What is a sub-contractor in the UK?
A UK sub-contractor can either be self-employed (invoicing in his own name), or work through an intermediary – usually his own one-man band UK Limited Company. By this I mean he may be the sole director or shareholder, or his wife/husband/partner may also be involved. The main reason why an individual would invoice though his own company would be to withdraw profits by way of dividends rather than through a UK payroll, and thereby avoid Employers National Insurance.
Basically – a way of avoiding a permanent employment relationship and Employers National Insurance (social security). (more…)