If you hire help for your business — whether it's a subcontractor for a project, a virtual assistant, or a part-time employee — these costs are fully allowable. But there are important rules around paying family members and the Construction Industry Scheme.
What Staff Costs Can You Claim?
- Subcontractor payments: Paying other freelancers or agencies to help deliver client work.
- Virtual assistant costs: Whether a regular VA or occasional admin support.
- Employee salaries: If you employ staff, their gross salary plus employer National Insurance (13.8%) and pension contributions.
- Employer pension contributions: Workplace pension contributions you make as an employer.
- Agency/recruitment fees: Costs of hiring through an agency.
- Training for staff: Courses and development for your employees.
Paying Family Members
Yes, you can pay your spouse, partner, or family member — but it must meet two conditions:
- They must genuinely do the work. Keep records of what they do, when they do it, and the output.
- The pay must be at a reasonable market rate. You can't pay your partner £50,000 for 5 hours of admin a week.
This can be a useful tax planning tool because it shifts income from a higher-rate taxpayer to a basic-rate or non-taxpayer, but it must be genuine or HMRC will disallow it.
Example: Staff Costs for a Freelance Agency Owner
| Expense | Amount |
|---|---|
| Subcontractor (project-based) | £6,000 |
| Virtual assistant (monthly) | £2,400 |
| Occasional design help | £800 |
| Total claimable staff costs | £9,200 |
At the 20% basic rate, this saves £1,840 in income tax, plus NI savings.