What type of agreement do I need?

I’m running a small business which offers handymen and cleaners to customers.  The customer pays the handyman/cleaner direct an hourly rate and pays me a nominal amount for each hour that is worked as an effective introduction fee.  I want to make sure the workers I use don’t think they are employees of mine and they must be responsible for their own NI and tax.  What agreement do I need to cover this?

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Alasdair Taylor's Answer

I would describe this as a form of referral arrangement, with slightly unusual feature that the customer rather than the cleaner/handyman is paying the referral fee.

To avoid the risk of the cleaner/handyman being treated as an employee by the courts or HMRC, you should take account of this guidance in structuring the relationship (not just the legal documents):

  • http://www.direct.gov.uk/en/employment/understandingyourworkstatus/workersemployeesandselfemployment/dg_10027916
  • http://www.hmrc.gov.uk/ir35/guidance.htm

I don’t think any of our current template documents are ideal for this situation, but you might find that one our competitors (e.g. Netlawman or Clickdocs) has something suitable.

Because the customer is paying the fee, you will have a direct contractual relationship with the customer as well as the cleaner/handyman, and you may need (or it may be sensible to use) an agreement of some kind in respect of this relationship as well.

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