[jonboywalton75]

The thing is, without generalising too much, JW's are usually pretty honest and hard working, Eastern Europeans/JW is a double Whammy

By omission us non JW's and non Eastern Europeans are not honest and hardworking ? 

Hey Mike
As a true scouser I'd trust you with my wife/wallet any day😱😱😱😱

[Smudger]

EMPLOYMENT: According to my accountant there are 8 criteria the authorities use to define if someone is employed.

The most important 3 are:

Does X have an obligation to supply work?
Direct Control / Supervision?
Own Tools

There is a new test that the revenue has set up  online that helps you to define if you are an employer or not.....

I make sure that the max days they work are 4, so they have time to do their own work.

VAT
June 2018 to May 2019 I'm over the VAT limit for the first time. You need to be over for 12 consecutive months to be liable for VAT. So I'm looking at a 10-13% VAT bill minus what I can claim back. Not great, and a real schoolboy error on my part to be getting this bill....

 This is what my accountant writes about the VAT issue. It is from a Linked In Thread:

•   Hi Oliver, I have done a little research into your VAT question. I understand how you have interpreted the VAT Notice on taxi companies acting as agents for drivers, however this is a very specific area hence the dedicated VAT Notice. There isn't a similar one for window cleaning, nor general cleaning.   A couple of considerations: Does your business receive payment for the cleaning and then pay the workers their invoices? Or alternatively, do the workers receive the pay directly and your business charges them a percentage or set amount for each business referral?   Self-employed taxi drivers and taxi companies typically acting as agents operate the latter. The taxi driver takes the fares but pays a rental for things like the radio and a royalty per lead/collection they are given. They may also pay a monthly retainer fee.   Unless you operate a similar model to this I think you/your accountant would struggle to present a strong case to HMRC if the turnover of the business exceeds the VAT threshold.   I would suggest writing to HMRC (you or your accountant could do this to present your case) to get clearance in writing.     I hope this helps. My personal opinion would be to maintain the residential business but grow a VAT registered Commercial business also (separate business and ownership structure). Approach clients on business parks, find out where new developments are springing up who wouldn't already have window cleaning facilities in place.     Have a great weekend.    Kind regards


Oliver james  12:18 PM
Here is what I'm proposing with respect to the VAT. 1. Pay VAT bill from when we went over the threshold. 2. Going forward: GoCardless (the direct debit providers) transfer money daily into a separate account of ours that's used for nothing else.  Once a week, we check our software for the amounts collected per partner and that amount is transferred to the partner  We invoice the partners at the end of the month. Because the money passes through one of our accounts we clarify on every invoice to the partners that we are acting as agents in collecting the cash.  We collect payments centrally acting as agents for our partners. The fact that we're acting as agents is stated on every single invoice we produce. The partners pay their partner fees separately. The money from Go Cardless is never ours and VAT doesn't enter into it. What are your thoughts? Oliver

Accountant  2:42 PM
Hi Oliver, 1) Have you exceeded the VAT threshold in the last cumulative 12 months? If so, have you registered for VAT? You normally receive a grace period of 1 month (but check the effective date for VAT) and then you must start charging VAT. So if you only exceeded the VAT threshold last month, you would register this month and then from the effective date (probably 1st of next month) begin charging VAT. 2) You are changing the method of business by acting as an agent for identifying and distributing work/jobs to sub-contractors and collecting payment on their behalf. All monies collected are transferred to your partners either a) less a monthly finders fee or b) you charge them a monthly flat fee or fee per completed job for the work they do.
•   I think you would have a strong case should HMRC contest your reasoning to demonstrate that you are acting as an agent in a similar way that a taxi company does.
•   MAY 24Oliver james sent the following message at 1:35 PM
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Oliver james

Oliver james  1:35 PM
Thank you for your expertise on this, much appreciated.  Enjoy the bank holiday weekend!
•   Accountant Accountant sent the following message at 2:02 PM
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Accountant Accountant

Accountant Accountant  2:02 PM
You too, Oliver

There is a  thread on CIU discussing this, you need to scroll to the second page to get the entire story.

http://www.cleanitup.co.uk/smf/index.php?topic=212994.20

nice thread - very refreshing but please be aware of the following - If the total of your turnover over the last 12 months exceeds £85,000 at any point, you’ll need to register for VAT.

if you share ANYTHING - premises - pens computer - van - tools you will not be accepted as 2 different business entities by the VAT man

In the answer from your accountant - he's not even aware of your position regarding VAT - he should know if your over the threshold or not - and note 'I think YOU would have a strong case - he will wash his hands as soon as the VAT man knocks on your door - YOU carry the can

Darran

[Smudger]

Yes, I feel fortunate to have them on board.

