be expensive if you get it wrong.

blindeyes

kluivert wrote:

If they have a C2 card then you can pay them 100% of the bill.

Having a C2 is a step there granted, although you write with implied authority it is sadly misguiding, I myself have no qualification in that field but the Revenue do and if you ask them is a C2 sufficient to pay your sub-contractor 100% my guess is that you'll be told that a valid RCT 47 must be in place. The RCT47 being the only document allowing 100% payment. Paying 100% off the back of someone simply having a C2 leaves you liable for the 35% should Revenue have an issue. Could be a costly mistake somebody taking your advice blindly, its my first time on this site but I'm looking forward to reading some more of kluivert's gems already.
Buyer beware.

ANXIOUS

you should probally look at a few cases we're this was tried before. such as the sunday tribune 1985. henry denny v minister of social welfare. im pretty sure both of these relate to you.