Category Archives: General business

Why IR35 reforms moving to the private sector may be positive

Going against the grain, but bear with me on this…I think there are some very real positives if this goes ahead. Ie current expectations that April 2017 changes to public sector IR35 operation start to apply to the private sector at some point (possibly from April 2019) too.

Motives more aligned with the client

An issue with current IR35 enquiries, is that the end client typically has no real interest in it. They don’t care either way, as they have nothing to gain or lose. They may inadvertently say something that “drops the contractor in it”, eg when describing working practices.

Also, long before it gets to that stage, they’re not overly bothered in ensuring the contract or working practices are IR35 friendly. So you have one party wanting it to be outside (you), one party wanting it to be inside (HMRC), and a largely independent client that could help or hinder the arguments of either party.

This would all change if the end client became responsible for the decision, and surely this is a positive thing for the contractor. Going forwards the end client is more likely to work with the contractor, against HMRC, two vs one. Where the end client has something to lose, they’re going to take far more care ensuring contracts and working practices are IR35 friendly, and that they don’t say something daft in an enquiry.


More time, less of a surprise

The public sector had these rule changes thrust on them with very short notice. Nobody knew how to react. This lead to a knee jerk reaction with many (slightly irrationally, and incorrectly) deciding every single contract was inside IR35.

This won’t be the case with the private sector. They’ll have time to:
– carefully consider their options,
– liaise with legal experts around contracts/working practices,
– liaise with insurers and come up with a package for in case HMRC disagree,
– liaise with contractors about how best to proceed.

The private sector won’t be ambushed in a surprise attack like the public sector was.


Risk completely taken away from the contractor

Whilst many contractors wouldn’t like the higher taxes of being inside IR35, for many it’s the not knowing that’s the worst thing. They can trade happily for years, paying what they think is the correct taxes as they believe they’re outside, then way down the line HMRC raise an enquiry. If that goes against the contractor, they can suddenly have to find huge amounts of extra taxes to pay HMRC, from money they’ve already spent.

There are insurers who currently offer to cover some/all of the extra taxes…but going forwards it simply won’t be a risk on the contractor at all. You can sleep soundly, knowing that if things were wrong, it’s the end client that would potentially lose out, not you.


The “losers”

Yes, there will be some contractors who previously treated themselves as outside IR35 (rightly or wrongly), and will now find their clients insisting they’re inside IR35. They would lose out financially, suffering the higher taxes of an employee. Many will then give up their companies and either operate via an umbrella, or as permanent PAYE employees. However, I believe the numbers of these may be more modest than some doom-mongers are predicting. Also these will likely be the type of workers that annoy those who consider themselves “proper contractors”, and realistically if ever challenged on their old practices would have likely failed an IR35 enquiry anyway.


End result

Hopefully the modest number of those “losers” above will be sufficient to make HMRC relatively happy that they’ve “won”, even though I imagine they’ll be disappointed at how low that number is. They’ve then also made it harder for them to challenge other cases as now the clients have motives nicely aligned with the contractor. Plus it would be big corporates with highly paid solicitors they were challenging, rather than the little guy.

End clients will drift towards having two tiers of contractors. Those who are outside IR35, and those who operate via an umbrella or are encouraged to go onto the payroll. The client will need to make sure any in between are shuffled one way or the other and treated appropriately. Everyone will know where they stand, and things will settle into a new equilibrium.

If HMRC do proceed to roll out the same rules to the private sector, will it be far worse than I’m making out? Interested in hearing other people’s views.

Layman guide to confirmation statement and persons of significant control for micro companies

The Companies House “annual return” is no more.  Instead we have the “confirmation statement”.  In many ways it’s similar to what it replaced…so what’s changed?

Persons of significant control (PSC)

There’s lots of big sentences with long words which make this sound much harder than it actually is.  Oversimplifying a little, a PSC is anyone with >25% share ownership in your company.

First thing to say – shareholders aren’t always humans.  I mention this as it’s largely why this section looks complicated.  Shareholders can be either a human being, a corporate body (eg Ltd Co) or what’s known as a “legal person”.  For your typical micro business, it’ll be the first option, “a person with significant control”.

Adding a PSC

We’re adding our first person.  There are quite a few basic details requested.  There is an option to protect the identity of PSCs from the public record.  Reality is the vast majority of business owners won’t be able to do this.

