Labour only. What are my obligations?

[flanagaj]

If I use individuals on a labour only basis, is there anything I need to do myself so I'm not treated as an employer?

[nod]

Nothing other than your site insurance covering your liability ALL Self employed trades should have there own public liability 

While you are employing them to do a task There not employees and it’s up to them to sort there tax out Even if you pay them in cash 

[Gus Potter]

33 minutes ago, flanagaj said:

If I use individuals on a labour only basis, is there anything I need to do myself so I'm not treated as an employer?

To give yourself some cover then you might want something in writing, with a valid name and address (think how the VAT man may take a view on your zero rated build) that they have stated that they are a contractor on a self employed basis and providing a service on a labour only basis. 

 

18 minutes ago, nod said:

Nothing other than your site insurance covering your liability ALL Self employed trades should have there own public liability 

While you are employing them to do a task There not employees and it’s up to them to sort there tax out Even if you pay them in cash 

And here it gets tricky and you are potentially out on a limb. @Nod mentions public liability. I have public liabilty insurance.. this covers me if I walk out with my ladder and scratch the home owners car, cause someone to fall over in the street. It costs me less than £200.00 quid a year. I also hold PI insurance and that costs thousands. 

 

In an ideal world (which it's not) your direct labour should hold Contractor's insurance which would cover you if they burst a pipe just before going off site and flood the works during the night. Now let's face it.. you are looking for savings via labour only. The reality is stuff like this happens more often than you would wish for. Who do you sue? your direct labour probably have no assets. 

 

I'll be the devils advocate here. If you are employing direct labour then you well and truly fall under the CDM regulations and likely under the statutory Principle Designer rules as you are directing site operations. I've made some posts about this recently. 

 

To finish, the least of your worries is being treated as an employer in terms of tax, think safety.. it's all fine until something goes wrong and someone gets hurt. Often labour only stuff has folk that are less experienced and thus the risk of an accident is much higher. 

 

I'l make a point here. Just say you had a young son or daughter setting up on their own in the building trade, they need the bread and butter work so labour only is great work. But they go to a site that you have not set up safely, you're not properly insured and they get hurt due to your negligance, lack of insurance. I'll tell you this, most parents will take you to the cleaners if that happens. 

 

You can take out insurance for this. Have a look on the internet for contracts works insurance, you can exclude tools / plant and so on. 

 

The above is tough love but when you do labour only it can work.. and you save money but you need to understand the risks and manage that to suit your circumstances.

[Gus Potter]

@flanagaj

 

The above is blunt. As a word of encouragement |I've got a couple of self build projects on my books in England, they are of high value, very complex design, carry extra risk and probably subject to local scurtiny by BC and the passing public.

 

I've seen photos of their sites and the set up looks great and safe. I ask, has that cost you lots? the answer is, we budgeted for that and it's not as hard or expensive as you think. The guys on site love it and that leads to harmony, everyone enjoying thier work. 

 

I understand that they have an element of labour only and that the extra insurance cost is not too onerous. But they are both the Principle Designers and I act in support.  

 

Are you seeking a warranty from say Protek? If so read the fine print of their offer. 

 

If going the warranty route then labour only needs to be supervised.

 

I've recently had a run in with ProteK as they were blatently passing liabilty, but it seems to be sorted now. They got far too anal about passing risk to me as a PD and SE, they were, I think, just chancing thier arm, but turned out is was admin error?

 

It's stuff you have to navigate and make the best choice for yourself. 

[Temp]

17 hours ago, flanagaj said:

If I use individuals on a labour only basis, is there anything I need to do myself so I'm not treated as an employer?

 

Just a reminder that labor on a new build should be zero rated for VAT to you. Not charged and reclaimed. 

[Oz07]

I honestly think with all the regulations the best thing to do is stick your head in the sand and take @nods approach. Your head will explode if you try to cover every eventuality. Even the big boys who lobby for alm these rules cant get their paperwork in order. I have never once seen anyone read a rams or method statement on an induction everyone just signs them. Get some site insurance, try to get it as comprehensive as possible, make sure subbies insured, common sense safety and hope for the best. 

