Inoff the Red

You will need to tell HMRC that you have started a business and, if you are not already submitting tax returns, they will send you a notice saying you need to. If you start your business now, then any profits earned in the period to 5 April 2018 will need to be included in your tax return for the year 2017/18. Under the current system when HMRC have an idea what your business profits are, they are likely to revise the tax code for your employment so that they collect their estimate of tax on your profits from your day job however, the tax system is going through a fundamental change and the days of annual tax returns are coming to an end. The HMRC's "Making Tax Digital" strategy is coming into effect and ultimately businesses will have to submit quarterly returns online with an year end declaration of income tax and national insurance. It is likely that HMRC will seek to accelerate the payment of tax with quarterly payments on account instead of half yearly as at present. HMRC state that the intention of the MTD initiative is to make the submission of tax info easier and less of burden but I don't know what planet they inhabit if they think quarterly accounting returns plus an annual declaration will reduce the burden on small businesses. Also, HMRC expect businesses to use accounting software that is compatible with their systems to submit this information. At present it is likely that businesses with a turnover below £10k will be exempt from the requirement for quarterly online returns. While on the subject of impending changes to tax system, there are rumours circulating that the budget next week may see the current threshold for VAT registration (£85,000) reduced to levels closer to those elsewhere in the EU.

Well that depends on your business model and the relative strengths/weakneses of a business partner.. As a sole trader there is a limit on your earning capacity because there are only 24 hours in a day and there is a limit to the amount of work you can do. Adding a partner increases your production capacity but increases the number of mouths to feed so on its own it doesn't take you further forward financially. You can employ subbies but if they are used to support you in your production role you have increased your profit by the difference between the cost of employing the subbie and the additional income you get from the job by using him but there is still a fundamental capacity constraint. The next step up in the business model requires a fundamental change in the method of operation but it also introduces a whole new level of risks. To move beyond the capacity constraints of a sole trader/partner with or without subcontractors the business owner/partners need to change from being do-ers to managers. In this phase the business owner(s) control the sourcing of work, developing business contacts to ensure that the work flow is sustainable and supervise others who actually do the work. The keys to success are combining technical excellence to get the jobs done right and the management skills needed to develop and control a business and manage a workforce. If the reason for forming a partnership is to harness the differing skills of the partners and build a business by employing labour/subcontractors to expand capacity then it could increase the earnings of the partners beyond the level they could earn as sole traders but it takes time and it does introduce a level of risk.

Sorry if I am a bit late responding here but there are a number of issues you need to consider when establishing a partnership. It is not clear whether you intend to carry on doing your own jobs as subbies and use the partnership for joint efforts, but either way the partnership is a separate legal entity and you will need to advise HMRC that you have started a partnership and give details of the partners involved. HMRC will issue the partnership with its own unique tax reference number and you will need to submit a separate partnership tax return. The partnership tax return basically records the revenues and costs of the partnership and has a page for each partner showing their profit share. This info needs to go on the individual tax return of each partner. As for bank accounts, I would strongly recommend opening a separate partnership bank account and using it solely for partnership business transactions. The partners can agree on how to profits are to be divided and drawn from the business bank account. This makes the preparation of accounts simple, it also means that if (when) you get a visit from HMRC they are not presented with a set of bank statements which include dozens of personal expenses. I would also suggest having a formal partnership agreement setting out how decisions are to be made, how profits are to be shared etc.

There is no single or simple answer to retaining staff. Bonuses and share schemes can work but I have also seen schemes that far from incentivising staff have caused division and animosity. Schemes that reward individual achievement can cause friction if someone tends to bag the easy jobs just to boost their bonus. Schemes that treat staff equally can cause issues if one team member is perceived to be skiving but still gets the same bonus. Although cash is important, some of the softer issues can help to retain staff. If the working environment is pleasant, management communicate with staff, flexibility when dealing with personal issues, opportunities for personal development and attention to the usual team building stuff can contribute to staff retention. It is difficult to retain staff if someone offers them a big salary increase. If the working environment is not pleasant then it probably wouldn't take much to persuade someone to leave.

I suspect HMRC would challenge payment of gym fees by the company as not being wholly, exclusively and necessarily for the purposes of the trade and so you would need to be able to demonstrate that is was a genuine business cost. If it was a condition in your company's contracts of employment that because of the nature of the job continuing employment required employees to be physically fit and maintain a certain level of fitness then you may stand a chance of claiming the cost of gym membership was a business cost. However, rather than just claiming gym fees and keeping quiet hoping HMRC didn't ask any questions if you claimed I'd suggest advising HMRC what you have done and why and then be prepared to argue the case with HMRC. Alternatively, if the company pays your gym membership it will appear on your P11d as a benefit in kind and you will pay tax on it and the company will have a national insurance charge also. At least that way the cost to you would be the tax on the benefit rather than paying the full gym membership out of taxed income.

