Employed or Self employed

Nicknak Registered Posts: 6 Regular contributor ⭐ ? ⭐

Just joined the MiP's after working in practice and enjoying every minute of it.

This may seem a simple question to seasoned members but would like to run through my thoughts before I ask my potential new client any un-necessary questions.

The scenario is a chef who is looking to 'rent' a kitchen within an existing hotel. The kitchen has been fully equipped by the hotel owner and my client is obliged to provide meals 5 nights per week to hotel guests, I believe the breakfasts are dealt with by someone else. My concern was the with the 'provision of equipment' as a relevant factor, although my client would look to employ staff himself and as far I know will purchase the direct materials.

The hotel guests will have the cost of the meals applied to their bills. then on a weekly basis the chef will invoice 90% of the value of the meals to the owner. The remaining 10% is to cover electricity and merchant charges will be retained by the hotel owner.

My thought was to confirm with the client that the 'right of substitution' exists and maybe run it through the HMRC employment status indicator?

Regarding other points, I was going to suggest a partnership entity, as his partner will work as front of house and with the VAT once the threshold was reached I would look to operate a Flat Rate Scheme (t/o expected to be just under the £150k), does anyone see any obvious flaws in this approach?

Thanks for any feedback, and hope I'm not over-thinking the whole situation.

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