I'd appreciate some advice and input on this question. I have someone who works full time, 5 days a week. They currently do a voluntary job in their spare time but are now running out of spare time! The organisation they volunteer for doesn't want to lose their skills and is willing to pay them for one day a week. They can't afford to drop a days pay. If they cut down their full time employment to 4 days a week is it ok to keep their current employment contract and re-charge the other organsiation for their services for one day a week; gross day rate plus employers NI. The two companies are not connected in any business sense.
The reasons for doing this:-
The VO doesn't have to set up a payroll scheme
No need to change the current employment status until we are sure it will all work out for all parties concerned.
Is there any reason why this shouldn't be done from a legal, tax point of view?
My initial thoughts are that a contract is put in place for, say, 6 months so that all parties can evaluate after that time and see if it's working. If it becomes permanent then institute more formal arrangements.
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What about holidays, etc?
How would it work with holiday pay, sick pay, etc?
What happens if the charity decide they don't need employee anymore / can't afford them
Are you VAT registered? If so you will have to charge VAT too