That is the real problem with this judgement because although there may be a few genuine cases, it is only a matter of time before some firm of lawyers are advertising on TV for lard a***s who claim to have been discriminated against at work offering no win no fee service to take action against employers. It is also another example of the unelected EU bureaucrats trying to impose their twisted sense of social justice on sovereign nations.

I agree it is best to recognise that when cash comes in part of it is not yours and belongs to the government. For business start ups and smaller growing businesses (turnover less than £1.35m), accounting for vat on a cash basis (i.e. when you actually receive/pay ) helps because it means you don't have to pay it over until you have received it.

Your position will depend on the terms and conditions of the contract between you and the contractor. If you are employed as a subbie to cut down tree A and you cut down tree B, you could be exposed to a claim for damages for breach of contract. If the main contractor is held responsible by the authorities for any breach of TPO regs then he could add the costs of any fines to his action against you for breach of contract. Of course, if there is no formal written contract then it could get messy if an unscrupulous contractor tries to get a subbie to pay for the contractors own mistake. When accepting work from a contractor it may be worth having a standard clause in your terms and conditions that unless it it is clearly stated in the instructions to you, it is the contractors responsibility to deal with any TPO issues. That should give you some protection (but it won't protect you from negligence if you take down the wrong tree). When faced with a job where a greenhouse could get flattened you could try and restrict your exposure to claims for consequential loss in your terms and conditions or in your acceptance of the contract but I am not sure how effective that would be if your actions leading to the destruction of the greenhouse could be considered negligent.

I have used Windguru for years and found it to be the most accurate after comparing various forecasts with what actually happened. Although it is aimed at sailing and watersports , hence the inclusion of wave heights etc, it also covers inland areas. It is available as a free site although you can subscribe and get access to more information. It predicts the weather in 3 hours segments for the next few days and it has a useful colour coding system so it is easy to see at a glance how windy/wet it will be. Check it out here:- http://www.windguru.cz

OK, so some folk don't know how to light a fire. Isn't that a great opportunity to educate them as to how to do it, to explain what makes good firewood and why some cheap stuff is not worth buying? Yes, it may seem obvious to many but for those that have lived in centrally heated houses and have just acquired a stove then it is a skill they do not have. Giving them the knowledge to get a good fire going is probably a great way of building a relationship with a customer and increasing your chances of repeat business. It is likely to be a much better investment than spending money on leaflets and flyers shoved through a letterbox or an advert in the church magazine.

I thought he was a prince!

I wonder if there is a way of jamming the remote controls signals on those drones.

There are lots of issues when considering starting up including the overall risks associated with the business you are starting. A partnership is one way to do it but don't forget that partnership liabilities are joint and several and, ultimately, are personal liabilities. So if, for whatever reason, you chop down a tree that crushes someones house/greenhouse/car and the business is sued a claimant could pursue any damages claim against any or all of the partners and your personal assets could be at risk. The easy way of avoiding this is to trade through a limited company where, if the worst happens, only the assets of the company are at risk. There are also tax advantages to trading a profitable business through a limited company.

The important thing will be to close off any cavities to stop mice getting in. As others have said a bit of ply with a small hole is needed to keep weather and mice out. While the bees are still flying they will still protect the hive but when it starts to get frosty they contract into a ball and mice and other rodents will get in to eat the honey stores and the colony will starve.

Absolutely correct, but there was a comment above that suggested that someone was unsure whether they were being treated as a sub contractor and deductions were being made. I was trying to establish whether it was under CIS for construction related work or whether the rules were being misapplied / it was a try on.

Have you registered as a CIS sub contractor with HMRC? Contractors are compelled to verify the status of any subbies used. If you are not registered as a CIS subbie then the contractor is likely to be deducting 30% instead of the standard 20% deduction. If CIS deductions are being made from payments made to you, the contractor is obliged to give you a statement showing the tax deducted. I have seen some unscrupulous contractors making deductions but failing to pay the tax over to HMRC which causes a real **** fight when the sub contractor tries to claim for the tax (especially if the work done wasn't really caught by CIS regs).

A UTR number does not prove self employed status, nor that the individual/company pays tax it merely shows that they are on the HMRC's system. Forestry work per se is not caught by the CIS regulations unless that work relates to activity on a building site. There are some types of work that aren't automatically treated as construction operations, but can be in certain situations. For example, tree planting and landscaping aren't construction operations if they're part of estate management or forestry work. But HMRC would treat them as work that's covered by the CIS if they were done in the course of building a new housing development. Involvement in the CIS system introduces a new raft of bureaucracy that contractors and sub contractors have to deal with together with a range of penalties for non compliance. If anyone is likely to be involved with work on construction sites it is worth registering with HMRC in advance as a contractor has to verify the tax status of each subbie and if you are not registered in the CIS scheme, the contractor will be told to make a higher rate (30%) deduction from the labour element of your invoice. The standard deduction rate is 20% although some subbies do qualify for gross payment.

