My mum hs recently set up a new business where we will be hiring people on a self employed basis. We spoke to Sage who said we could use their Payroll software to pay our employees, and confirmed to us that SAGE 50 PAYROLL COULD BE USED TO PAY EMPLOYEES WHO ARE SELF EMPLOYED. So we spent just under £1000 buying this software and nearly £400 doing a course on Sage Payroll so we could pay our workers.
Whilst having problems putting our employees details on to the software, we sent many emails and made many phone calls to Sage "support" before they eventually told us today that we CANNOT use it for this purpose. We wer told we will have to invoice ourworkers from the company bank account.
What I'm wanting to know is how we go about this as sophisticatedly as possible?
Sounds a bit messy! Sounds like very bad advice from Sage
If you are hiring self employed persons, then they should be invoicing you/ your mum for their work, and you pay them on invoice. Just like any other supplier.
Might help to know what these people are going to be doing, and if you/ your mum are the only business they work for. There are rules that define whether a person is self employed, or employed. It is the business that must satisfy itself that a person is not an employee
As Bill said, they invoice you, but you can't really call them employees unless they're employed. Sounds like an expensive way to find all that out though!
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
Very bad advice from sage and at a very expensive cost to you! Agree with comments above. They are self employed and should invoice you and be treated as any other supplier. I would show them in the accounts under outsourced services.
Let's not degenerate this into another Sage bashing. 2 sides to every story.
All calls are taped and logged. If indeed they have wrongly advised you will sharp get a refund. Call them and raise a complaint in a civilised manner. If you were clear that you were only paying self employed then payroll would not be appropriate.
As has been said self-employed cannot be called employees because they aren't. They can be called contractors or freelancers and they should invoice you for their services. You need to take a look here http://www.hmrc.gov.uk/employment-status/index.htm#1 to ascertain if your "employees" are actually self-employed. If you have any doubts about their status you need to be very, very careful as if they are not classed as self-employed in the eyes of HMRC you are liable for NIC contributions, interest and fines.
There are several alarm bells ringing here! Not only have Sage given you wrong advice, and potentially flogged you (very expensive) software you don't need, but you refer to your employees - your words - as self employed. Which are they? They cannot be both.
I know this sounds condescending, but you really need to get some proper advice from an accountant. There are many issues that you need resolving, because if it turns out that your employees are indeed employees, you will be liable for undeclared PAYE and NI. Not to mention the rights that your employees will have.
Sorry to sound harsh, but the Sage misselling issue is secondary here.
In this case, the self employed employees will have the control to send you an invoice as that is how the ir description works for them. And upon receiving the invoice, then it will be your turn to send them the payment.
I think the total expenses could have gone way down if you have consulted the forum first. Because in my opinion, that price is way to steep.
Hi there, sorry I'm new to all this. Yes the people I am talking about are "freelancers"..just confirmed by my mum. We run a chat line business where these people are paid per minute hold time on a call. We contatced SAGE and they have given us a full refund and also refunded the course fee's for the training programme I took to learn their payroll software. We have softwae that tells us how many minutes our freelancers have to be paid for each week, so how would they invoice us when they wouldn't know the exact total of minutes they have to be paid for? We are going to contact HRMC and get it all sorted as SAGE had us beleive for a long time that their payroll software was what we needed. Sorry for the confusion.
You could set up a self-billling arrangement with your freelancers.
To avoid spending any more money that you may not be able to recover, hire a professional to give you advice on your financial set up and procedures. You won't regret it.
