Business Is Business

What happens when your business reaches that next stage and you have to decide whether or not to employ additional staff or consolidate your work load.

For me, I’m afraid I’m a bit of scaredy cat when it comes to not wanting to have responsibility for others.  I have enough to cope with looking after my family and that’s the way I want to keep it.

My line of work can change from month to month.  One minute you are riding high with lots of clients, the next you’ve lost some revenue and are struggling to make the payroll.

I do not want to have to make someone redundant, especially in this current economic climate, I’ve been there and its not a nice place.

I know that one day I will have to employee someone if my business keeps growing but for now I’ve decided to consolidate.

I’ve restructured my client base so that everyone gets an even bite of the apple and this has meant parting company with a couple of clients and that’s not an easy decision either.

However, things were amicable and I’ve told them I’m happy to help with any transition or internal staff training.

Never the less, sometimes you have to cut back in order to grow and as weird as that seems, I now see the logic to it.


National Minimum Wage Update

Just in case you have been binding in a cave lately, the National Minimum Wage levels increased with effect from the 1st October 2012.

£6.19 – the main rate for workers aged 21 and over
£4.98 – the 18-20 rate
£3.68 – the 16-17 rate for workers above school leaving age but under 18
£2.65 – the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship

If you are of compulsory school age you are not entitled to the NMW. Some of your other employment rights are also different.

Student Employees

Student employees

If you employ a student at any time other than their normal holiday periods (or if a student works for you both during and outside their holidays), then you should operate the normal PAYE (Pay As You Earn) procedures used for any other employee.

But if you employ a student solely during their summer, winter or Easter holidays, you may be able to pay them without having to deduct PAYE tax.

In most instances, National Insurance contributions (NICs) will still have to be deducted.

Important updates and changes

From 6 April 2013, Form P38(S) will be withdrawn and students will be treated in the same way as all other employees for PAYE tax and NICs purposes regardless of when they work for you.

The processes described here will be different after you start to send PAYE information in real time. This might be a good time for you to familiarise yourself with any changes so that you are ready to operate PAYE in real time.

Real Time Information Update

Scope expands for Real Time Information pilot

The Real Time Information (RTI) pilot is on track and going well. It is early days and we are cautiously optimistic.

HM Revenue & Customs (HMRC) can confirm that they are on track to expand the RTI pilot in two further stages as previously announced in our press release of 11 April. HMRC also remain on track for all micro, small and medium-sized employers and most large employers and payroll bureaux to begin sending payroll information to HMRC in real time in April 2013, and for all employers to be routinely reporting PAYE in real time from October 2013.

HMRC will be contacting some of the largest employers and payroll bureau shortly to discuss opportunities for them to start reporting PAYE in real time early to avoid end-of-year reporting for 2012-13.

Scope for joining the 2012-13 pilot widens

As a result of the success of the early pilot stage, a number of pilot developers have asked us if they can bring more products into the pilot and some non-pilot developers have asked if they can join.

HMRC can confirm that they will allow further products/providers into the pilot from November 2012.

HMRC have also agreed to allow:

new PAYE schemes which are set up after November 2012
existing employers who in 2012-13 either become clients of pilot software providers, bureaux or agents or whose provider etc makes pilot software available for RTI
to start sending PAYE information in real time from November 2012 as part of the pilot
New PAYE schemes set up from November 2012 should start submitting RTI from the time they register the scheme where the employer/pension provider uses RTI enabled software or HMRC’s Basic PAYE Tools. This will enable them to start operating PAYE in real time from the outset rather than having to operate the current PAYE system for the first few months they are in business, only to then change to reporting in real time in April 2013.

Existing employers who change to a software provider using RTI pilot software or services should start reporting PAYE in real time from the time they change.

National Minimum Wage Update

Important updates and changes

The Department for Business, Innovation & Skills has announced the national minimum wage rates from 1 October 2012:

the main adult rate (for workers 21 and over) will increase by 11p to £6.19 an hour

the rate for 18-20 year olds will remain at £4.98 an hour

the rate for 16-17 year olds will remain at £3.68 an hour

the rate for apprentices will increase by 5p to £2.65 an hour

Gift Aid News

The Small Charitable Donations Bill and Gift Aid Small Donations Scheme

The Small Charitable Donations Bill was introduced to Parliament on 21 June. The Bill will legislate the Gift Aid Small Donations Scheme (GASDS) which was announced at Budget 2011 and will be implemented from 6 April 2013.

The GASDS will enable eligible charities and Community Amateur Sports Clubs to claim Gift Aid style top-up payments on small cash donations without requiring the donor to provide a Gift Aid declaration.

The Bill and explanatory notes are published on the Parliament website.

A consultation on the GASDS was held in the spring and a summary of responses to that consultation and an impact assessment on the GASDS (PDF 72K) are now available.

Employer Pension Auto Enrolment

Pensions – the latest on auto-enrolment
Pensions auto-enrolment is coming, and being ready to comply before its introduction on 1 October 2012 is vital for all businesses in the UK. Understanding what your duties are as an employer can help you prepare for auto enrolment.