I agree that this may be one of the reasons for the growth in zero hours contracts but the distinction between employed/self employed will turn on the facts of each case. As an example, HMRC will accept that labour only subbies on a building site are indeed self employed even though they may be working under the supervision of the contractor. I agree that self employment has been used by companies to reduce costs and you only have to look at the BBC to see how they pushed highly paid presenters into self employed status! In many respects to claim that a news presenter is self employed is something of a joke when you look at the HMRC tests. Unfortunately HMRC do nothing to dispel the impression that they are strong on the weak but weak on the strong.

The costs you can claim against your employment income will depend on what your contract of employment says, e.g. what equipment you have to provide etc. The company is obliged to issue a written statement of employment particulars within two months of starting. I am intrigued as to why your employer has gone down this route because it can be expensive for them with employers NI, holiday pay, sick pay (possibly), pension contributions and the latent liability in the event of redundancies. I have had some battles with HMRC when they have tried to argue that subbies were really employees but what becomes clear during the "discussions" is that (imho) HMRC run the argument to see how robust the defence is. If a company caves in, HMRC will rub their hands and think of extra employers NIC they will collect. When faced with a rigorous defence demonstrating that the indicators of self employment set out in the HMRC's own documentation (see my earlier post above) are being met, they normally accept defeat and move on.

For what it's worth some of the HMRC guidelines on what constitutes self employment can be found here:- https://www.gov.uk/working-for-yourself/what-counts-as-self-employed It is an area that HMRC is looking at quite closely, particularly in the construction industry where there are a lot of labour only subbies. As for the choice between employed and self employed it depends on your perception of risk. As an employee you have the benefits of a regular salary, holiday pay etc but the downside that you do not control your own destiny. As a self employed you do not have the comfort blanket of a contract of employment but you do control your own destiny and have the opportunity to build something of value that could see you through to retirement and beyond.

The comment about a 6% return is a short term view. Over time as rents increase, the return on investment will increase. Then there is the capital appreciation so the comparison with a 33% margin generating (but depreciating) business asset is a bit like comparing apples with pears. Well managed buy to lets can generate significant returns in the medium/long term for relatively little effort (if you stay out of the student market).

For what its worth, I bought a CL3 with the outboard bowl attachment 3 years ago and I am really pleased with it. I don't have the variable speed upgrade but moving the belt onto a different pulley to change speed is a 10 second job. I have turned some big bowls and small pens on it so it is a versatile machine. I have also found Record to be a good company to deal with.

In some respects creating a web site is the easy bit, getting people to visit it can be a more difficult challenge. Including the web address on all business literature helps but if the idea of the web site is to open new markets, then you need to be creative in how you drive traffic to it. Beware of the sales people that promise to get your site to the top of all search engines because that can be expensive and of little practical value. There are all sorts of ways of improving "brand" awareness but which method is best will depend on your target market. You know what they say about marketing budgets, 50% of the money spent is wasted…..you just don't know which 50%

Billy, I don't think anyone is complaining about his asking price, a vendor has the right to ask for what they want (and good luck to them), but anyone selling a business should expect to be quizzed on what it is they are selling. Anyone buying a business without understanding exactly what they are getting and the associated risks is taking a huge gamble. If, as Tom says, the selling price of firewood is cheap then that is a relevant and valid comment to the assessment of the business not a criticism of the vendor. You only have to look at supermarkets and compare Waitrose with Aldi…both in the same business but with different business models. Integrating a pile 'em high sell 'em cheap operation with a high margin lower volume business is fraught with risk. Anyone with an existing business will doubtless consider the potential benefit of bolting on the web sites and customer base and compare it with the cost of the goodwill (i.e. fresh air) that they are paying for and whether that money would be better invested in organic growth. Advertising a business on ebay is an interesting strategy and I suspect it is aimed at noobs who may not understand the arb world rather than existing operators.

I could write a book on the various ways of valuing a business and strategies for acquisitions and disposals but ultimately a business is worth what someone will pay for it and there is no standard multiple. One curious aspect of this sale concerns the domain names. The advert specifically refers to the sale of "4 websites" and lists 4 domain names including Firewood Bristol supplies Logs, Firewood & Kindling to the Bristol area. There is however,no mention of Firewood Bristol supplies Logs, Firewood & Kindling to the Bristol area (which appears to be owned by the same person and currently points to the .co.uk site) . Similarly, the advert refers to http://www.firewoodlogsbristol.co.uk but there is no mention of http://www.firewoodlogsbristol.com which also points to the .co.uk site I suspect a potential purchaser may , as part of their due diligence, ask why these domains appear to have been excluded from the sale.