It then asks for your date of birth.  As with details for directors, only the month and year will be publicly available (to go some way towards making life harder for potential ID fraudsters).  It also requests Nationality.

Correspondence address – this will be publicly available.  If you’re concerned about data privacy, you may want to make this somewhere other than your home address.  Having said that, the majority of small Ltd Co owners will use their home address for this.

Home address – your actual home address is separately requested.  This won’t be publicly available.  Your country of residence will be publicly available.

Nature of control

This is where again it can look more complicated than it really is.

Ownership of shares –> The person holds shares, then choose relevant %.  Note that if the person owns exactly 25%, 50%, or 75% they fit into the lower category (ie 50% exactly is “more than 25% but not more than 50% shares”, it’s not “more than 50% but not more than 75% of shares”).

Ownership of voting rights –> The person holds voting rights.  Unless you’ve got a fancy share structure where only some shares hold voting rights (wouldn’t recommend this for a simple micro company) then this will exactly mirror the shares.

Right to appoint or remove the majority of the board of directors.  As suggested earlier assuming it’s a human shareholder, the 2nd and 3rd options aren’t relevant.  It’s just whether the 1st is true or not.  In practice anyone controlling the company (ie >50% shares) can appoint or remove directors.  For micro companies the directors and shareholders are likely to be the same people (or spouses/similar), so this is more a technicality to put on the form rather than something you need to be concerned about.

Has significant influence or control.  (updated 24 Nov 2016) it seems if any of the above boxes have been ticked, this now needs to be left blank.  If you do tick the top option whilst also confirming that the individual holds shares/voting rights etc, the Cos Hse form seems to give an error message.  Simply leave this one blank.  We think it’s only relevant if none of the above more specific reasons apply.

When did this person become a PSC?

Logic might suggest it would either be the date of incorporation, or if it’s someone who only received shares later than that date, the date they went over 25% share ownership.  However, the form will only accept a date on/after 6 April 2016.

I’d therefore suggest you choose 6 April 2016, unless you only obtained your shares after that date.

Rest of form

After that, the rest of the confirmation statement is no different to the annual return.  Check the registered office address is still valid and shareholders match, but otherwise typically just a case of clicking confirm/next half a dozen times then paying a £13 fee to Companies House.

Unpaid share capital – something that confuses a few people. Just enter £0 here, on the basis you will have paid for your share (if not physically putting the £1 or £100 in, it’ll likely have been dealt with via director loan account.

Shortened deadline

Oh…and whilst you had 28 days to file the annual return, you have just 14 days to file the confirmation statement.  Having said that, there was no financial penalty for late filing of an annual return, and the same seems to be true for the confirmation statement.  As with the annual return though, if left too long Companies House will start threatening striking off action.

Why I hate webinars

What is it about webinars that seemingly makes them the new “must use” thing?  They’re rubbish, and here’s why:

Start time

For TV programmes/films, those in power are increasingly realising people don’t want to have to schedule their lives around their favourite programmes.  We want to be able to watch them when we can, fit the programme around our life rather than the other way around.  Hence the success of things like Netflix and iPlayer.

The internet has had this ability for ages.  Youtube is over a decade old.  You can watch a video whenever you want, regardless of what other people are doing.

Webinars are a massive step backwards from this perspective.  You need to book it into your calendar, plan your work/fun activities around it…and hope nothing unexpected/important crops up last minute, as otherwise tough, you’ll miss the webinar.


Yes, the technology is there for webinars to work…but you can guarantee at least a quarter of people meant to be on a given webinar will have tech difficulties.  These will inevitably only be discovered last minute, so whilst you’re ready and waiting bang on the start time, nothing happens for the first 10 minutes as someone has to install a bunch of software updates.

It’s like conference calls.  Phones, whilst getting ever more sophisticated at many things, are seemingly becoming continually worse at actually making/receiving calls.  It can be hard with just two people, but add in a few more and there will be a problem, wasting everyone’s time.

Other people(!)

So, there’s a webinar, where you did remember when it was on, nothing unexpected cropped up last minute, you do log in, and (eventually) all the other users manage to get it working.  Great.

Next thing is after the absolute simplest statement from one of the people hosting it, someone asks a question that’s of no interest to you.  The main focus of the webinar gets sidetracked as it drifts off on a tangent that perhaps just one person wants it to take, frustrating everybody else.

