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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4962
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We are a small PR company and a senior member of our staff

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We are a small PR company and a senior member of our staff is retiring aged 65. We are planning to outsource some of our business to him as he will be going free lance when he retires. We would like however to charge him a finder's fee and also sell him some data he'll need to fulfill his missions. Is it legal and are there any rules/limits we need to be aware of? Thanks for your help
Hello, I'm Keith and happy to help you with your question.

Perfectly legal, it is a quite proper way of doing business.

I would advise you, however, to draw up a contract between your company and your new contractor, for that is what he is, so there can be no disputes over invoices raised. These invoices would be subject to VAT if your company is registered.

If your new contractor wants to recover the VAT he should himself register for VAT and charge VAT on his invoices to you. That, of course, is for him, not your organisation.
Customer: replied 4 years ago.

My concern was more whether HMRC would object to us charging him and him charging us. You don't mention limits in your answer. Are there definitely none?

Customer: replied 4 years ago.
Relist: Incomplete answer.
I received a partial answer to my original question i.e. I was reassured abt the legality of what we are proposing to do but I didn't get an answer regarding eventual limits to the finder's fee and the purchase of data, which is the reason why I asked again. Was advised I'd get an answer from the original advisor only to find out when I opened the question to others that it wasn't the case. A bit confusing.
There isn't any limit. However, if it is too much the company's profits will be affected.
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