What is auto-enrolment?
Auto-enrolment will mean qualifying employees will need to be automatically enrolled into a pension scheme without any active decision on their part. At present, many workers fail to take up valuable pension benefits because they don’t make an application to join their employer’s scheme. Auto-enrolment is meant to overcome this and all eligible workers will have to be auto-enrolled into a qualifying pension scheme.

What does auto-enrolment mean for businesses?
Business who employ eligible workers will need to enrol their employees into a pension scheme that both the employer and the employee contribute to. The scheme must provide auto-enrolment for all eligible workers and all new workers when they become eligible. Each qualifying pension scheme must meet minimum standards in respect of the choice of investment fund and the level of contributions.

Employers can choose the pension scheme they use, which could include the National Employment Savings Trust (NEST) or Sage Pensions (provided by mercer-elect) pension plans designed exclusively for smaller businesses.

The timings
The new employer duties are planned to start from 1 October 2012, however they will be staged over 4 years so the process can be managed more effectively and smaller businesses have time to prepare.

The Pension Regulator will write to all employers around 12 months before their staging date so that they know when they have to automatically enrol their employees. Then three months before the employer’s staging date the Regulator will write again to remind them of the new duties and the need to register.

The UK’s largest employers will be affected first and will need to be compliant by October 2012. However, smaller organisations have more time.

For businesses with under 250 employees, the staging dates will fall over the period from 2014 to 2016. Many businesses are looking to implement qualifying plans sooner, recognising how positively early adoption is likely to be received by their workforce as well as avoiding the anticipated deluge around the staging dates and helping them to control costs by phasing in the contributions.

source: SAGE UK

Holiday Pay And Overtime

I read the following article in the legal section of the FSB magazine – First Voice:

Q. We provide statutory minimum annual leave entitlement for our employees in accordance with the Working Time Regulations 1998 (ie. 5.6 weeks). They work a contractual 40hr week and are therefore paid for 40hrs for each weeks annual leave. One employee has now said a that we should be taking into account overtime payments when calculating holiday pay. Our employees don’t work regular overtime, but are asked to do so at peak periods. What’s the legal position.

A. Holiday pay is based on the statutory definition of a “weeks pay” – the amount a worker would expect to earn in a week.

For workers whose pay varies from week to week, it is their average weekly earnings over the 12 week period ending immediately before theirs holiday begin.

A week’s pay for a salaried worker is generally their annual salary divided by 52.

In your employees case, as overtime hours do not form part of normal working hours, overtime payments do not normally need to be taken into account when calculating holiday pay.

The exception is where overtime is both a contractual entitlement and a requirement, ie. where you are contractually bound to provide a specified number of overtime hours to your employee, and which they are required to work. In that case, the overtime hours effectively become part of normal working hours, as thy are contractual on both side.

If you have any doubts about your employment rights either as an employer and wan to play fair with your employees. Then contact an employment law specialist who will advise you on what to put in you contracts to the benefit of both parties.

Would You Use A Home-based Business?

In an economy that is generating more and more self employed entrepreneurs, the are a lot of businesses that home-based.

Does this make them inferior and are you less likely to use their services?

As someone who works from home I can fully appreciate that clients may be concerned about the lack of an office for meetings, or they fact that my five year old daughter shares my “office space”.

But consider this:

1. Despite working from home there is complete confidentiality and I keep my work life and home life totally separate.

2. Yes clients might feel awkward about meeting me in my home form time to time but then they are not charged for providing a nice office space or meeting room.

3. Working from home allows me the flexibility to vary my working hours and yes I will admit that n more than one occasion have worked 7 days a week and sometimes into the wee small hours, normally to meet a deadline. Would I do this if I had to commute to and from the office.

4. My clients also have the flexibility of being able to pop in anytime as the office does not close at the weekend and if they need to drop something off, then there is always someone at home.

5. The obvious benefit is cost. As I already pay my homes running costs, not all of this gets past onto the client. Tis means I can keep my fees down to an “affordable” level and this has proven popular with all my clients.

Working from home does not mean you get any lesser service. I remain profesSional whether I am wearing a suit and working in an office, or wearing joggers and working from my spare room. My professionalism does not change just because the venue changes.

So the next time you are enquiring about a service from someone and they’re say that they say that they work from home, don the be put off.

Imagine what would have happened if this attitude was adopted when dealing with the likes of :

Facebook – started in a Harvard Dorm Room.

Google – started in a garage.

eBay – in someone’s living room.

Or the thousands of other successful businesses that started in a back room so they could save money but provide a first rate service.

Business Recommendations

Why is it that we recommend other businesses?

Do we do for financial gain?  Do we do it as a favour to a mate? Or do we do it to help businesses in general,help each other?

For me I do it for two main reasons:

  • To help my clients gain access to a wealth of business resources that will in turn help them develop their business.


  • To help advertise businesses that are actually good at what they do and offer value for money.

I don’t expect any financial reward or do it to as a favour.  I do it because I know what they can offer and hopefully by being a middleman, I can help two other businesses grow and develop.

Just as a taster, here are a few businesses that I have worked with and used over the years, and offer great value for money and service:


    • – excellent IT support from an Edinburgh based company that has grown over the years.  They offer a wide range of services and can tailor a program to suit all pockets and budgets.
  •,uk – a small company that have grown dramatically over the years.  Based in Crossgates, Fife, they are experts in all sorts of vehicle and other signage.