This will likely repeat multiple times over the course of the webinar, often meaning the key thing that you actually wanted to learn about never comes up, as sod’s law it’ll have been 3/4 into the planned timeslot, but stuff over-ran early on meaning it gets left off.


All of the above issues are either directly or indirectly about timing…but there’s one other timing feature not covered by the above.  In a video, you can fast forward the dull bits/bits you don’t need help with.  You can also slow down/replay the bits that interested you/you struggle with.  You can do all this without impacting others…as of course it won’t always be the case that everyone finds the same bit interesting/hard.


So…why do big businesses and public sector organisations insist on using them all the time?  Please, just release a video instead.  The world will be a better place.

What Corbyn can teach small businesses

There seemed to be lots of surprise about Jeremy Corbyn winning the Labour leadership by a landslide.  What happened, and what can we learn from it?

Out of the four candidates, Corbyn had very strong views, many of which differed from what’s currently “the norm” in politics (though some will say they were the norm 35-40 years ago, and failed).  This made him a bit of a Marmite character, you either think he’s brilliant or an idiot.

The other three…well, to the masses, nobody really understood what any of them stood for, or what they’d do differently to the Tories/Ed Milliband.  Quite possibly that’s because the current system is generally very good, so doing nothing beyond minor tweaks is the best route forwards, but that hardly makes you exciting to vote for.

I won’t go into the specific politics involved as it’s outside the scope of this post and I’m not clever enough.  However there’s two relevant things as far as I’m concerned:

  1. Corbyn got 59.5% of the vote, three times as many as second place, with just 19%.  This despite many considering (rightly or wrongly) his opponents were far more credible candidates.
  2. If you believe many pundits, under Corbyn Labour will never get into power, as whilst he might appeal greatly to a minority, he won’t be able to convince the majority (ie inc Tory voters).  There’s concern Labour could become a minor party, fighting for stuff which only a small section of the population want.

Now, if you’re Amazon, or Tesco, the second point is significant.  To appeal to the masses, you need to take great care not to alienate too many people.

However, 99.99% of us don’t run a business anything like Amazon or Tesco.  We run tiny businesses, which even in a small niche will unlikely ever cater to more than 10% of the market we’re in…more likely a fraction of 1%.  Therefore I think we can learn a great deal from Corbyn’s success (or indeed the rise of UKIP/The Greens/SNP in the 2015 general election).

Corbyn’s recent popularity proves it’s seeing something different that people want.  Also having a clear message of what you stand for.  Being asked to vote between seemingly identical candidates or parties (who could really distinguish between Labour/Tory proposed policies last election?), it’s no wonder voter numbers go down.

In politics, the first past the post system means minority parties need to do REALLY well to actually achieve anything.  In the small business world, thankfully, there is nothing like the first past the post system.  Great success can be achieved from only catering to a small section of any market.

So what does this mean for you?

  1. if you want people to be interested in what you do rather than the competition, make sure you’re actually different to your competitors, and be clear about what you offer/stand for.  If you’re just another [accountant/web designer/whatever], no different to all the others, why would anyone be interested.
  2. as small business doesn’t have any kind of first past the post system, only appealing to a small part of the total audience is absolutely fine.  Find a niche you’re passionate about/an expert in.  Far better to really appeal to some of the market, than have the entire market ignore you as nothing special.

In the small business world, be like the minor parties.  Find a niche sector of the market that’s not getting much focus from the big boys and hammer home how you can help.

Power shift from customer to supplier

I’m sure we’ve all heard the adage “the customer’s always right”.  Theory being whilst they might be demanding, possibly even unreasonable from time to time, they are what pay the bills so you have to try your best to keep them happy.

Does this apply anymore?  I’m starting to think not.  I think there’s three main reasons for this.  How new these are I’m not sure, but it seems to increasingly be the case that suppliers call the shots.


Customer lethargy?

This really hits with the big corporates.

We’re all guilty of lethargy as customers here.  We’ll moan about our bank/utility provider, but very rarely change.

We’ve become accustomed to sitting through 20 minutes of “your call is really important to us, please continue to hold” automated messages, before possibly speaking to a human.  We hate it, but don’t expect other suppliers to be any different, so stick with “the devil we know”.