They make sometimes make mistakes, just like everyone else. But the difference between working with them and the people I employed previously is like night and day. It has been a game changer working with them.

They rarely take holidays, and in one year, I've only had them not turn up for work once (and that was because of the van being broken down).

Furthermore, they are real grafters. Last month one of them had a day that included gutter vacuuming and he billed £670 in a day!

As founding members of the front line team, they are on a special deal, they just pay 25% fee, and no monthly fee.

Future team members will pay £30 a month, and 30%.

oh how I love a little todger waving - on your prices thats barely above what would be expected on a normal days work.
many on here have hit those levels depending how the work load falls - we charge about 1/3rd of what you charge  depending on whether its 4 or 8 weekly - yet my guys are bringing in 2/3rds of what yours are but 5 days week - not a single day or a couple of days a week

I notice your trying to imply they are self employed - yet they are partners ? so what are they - self employed or partners - you think your dodging paying VAT by claiming they can refuse work while stating they will ONLY be given a maximum of four days to ALLOW them to work else where - one contradicts the other don't you think

Darran

[Stoots]

Like others have said be very carefull with what you are proposing that you are not doing things unlawfully with regards VAT avoidance and employment law.

It sounds very close to the wire, you should certainly look for clarification from HRMC.

Don't trust accountants solely, my accountant has told me some right rubbish in the past....they don't know everything. When I went ltd then didn't tell I needed to do anything specific, I found through research I should have done some things I hadn't.

I would Google the hell out it and if anything seems a bit dodgy put it to your accountant, get another opinion and of it doubt put it to HRMC.

The advice of just seperating the business into domestic and commercial is horrible. Yes it can be done but like Darren points out it would be almost impossible and needs a compete seperaration of EVERYTHING. Just the fact you are a director of both would lead to an investigation. If a domestic customer says oh I've got a commercial premises I would like cleaning..they've got you...share a pen or a laptop theyve got you. I wouldnt even take a dump in the same toilet or use the same pot roll.

[Phil J]

Why don't you stop the smoke and mirrors BS and just hire them legitimately, end of story!

[Oliver James]

Yes, you are right that accountants leave it to the business owners to carry the can.

They will not commit either way and they very carefully word everything so they are covered.

We are over for the past 12 months and we pay VAT on that. However, going forward, the business model changes, so that I'm acting as agent, and we will be a limited company soon as well....

I've spoken to 4 accountants on this and they are all prepared to give advice and hints and suggestions, but none of the will actually commit - they leave you to carry the can.

We are 100% Go Cardless, and it is both a blessing and a curse, because a few years ago, the team members would be collecting most of the cash/cheques.

Go Cardless allows businesses like ours to process payments at volume for very little costs, and the effect is that it has created new "grey areas" like this....

One accountant advises me to write on every payments slip: "Your window cleaning contractor is XYZ and payment will be collected by Oliver James acting as agent for collecting payment".  And every invoice to the contractor will clearly states: Oliver James is acting as agent for collecting the cash.

Agree that seperate businesses is not the way forward (for me anyway). I would consider it if I had a passion for commercial work, but our core business is high end residential, and I don't want to lose operational focus.

You are right that some accountants talk tosh. One accountant I spoke to in my first year advised me to put my wife on the payroll, which would have been a good idea if she wasn't working full time, and then he said something about their being no risk in window cleaning, his actual words were: "It's not like anyone is going to die...."

Why don't I just employ? I've considered it, but it is a right proper headache, until you get to the size of a company like Lee's, where your company is big enough to get people to manage the team for you.

The other issue is work quality. We are a high end residential window cleaning company. With employees, it can be a real struggle to get the work done properly, you just need to look at the reviews Lee is getting on google business to see the challenges.  My take on it is that IF you are dealing with experienced, and often very talented window cleaners, it is just so much more viable to offer a premium service.

It is very difficult to get decent employees, you really need to offer them something, like very good money, or an amazing work /life balance.  And you need to create a company culture that nurtures and supports excellence. Maybe one day...

[deeege]

Team member
Agents
Partners
Core Business
High end residential
Company culture that supports excellence

Maybe worth asking Nathan if he could simplify things a bit for you.