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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 44924
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Hello there.. I am hoping to find out what are the steps

Customer Question

Hello there..

I am hoping to find out what are the steps I need to take to employ a US-based, US citizen , salesperson who will be selling marketing services to US based businesses. The employee will be paid a weekly wage plus a commission of sales he makes.

My company is a UK limited company. We registered last June, but have yet to start trading properly. That will happen in the next month.

I think most of the company legal duties are completed. We registered through an online registration service. We have :
• Certificate of Incorporation
• Articles of Association
• Memorandum of Association

Although, we have yet to register online for form CT41G from HMRC.

We don’t have employers insurance yet (if we even need it).



My question is what are the steps I need to take to legally employ this man through the company , and make sure everything is safe and above board on a legal and tax level, for the company and him.


I heard someone say that it is easy to hire a salesman overseas if he states he is a self employed freelancer. Then he can do all his taxes etc, via a “1099” (I think its called, in America)


I’m looking for the quickest , easiest way to hire this man legally and safely. I don’t want to hire a solicitor to assist, but if its necessary I will.

Please if you could outline the steps I need to take, that would be very useful.

Thank you.
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.
Hello, my name is Ben and it is my pleasure to be able to assist with your question today. I can only advise on the UK side of the law if that is ok, I won't be able to assist with what liabilities this person may have in the US in relation to tax, etc.
Expert:  Ben Jones replied 3 years ago.
There are two main ways to employ someone in the UK - either ass an employee or as self employed. There are other options but these are the most common and they will also be most relevant to you.

A person's rights and liabilities will be based on their employment status. This will also dictate how the employer treats them and what they have to do in terms of tax.

It is not sufficient to simply label someone an employee or self employed - you have to ensure that the overall employment relationship reflects that of either having an employee or self employed. The following will explain this in more detail and will give you factors to consider whether the person will be an employee or self employed.

If you can show that this person can be self employed then that may be the easiest way for you to employ them. You will not have any major legal obligations towards them, they will not be entitled to sick pay, holidays, redundancy pay, which a normal employee would get. They will be responsible for their own tax, unlike an employee where you would usually have to work under PAYE. It just makes the whole employment situation much easier. There will be a contract where you can agree on whatever terms you want and that will serve as the main agreement between you - anything that you or they do will be as per these terms.

The person is then unlikely to have any tax liabilities in the UK as they are not a resident here and you would not have to pay any tax or National Insurance on their behalf.

Please take a second to leave a positive rating as that is a very important part of our process. Your question will not close and I can continue providing further advice if necessary. Thank you
Customer: replied 3 years ago.

Thanks Ben!


 


Two questions:


 


1) Where can I go to find out more about the US side of things, in regards to the tax details and agreements necessary.. should I post again somehwere here, maybe under US law?


 


2) So far, i have registered the company. I think most of the company legal duties are completed. We registered through an online registration service. We have :
• Certificate of Incorporation
• Articles of Association
• Memorandum of Association


 


I have yet to register for tax with th CT41G online .


 


Are there any other forms or similar that need to be dealt with before we can legally trade and we can legally emply this man as self-employed>?

Expert:  Ben Jones replied 3 years ago.
1. We do have a US Law section here which could help and you may certainly use as a starting point

2. You do not really need anything to actually hire the man and have them working for you, a contract of employment is recommended though and yu also need need to arrange PAYE if you are deducting tax at source
Customer: replied 3 years ago.

Thanks Ben..


 


In regards to the actual company itself... have I got everything sorted now to be legally trading as the company i just registered? So far, i have registered the company. I think most of the company legal duties are completed. We registered through an online registration service. We have :
• Certificate of Incorporation
• Articles of Association
• Memorandum of Association


 


 


I have yet to register for tax with th CT41G online .


 


 



Are there any other forms or similar that need to be dealt with before we can legally trade as the comapny?

Expert:  Ben Jones replied 3 years ago.
Your query is now migrating towards corporate law rather than employment law, which is where you originally placed your query which is outside of my area of expertise I'm afraid

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