We also know that their price quotes are mostly marketing spin.  You go to some price comparison site, every competitor price is lower than the deal you’re on now…but that’s just because they hook you in on a low deal, then ramp up the price a year later, knowing again that whilst you’ll think about doing something about it, you probably won’t bother.

Unfortunately I don’t think there’s any way to fix this.  Perhaps we are all busier than we used to be, and the belief “they’re all as bad as each other” means we put up with it.

The corporates know this, which is why they put so little effort into customer service.  It sounds like a terrible idea for a small business to not care much about your customers…but for big corporates it seems it’s a rational business decision.

So the end result is the supplier charging you an unreasonably high price, but you as customer do nothing about it.


Simple supply and demand?

We’ve been trying to get a few bits of building/handyman work done over the last few years.  I imagine many people have been in the situation we’ve encountered:

So you need some work done.  You contact 3 builders, expecting 3 quotes, so you can go with the one who you felt comfortable could do the job and price was ok.  Is that what happens?  Not from my experience.

You contact 3.  One won’t respond at all.  One will come round promising the earth but then never be seen/heard from again.  The third, if you’re lucky, will actually give you a quote.

If you actually wanted 3 quotes you’d probably need to contact 10+ builders.

The above is just to get the quote.  You then confirm with the “lucky” builder that you want to press ahead, and struggle to pin them to a date when they can actually start.

Why?  I’m not a builder so don’t know for sure…but I think in the South East it’s perhaps largely a supply/demand issue.  With house prices so ridiculously high, building an extension compares well with the other option of moving to a bigger house.

This applies to far more than just building work, but is perhaps an issue only suffered when dealing with suppliers of a tailor made service, rather than an off the shelf product.

What it means is that it’s all very well being a customer with cash sitting in your pocket, but that doesn’t in itself guarantee you’ll find plenty of suppliers wanting to provide the service you’re after.  Very frustrating situation to be in, especially when all you hear on the news is about massive unemployment etc etc.

Then the work starts, things take longer than expected, cost more than quoted, you don’t get the calls with updates when you were promised…but when you ask around your peers it seems like that’s par for the course.  You therefore end up having little choice but to be grateful for the average service you get.

Only thing I don’t understand is why more suppliers don’t politely decline the work at the outset, rather than string you along with promises they seemingly have no ability to/intention of keeping.


Automation/systemisation reducing flexibility of suppliers?

Possibly this is the only “new” one, though could have started with Henry Ford and his no doubt slightly misquoted “you can have any colour you like, as long as it’s black”.  It’s also one I can sympathise with as a supplier.

For us to remain competitive, we need to be able to systemise things.  This largely means having Maslins clients fit a certain “mould”, so we can:
– have a database help keep track of things for us, like deadlines,
– do searches to easily find all clients who meet a certain criteria for advice purposes,
– ensure we can be on top of any tax changes that impact them (tax legislation is HUGE and constantly changing, so being an expert in every single thing is impossible).

On the MVL Online side it’s even more pronounced.  Clients need to complete an online form, again populating a database, which then has information pulled out into various templates across the lifespan of a liquidation.

This isn’t about providing bad client service, I’d certainly hope it’s about the opposite, ensuring we provide GOOD client service.  Avoiding the risk of over-promise/under-deliver, ensuring things don’t slip through cracks etc etc.

However, what it does mean is when a potential client approaches us, asking whether we can do things a different way to what we normally would, quite often the answer will be unfortunately not.  It’s not practical for us as a business to take on clients of all shapes and sizes, or each with very bespoke needs.

It also sometimes means a client who’d been happy with us to a certain point finds they have to move on.  Fortunately this is normally very amicable, and is typically due to a client becoming “too successful” and outgrowing us.

We’re of course far from the only supplier this applies to.  Indeed it’s more obvious with things like software.  Take a package like FreeAgent.  You can get it for circa £25/month and it’s great.  However, it can’t cater to every possible business.  If it doesn’t cater to yours, you could try to build your own system, but this would cost an absolute fortune in web developer time…alternatively you could of course look around for other “off the shelf” packages that might be better suited.

What you’ll quite often end up finding though is that you as the customer have to “give” in terms of what you want, because what the supplier provides is fixed.  Another example of the customer being a little low in the power rankings.


