The cost of a subcontractor you engage to help you perform services such as IT support on a short term basis. Remember that subcontractors are subject to strict rules under IR35 and you must prove that the person is not an employee of the business. Contractors are generally hired on a project basis to help you fill a gap in resource or assist on a tricky task.

IT contractors (where your main services is IT) or legal contractors (where your main business is Legal services).

Freelance designers or copywriters to help produce content.

Amounts paid to contractors who are actually deemed employees via the IR35 rulings.

It is recommended that you undertake a review of the contractual and practical conduct of the services to ensure no additional worker or employee obligations start arising. Penalties can be levied where someone who meets the definition of a worker or employee is not contracted on the correct basis.

Watch out for the rules of IR35. It is a piece of tax legislation that aims to recoup taxes on contractors who are disguised as employees at a similar rate to employment. As a company if HMRC determines that you are working under an IR35 contract you will have to pay income tax and NI on the sales income that the intermediary receives (less certain allowable expenses).