{"id":652,"date":"2018-06-19T06:06:56","date_gmt":"2018-06-19T04:06:56","guid":{"rendered":"https:\/\/vwg.nl\/uncategorized\/ondernemen-in-een-keten\/"},"modified":"2026-03-03T10:33:18","modified_gmt":"2026-03-03T09:33:18","slug":"doing-business-within-a-supply-chain","status":"publish","type":"post","link":"https:\/\/vwg.nl\/en\/ondernemen-in-een-keten\/","title":{"rendered":"Doing business within a supply chain"},"content":{"rendered":"
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Do you ever subcontract (part of) the work you\u2019ve taken on to another company? If so, you\u2019ll be regarded as a contractor and may be liable for any unpaid payroll taxes owed by your subcontractors. Make sure you have these matters properly sorted out to limit your chain liability.<\/p>\n<\/div>\n

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If you subcontract (part of) the work you have undertaken to a subcontractor, it is possible that this subcontractor may in turn subcontract (part of) the work to another subcontractor. This subcontractor may also subcontract the work further. This creates a chain of contractors and subcontractors.<\/p>\n

Chain liability means that if one subcontractor fails to pay payroll taxes on the work undertaken, all contractors in the chain preceding him are jointly and severally liable for these payroll taxes. You may therefore be held liable for the unpaid payroll taxes of each of the subcontractors. This is because the chain of liability only ends with the main contractor.<\/p>\n

Note!
\n<\/span>A client<\/strong> can only be held liable in one of the following situations:
\n1. the client is regarded as a contractor because, in the course of his ordinary business and without a commission from another party, he purchases a physical structure (in which case he is a self-builder);
\n2. clients in the ready-to-wear sector and buyers of garments yet to be manufactured.<\/p>\n

Hirer\u2019s liability<\/h4>\n

Hirer\u2019s liability applies when an employer hires staff from another employer (usually a temporary employment or payroll agency) to work under its direction and supervision. If the actual employer fails to pay, in full or in part, the payroll tax, social security contributions and, where applicable, VAT owed by them, the hirer may be held liable for the unpaid amount under the principle of hirer\u2019s liability. If the hirer also fails to pay, the tax authorities may, through chain liability, also hold the other companies in the chain liable.<\/p>\n

Contractors and chain liability<\/h4>\n

Chain liability only applies if you are classified as a contractor. This may be the case more often than you might think. Chain liability therefore applies not only in the construction industry, but also in other sectors. A contractor is defined as any natural or legal person who, other than in an employment relationship, carries out work of a material nature in return for a fee.<\/p>\n

Work of a material nature<\/h4>\n

Examples of work of a physical nature include: the construction of buildings, the laying of roads, the maintenance of buildings and repair work of all kinds. However, tasks such as typing, packing goods, processing vegetables and cleaning are also classified as work of a physical nature.<\/p>\n

Tip
\n<\/span>Works or products that are created primarily through mental or intellectual labour are not regarded as works of a material nature. Examples include the work of architects, musicians, authors and consultants. Chain liability does not apply to these works.<\/p>\n

Even if the work is carried out by an employee of the person who placed the order, joint and several liability does not apply.<\/p>\n

Work for a fair wage<\/h4>\n

Furthermore, joint and several liability only applies if the work is carried out for a fixed price. This is often the case. Work carried out for a fee includes not only contracts for a fixed price, but also cost-plus contracts, where the price is determined retrospectively on the basis of materials used and hours worked.<\/p>\n

No chain liability<\/h4>\n

Joint and several liability does not apply in the following cases:<\/p>\n