Interested in what other people think.  Have you been in situations where you as customer have felt very “weak”?  Or examples where you as supplier have got customers jumping through hoops just to give you money?!

Company cars are overrated

Quite a lot of clients ask us about company cars.  Long story short, in our experience it nearly always makes sense to find a modest car sufficient for your needs, often second hand, buying it personally, paying all costs personally, and reclaiming mileage from your Ltd Co for business journeys.

But the car salesman makes company cars sound so appealing

Of course they do, it’s their job.  They want to sell (or lease) you a brand new car now.  Even better if you’ll be trading it in for a newer model in a few years time.  By getting you onto a company car, you’ll find the tax rules potentially further encourage you to get into a cycle of regular replacement.

Two vital things to bear in mind when considering tax on company cars:

1) the benefit in kind tax is based on the car’s list price when new, irrespective of the actual age of the car.

2) the % band based on CO2 emissions keeps moving every year.  This is understandable, as cars get more fuel efficient, the government moves the goal posts to make it harder and harder to get the lowest %.  See here for a table showing rates for the last year or two and the next few years.

Year 1 – The year you get the car it seems great.  Let’s say the car’s list price is £30k, it’s petrol, and has CO2 emissions of 100g/km.  On the day you get it, it’s worth £30k to both you and from a tax perspective, and (based on 2015/16 tax year) you’re taxed on 15% of that value.  Seems a good deal, taxed on £4.5k per year to get usage of brand new car.

Year 2 – The car’s lost its brand new feel, but you’re still paying tax based on £30k, now at 17%.

Year 3 – The car’s starting to get a bit tired, but you’re still paying tax based on £30k, now at 19%.

Year 4 – The car’s worth a fraction of its list price is, but you’re now taxed based on an annual value of 21% of the £30k.  You’re now taxed on £6.3k per year to get usage of a four year old car.  It’s starting to feel very unfair, the tax you’re paying on it increases every year despite the car getting older and older and being worth less and less.

…so what do you do?

Well of course the dealer will suggest the best option is that you trade it in, getting the newest latest model, perhaps £30k again, but due to lower emissions you’re back at the 15% rate or thereabouts…and so it continues, you’re trapped in this cycle.

Alternatively, you continue with the same car owned by the company, as the car still works fine and you don’t need a newer one…but then you’ll continue to see your tax charge increase each year despite the car getting continually older and less valuable.

Your third option would likely be to buy the car outright, and with any luck you can agree a price with the dealer and the tax man so it’s you personally buying the car.  No more ever increasing benefit in kind, and you revert to reclaiming mileage.  This may seem the obviously most appealing option (at least to me?!)…but if that’s the case, why didn’t you just buy the 3 year old car personally in the first place?!


Other reasons to consider:

P11Ds – chances are if you don’t have a company car, you won’t have to do one (obviously check there are no other taxable benefits in kind).  Having a company car means you definitely will.

Fuel – you need to take care over who pays for fuel, you, or the company.  Money will likely need to be reimbursed one way or the other at rates which are regularly changing.  Alternatively you can get the company to pay for all fuel and accept a further hefty benefit in kind charge.

VAT fuel scale charges – if the company pays for fuel, you need to calculate the fuel scale charge to pay over to HMRC in addition to your usual VAT liability.  This is supposed to offset the fact you’ll be reclaiming VAT on all fuel, whilst some will be used for private journeys.

Your plans might change and you want to close the company – so you sign up for a 3 year lease, 1 year later you get offered a brilliant permie role, or emigrate, so want to close your Ltd Co.  You can’t…unless you can agree an early exit fee with the lessor, but that likely won’t come cheap.

So…when you’re looking at the shiny new cars and the salesman tells you what amazing tax breaks you can get by doing it as a company car, ensure you consider all the facts before pressing ahead.

Small office spaces available Tunbridge Wells

Some of you will have heard about “The Old Bakery”, either because you’re a Maslins/MVL Online client or you’ve read tweets/similar about it.  It’s a two storey building, we occupy the first floor, but the ground floor is up for grabs.

Floor plan
Floor plan

It’s currently split into 4 main areas (all measurements approx):

– big lockable room 7.5m x 3.5m
– small lockable room 3.5m x 3.5m
– open area 10.5m x 4.75m
– kitchenette/bathroom area (toilet and shower)
Approximate floor layout to the right.

