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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 78256
Experience:  Qualified Employment Solicitor
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What is the difference to my employees if i become LTD from

Customer Question

hello what is the difference to my employees if i become LTD from sole trader
JA: Have you discussed this with your HR staff? Or with a lawyer?
Customer: no we are a small business so i do all HR issues and accounts
JA: Is the relevant person an employee, freelancer, consultant or contractor? Does the person belong to a union?
Customer: well they are self employed but working for me
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: they are currently paid cash in hand, i have a garden maintenance business
Submitted: 20 days ago.
Category: Employment Law
Expert:  Ben Jones replied 20 days ago.
Hello, I’m Ben, an employment solicitor, and it’s my pleasure to assist you. I may ask for some information first to determine the legal position.
Customer: replied 20 days ago.
sure go ahead
Expert:  Ben Jones replied 20 days ago.

I understand you are wanting to know how your employees will be effected by the formation of your business from sole trader to a Ltd company.  How many employees are there and how many hours do they work each week on average?

Customer: replied 20 days ago.
3 in total 2 are 24hrs 1 is 40 and we have another now and again
Customer: replied 20 days ago.
sorry 4 in total
Customer: replied 20 days ago.
i prefer text as my speech is not great
Expert:  Ben Jones replied 20 days ago.

OK thank you, ***** ***** do you intend to employ them once registered as a Ltd company?

Customer: replied 20 days ago.
how do they have to be? can they still do cash in hand?
Expert:  Ben Jones replied 20 days ago.

OK I understand. Please do not worry and leave it with me for now. I will get back to you with my full reply on here; usually the same day and the system will notify you when this happens. Many thanks.

Customer: replied 20 days ago.
Im not sure i understand the difference as we are growing and thought i needed to change to LTD
Expert:  Ben Jones replied 20 days ago.

No problem. Leave it with me for now and I will get back to you at the earliest opportunity.

I should also make you aware that this is not always an instant service, due to various legal engagements I could have and I may not be able to reply immediately. However, rest assured that I will be dealing with your query and will get back to you as soon as I can. Thanks.

Expert:  Ben Jones replied 20 days ago.

Many thanks for your patience, it is appreciated. I am now pleased to be able to provide further assistance with your query. There should be no impact on your employees as far as their rights are concerned, although technically their employer will change. So instead of you personally employing them as a sole trader, they will now become employed by the Limited company. So they would need to be issued with new contracts (if they had any already) to confirm that change and who their employer is now.

As far as the payments of cash in hand are concerned, you can still continue doing so if they are self-employed – after all, they are liable for their own taxes so you can pay them in cash and then they have to resolve their own tax affairs.

Expert:  Ben Jones replied 20 days ago.

Hopefully, I have answered your query in a way that is simple and easy to understand. If anything remains unclear, I will be more than happy to clarify it for you. In the meantime, thank you once again for using our services.

Customer: replied 20 days ago.
what rights do they have currently, whose liability is it to pay for parking tickets for example
Expert:  Ben Jones replied 20 days ago.

Tickets which they have personally incurred? If so, were they in company vehicles?

Customer: replied 20 days ago.
Customer: replied 20 days ago.
what if they knocked my customers wall down with there own vehicle, i had to rebuild at cost who is responsible for damage to vehicle
Customer: replied 20 days ago.
sorry having issues with staff all questions coming at you
Expert:  Ben Jones replied 20 days ago.

Parking charges are legally he responsibility of the registered keeper of the vehicle, which would mean you or the company. However, you can have a clause in th contract which makes the driver liable and you could even have a term which allows you to deduct such fees from their pay if necessary.

Similarly, with any damage caused, you can have a clause which states that they would be liable for any damage caused through their own actions.

In the end, you can include a lot in a contract so it is important to have a well-drafted contract which covers the eventualities you want to protect yourself against

Customer: replied 20 days ago.
ok say they refuse to sign but we need them at the moment so cant insist, i have changed it for him already
Expert:  Ben Jones replied 20 days ago.

You can always introduce new contracts when the employer changes

Customer: replied 20 days ago.
thank you
Expert:  Ben Jones replied 20 days ago.

You are most welcome and all the best.

Customer: replied 16 days ago.
Should I be becoming a Ltd company? What benefits do we get as a small business
Customer: replied 16 days ago.
My speech is not great better to use text
Customer: replied 16 days ago.
Also I have joined a hr online as we are getting more employees
Expert:  Ben Jones replied 16 days ago.

Hi there, your original question was about your employees only which was answered. If you wanted to know further details about what is best for you as a company, please post a new query for that on our site. Thank you.