Subcontracting

The Revenue have rules as to who is an employee and who is a contractor. If you are working full time for one company/individual, and your conditions indicate that you are an employee - you are an employee - and the company is the one who the Revenue will come back at if they do not treat you as an employee and operate PAYE/PRSI. This would be the case if you considered yourself self-employed (not working through a Ltd company). Please also note that the Revenue could also come back to the individual also, but this does not usually happen.

An aside on this is that treating individuals as employees protects their rights under employment law, etc (redundancy payments, certain Social Security beneifts etc).

However, using a Ltd company gets employers out of this situation as you are then providing services through a company rather than personally.

However, I would point out that the Revenue will at some point hit this, and it is not guaranteed forever, but at the moment they do not attack such set-ups, and there is no guarantee that they will not do so.

Note that in the UK, the UK Revenue brought in IR35 rules for sub-contractors using Ltd companies, through legislation, looking through the company directly to the individual.

I would guess (and this is only a guess) that the Irish Revenue will follow suit on this at some time.

Thanks Domo. That's similar to the advice I've been given by a tax consultant. The problem I'm facing is the cost & administration of handling PAYE/PRSI for the people I use. Its small sporadic projects (mainly marketing & admin) and we're not talking big bucks. Some of my clients are small retailers who want, for example, a promotional campaign devised and then they may implement it themselves. I've used others to co-ordinate a corporate event - once that's done, I've no more work for them (for a while at least). So I'm not talking a big agency here - its small scale work on a very piece meal basis... doesn't make sense to me to set up all these people as PAYE when they may only work once, or, very randonly for me?

Hi Eddie,

Prima management (www.prima.ie) in Dublin will set this up for you and manage all accounts etc for a monthly fee. They basically have their own company registered and make everyone a sub contractor of this company. They look after PRSI/PAYE returns annually etc for around €130 a month.

Think they specialise in IT contractors though....