How do payroll issues impact on a temp recruitment business - while temps are on assignement they are employed by the agency not the client, so I assume the agency is liable for any applicable costs/taxes?

The biggest thing you need to worry about is SET.  To be more specific, you need to make SURE you are getting all your estimated taxes in on-time (although there is an income threshold that if you fall below, you will not be required to pay quarterly estimate -- consult irs.gov for this dollar amount).  Otherwise, failure to pay these on time can earn you love letters from the IRS (with attached ransom notes)  ;-)  Good luck!Disclaimer: I own a payroll and benefits firm.

Yes it is correct that you dont have to pay payroll taxes! Employees who are treated as independent contractors are exempt from having payroll taxes collected out of their paychecks. As the owner and the only employee of a single owner LLC, you do not require to pay payroll taxes.

You can find information on the taxes you will need to pay on the IRS web site at http://www.irs.gov/businesses/small/article/0,,id=115043,00.html and http://www.irs.gov/businesses/small/article/0,,id=115045,00.html

You don't have to worry about payroll in terms of a getting a payroll services company and having them take care of your payroll processing. You are a single owner LLC and will be treated as a sole proprietor for tax purposes. You do have to worry about self employment taxes and paying estimated taxes, unless you have enough taxes taken from another job.

If you are self-employed, you are responsible for paying a self-employment tax that is similar to the social security and Medicare taxes withheld from the pay of most wage earners. For more details, see Business.gov's Employment Taxes guide.

Generally, staffing agencies and leasing firms are responsible for payroll and unemployment taxes when they contract to pay temporary or leased employees directly who perform services for the workplace (business client) employer. The business employer (client) is considered a recipient organization under Section 3401(d)(1) of the Internal Revenue Code (I.R.C.). If it does not control the actual payment of wages and taxes, it is not liable for payroll taxes under the Tax Code. Hope this helps!

you may want to consult a tax accountant about how best to structure your tax affairs if you're self-employed. It may be more beneficial to pay yourself as an employee of the business (in whcih case you'd need to follow all the same processes you would when paying 'yourself' as you would with any other employee), or rather simply taking profit as a director at the end of the year (if you can afford it). Tax rates may be different and you can save a lot this way.