Employers Liability Insurance

If any of the following apply to your use of Bona Fide Sub Contractors you would be required to have £ 10 million employers liability insurance):

• You deduct national insurance contributions and income tax from the money paid;
• You have control over where and when they work and how they do it;
• You supply of their work materials and equipment;
• You hold a right to a share of any profit your workers make although an Employer may choose to share this with them through commission, performance pay or shares in the company;
• You require the sub-contractor, in person to deliver the service and they cannot employ a substitute if they are unable to do the work; or
• They are treated in the same way as other employees, for example, they do the same work under the same conditions as someone else you employ.

EL may not be required where (i.e., BFSC’s):

• work is not exclusive (for example, if they operate as an independent contractor);
• they supply the equipment and materials they need to do the job;
• they are clearly in business for their own personal benefit;
• they can employ a substitute when they are unable to do the work themselves;
• you do not deduct income tax or national insurance. However, even if someone is self-employed for tax purposes they may be classed as an employee for other reasons and employers’ liability insurance may still be required.