[nod]

1 hour ago, Oz07 said:

I honestly think with all the regulations the best thing to do is stick your head in the sand and take @nods approach. Your head will explode if you try to cover every eventuality. Even the big boys who lobby for alm these rules cant get their paperwork in order. I have never once seen anyone read a rams or method statement on an induction everyone just signs them. Get some site insurance, try to get it as comprehensive as possible, make sure subbies insured, common sense safety and hope for the best. 

Exactly ALL subcontractors that work on sites have to have there own PL 

I prepare Rams on a monthly basis but it’s not required on a single PRIVATE build 

Ideally you would have an accident book First aid kit and a signing in book 

Your as much an employer to the lads onsite as you are to the guy that mends your washing machine 

Ive both PYE and subcontractors that work for my businesses I cover the PAYE with sick pay holiday pay and public liability The revenue destination between the two is Are you responsible for your own work and tax 

The self employed have to have there own PL and CIS ticket Or they can’t go on site 

Keep it simple Your not there employer 

[flanagaj]

My CEMP apparently requires me to educate contractors on ways of working.  Do I need to get a hardhat with 'Foreman' written on the front and a welfare unit for after work detention for those contractors who violate the policy.  I can't decide whether they should write 100 lines or a 1000 lines?

[G and J]

This sounds daft but is really a case of what "good" looks like. We keep it simple

 

No one comes on site without us being there

Everyone gets the hard hat hi vis talk (they don't all do it)

We look out for anyone taking a risk (ladder balanced on a block) because we are there with them and only have 1 set of people in at anyone time.

If a singleton comes on site we want to know who we ring if there's a problem (health or god forbid accident)

We make sure everyone knows our site working hours, that we are no radio/no smoking and that we have neighbours.....simples!

 

[flanagaj]

14 minutes ago, G and J said:

This sounds daft but is really a case of what "good" looks like. We keep it simple

 

No one comes on site without us being there

Everyone gets the hard hat hi vis talk (they don't all do it)

We look out for anyone taking a risk (ladder balanced on a block) because we are there with them and only have 1 set of people in at anyone time.

If a singleton comes on site we want to know who we ring if there's a problem (health or god forbid accident)

We make sure everyone knows our site working hours, that we are no radio/no smoking and that we have neighbours.....simples!

 

That sounds like a good common sense approach.

[Oz07]

2 hours ago, G and J said:

This sounds daft but is really a case of what "good" looks like. We keep it simple

 

No one comes on site without us being there

Everyone gets the hard hat hi vis talk (they don't all do it)

We look out for anyone taking a risk (ladder balanced on a block) because we are there with them and only have 1 set of people in at anyone time.

If a singleton comes on site we want to know who we ring if there's a problem (health or god forbid accident)

We make sure everyone knows our site working hours, that we are no radio/no smoking and that we have neighbours.....simples!

 

No radio and smoking would exclude a lot of good contractors from your site round my way. Seems sensible otherwise. 

[G and J]

4 hours ago, Oz07 said:

No radio and smoking

Understood......we are a timber frame build, close (1m and 1.5m) to neighbors properties and it was the neighbours who put the no radio in the party wall agreements, not that we're complaining.....horses for courses

[G and J]

8 hours ago, Oz07 said:

No radio and smoking would exclude a lot of good contractors from your site

Thought about this a bit more...... our excellent brickie team did look a bit crest fallen at no radio, but did come and have/are doing the business...the solution me thinks...... copious tea and payment on the dot 😉

[Oz07]

15 hours ago, G and J said:

Thought about this a bit more...... our excellent brickie team did look a bit crest fallen at no radio, but did come and have/are doing the business...the solution me thinks...... copious tea and payment on the dot 😉

Yeh the timber frame smoking is understandable, i'd be saying you can only smoke outside. The radio i'd probably just say don't take the piss with the neighbours as you have to live next to them. Fair play for finding good guys who have got on with it regardless though!

[JohnMo]

On 26/09/2025 at 09:51, G and J said:

no smoking

We actually had no one that smoked, from the trades we employed. Made the statement about no smoking, when they came on site, all said they didn't smoke.