subcontractor status if has an employee
I have a subcontractor client who in recent years has been doing a lot of work for one main contractor. I have advised him before of the risk such a regular long term engagement could raise for his status but in view of the quaranteed work he has wanted to continue working for this contractor to the excusion of others. However the main contractor himself is obviously looking at the status of my client under the new CIS.
He has told my client that if he takes on an employee it would prove that he is self employed and the main contractor will then continue to pay him as a subcontractor rather than an employee. I don't consider it to be as simple as that as the employee to be taken on would probably be a labourer and so unable to act as a substitute for my client who is a skilled tradesman. However my client keeps telling me that the "builder says " this will work and if he does this he can basically turn up Monday to Friday week in week out without any problems. ( If anyone needs a bit of bricklaying at the weekend I will be available as obviously accountants/tax advisers and builders are equally skilled these days!)
Can someone confirm if I am correct or if in fact simply having an employee solves all my clients problems