Location – it’s just off Camden Road, so fairly central (you can be in the RVP in a 2-3 minute walk).

As it’s set back a bit from the main road, it’s quiet, and reasonably well hidden.  This admittedly isn’t great if you’re hoping to pick up passing trade, but is great for those who want to be fairly central but remain reasonably anonymous.

Main space 

Parking – Sadly it doesn’t come with parking, but for drivers there are affordable pay and displays nearby.

Condition – it’s newly refurbished.  Good insulation, brand new central heating and electrics, LED lighting.  We’ve left the “character” floor, which admittedly can have a marmite effect on people.  There are high ceilings and a pretty good amount of natural light.  Shared cable broadband is included, though you can set up your own independent line if you require lots of bandwidth.  There are a handful of wired network points, but it’s anticipated most people will rely on wireless.  Similarly no phone line provided, as anticipated most will rely on mobile and/or VOIP (you might want a dedicated line for this).

Access – you will be able to access the building and your section 24/7…hopefully nobody was thinking this, but in case you were, do be aware it is in a residential area, so late night loud parties are not an option(!)

Prices – these are still tbc, but current plans for prices inclusive of most bills, but possibly not rates (don’t ask…well, do if you like) are:
– big lockable room £500/month
– small lockable room £300/month
– desk in shared space £150/month (anticipating perhaps 6 spots, in no way crammed in)
If comparing to more formal serviced offices, please do look at what they charge extra for.
If someone wishes to sublet the whole place on a fairly long contract, probably looking at £1,000/month.

Lease terms – negotiable.  We anticipate minimal commitment from either side, though if you wish to have a longer term lease, a small discount may be negotiated.  The place is in fairly good condition, and we’d expect you to leave it broadly as you found it.

Furniture – negotiable.  We can probably provide basic office desk/chair if required.  We appreciate those in the open area may also wish to have a lockable chest of drawers/similar for any valuables.

Timing – it’s pretty much ready to go, just the flooring needs a little bit more elbow grease from me.  Having tenants lined up will likely speed me up on this.

If the above’s of interest, please email with any queries.

Why you should go niche in your business

Very few of us will become the next Tesco or Amazon and take over the world.  Given that, becoming the “go to firm” in a small niche can be the key to financial success.

Being a big fish in a small pond gives you multiple benefits:

  1. Expertise – If a plumber approaches you and some general web design competitors, chances are they’ll be impressed by your industry knowledge so more likely to go with you.
  2. Search engines – for a new small business, ranking well for “web designer” is nigh on impossible.  Ranking well for “web designers for plumbers” won’t be.
  3. Less price sensitive – if you’re the expert in your niche, people looking to purchase within your niche will be prepared to pay a bit more for your skills.
  4. Streamlining – you’ll be able to do the work quicker as there’ll be less to learn for each job.  To some extent you can automate or copy/paste certain things.  Obviously take care with this, but again using the example of plumbers, they’ll likely only have a local geographical reach, whilst you can easily have a national reach.  Therefore a plumber in Cornwall shouldn’t be too concerned if another plumber in London/Edinburgh has a similar website.

Bad points? – The main argument against “niching” tends to be that you’re greatly limiting the size of your potential market…but as long as that smaller market is big enough for you to thrive, who cares?!  I have no idea of the stats, but I’m sure for a one person web designer they could make a very healthy living even if they limited themselves to just plumbers.

Expand that niche – Of course if they wanted to expand, they could easily go for electricians or other tradesmen.  I’m sure if marketed to this (larger) niche well, it could generate enough work for a small team to be kept busy.

Maslins has heavily skewed towards FreeAgent using contractors/freelancers.
MVL Online only offers solvent liquidations to cash shell companies (means we can heavily streamline).

“Success”? – In my first paragraph I deliberately said “financial success” rather than “success”.  I know lots of people who have started their own business doing something they absolutely love to do.  They have no dreams of huge growth, but enjoy the variety that each varied new client brings.  They would consider themselves successful, and I’m not arguing with that.

Inevitably the more you niche, the less variety you get in, which for many may mean boredom.  So whether to niche may in part depend on whether you want to enjoy doing a variety of work in your chosen field, or whether you want to build a scalable business with systems and/or staff.