So today I wanted to talk about why a business needs to establish its culture before it can grow it’s team. Lot’s of employee/employer relationships breakdown because they were never a good fit in the first place so it’s important to get this right.
Before you can even start growing your team, you actually need to establish what we call Points of Culture. So a lot of you maybe building up your businesses and you’ll be at a point where you physically just can’t do anymore. Or you might be at a point where you’ve got a few members of your team and you’ve got to keep growing that team to actually expand your business. It’s very important to actually work in a way where you’re leveraging the amount of money your business earns versus per member of staff. So that’s really important as well. But sometimes to grow, you can only leverage things so much. And then eventually, you need to just start building up your team and turning your business into something that runs by itself. So what I wanted to do in this video today is, before you even hire one person, before you even publish a job advert, I wanted to talk about the one thing that your business absolutely has to have in place, before you can do any of that stuff.
So there’s a guy called Brad Sugars. He owns ActionCLUB and he wrote a book called Instant Team Building. And one of the things he says in this book is, he mentions that his own father told him when he was building up his first business, “Brad, you attract the team you deserve.” So what that means is, by attracting the team you deserve, it means your team will only ever be as good as you are. And while they might have different technical specialities, ideally, they’ll be technically better than you in every single way, over time, anyway. But while they all have technical specialties, one thing that you all need to have in common is the culture, having a healthy culture for your business. And what that means is, if you hire based on the culture of your business, that means people, even though they’ll be doing lots of different things in your business, they’ll actually be in a position where they can work together in a good way to achieve an amazing result.
So on our website, what we’ve got is, we’ve got our nine Points of Culture. And a culture is a little bit like values. So a lot of businesses, they do have values, and a culture is almost just going a little bit deeper than those values, and giving a little bit more information about those values. But what I’ll do is, if I just quickly share my screen. Okay, I’m not sure how to do that just at the moment. But the idea behind the Points of Culture is, you can end up with teams where you’ve got one really successful and driven individual, but the problem with that is, sometimes they can be really toxic to the rest of the team.
So essentially, what that means is, if you end up with this high-performing individual who doesn’t support anyone else, who creates a culture in your business where people are afraid for their own roles and start acting selfishly, then the overall impact of having that high performer in your business will be less beneficial than the detrimental impact is bad. Because the rest of your team start acting in a different way, or they start damaging your reputation in different way.
So the whole point of having Points of Culture is, it’s something you can use as part of the interview process. It’s about saying, “This is who we are as a team. This is what we believe in. This is how we expect people to act in certain situations.” And you can then use that to, essentially, be part of your advert, essentially. So when you’re hiring people, you can say to them, “Look, don’t apply if you don’t agree with this culture, because we do test you on it. We do believe in it. We do stick to it.” And that’s one of the things that we’ve always done well. From an early stage, we documented our Points of Culture. So you can go to naccounting.co.uk, and under About Us, we’ve got our Points of Culture. And the idea is, whenever we recruit, we create competency-based interviews as part of the process. And what that’s going to do is not just ask for random things like, “Tell us about a time you helped someone?” What we do is we make sure all the competency-based questions then link back to those specific Points of Culture.
So the idea is, before you even create your job description, before you even send your job description anywhere, before you even work out what that job role should be, it’s about documenting the culture in your business. Because that’s the only way you’re going to attract the right kind of people that support the rest of your team, the right kind of people that give your customers the customer service they’re used to. And also, the right kind of people that will, essentially, look after each other so people don’t feel excluded. They don’t feel uncomfortable in their own business.
And that’s what the whole point of the Points of Culture are. And in fact, even before you hire staff, even when you’re landing clients, even when you’re finding suppliers, the Points of Culture are really relevant for clients and suppliers as well. Because you’ve got to be ready to work with people who want to work in the same way as you do, and who believe in similar things as you do. So the Points of Culture, it’s important that they’re not exclusive to anyone, but it’s also really important that they specify what your business is about. So you only attract the right kind of people.
So by all means, go to our website, have a look at our Points of Culture. ActionCOACH have some good ones on their website. So they’ve got their, I believe it’s 14 Points of Culture now. So if you’ve got some time, have a look at ActionCOACH’s as well. They’re good, but obviously, look at ours. And start building them for your business. Because really, having a written down and solidified culture is hugely important to the growth and, ultimately, the building up of business.
So it’s been great doing this live. If you liked it, remember to subscribe, and like it, and follow. And I’ll be doing plenty more so keep an eye out for them. All right. Thanks. Bye.
Why People Fall Out of Love With Hiring Employees
Hi everyone. It’s Nishi Patel from N-Accounting and in today’s video I want to talk about trivial benefits. There’s a rule within the task world which lets you by your employees’ gifts which are worth no more than 50 pounds at a time. And when you give those employees that gift, that gift does not actually count as a taxable salary.
This can be really good if you want to give them something to say thank you because you can get them something that is worth 50 pounds and then essentially, they don’t get taxed on it. So it’s really better than them just giving them 50 pounds. You can do that for employees who aren’t directors, you can do this as many times as you want in the year as long as it then doesn’t look like you are replacing their remuneration. So it has to be within reason although the HMRC have not specified exactly how many times that is yet. Anything within reason and you can get this employee a 50 pound gift. So if you’re a director watching this, and then you might also be interested to know that your business can actually get you a 50 pound gift as well, and you don’t have to declare it as taxable income.
The one slight difference in rules between employees and directors though is directors when it comes to trivial benefits, they are actually limited to 300 pounds of trivial benefits a year. What that means is your company for example, as a director could get you a 50 pound gift voucher for a particular store and, and then it could get you another five of those vouchers after that. And then that would make up to 300 pounds. One thing you’ve got to remember though as a director and as with anything to do with trivial benefits is if you get let’s say two 50 pounds, August vouchers, HMRC when they are working out will actually combine them to make a hundred pound voucher. And that will no longer be allowable as part of the trivial benefits rules. So if your plan is to buy like six vouchers for various stores it’s really important that they are different stores within that year and not the same store, otherwise it’ll look like one big purchase where you have the whole thing being disallowed and you will get taxed on it.
So what I want to get across is that trivial benefits if you are not using your allowances for them as a director and even if you are not planning to do it as a director, you want to get your employees something nice. It can be a great way to motivate your team just by getting them those gifts. Especially if there is something they particularly want and you can get it for them as a thank you for some hard work although not a replacement for their salary. Then it’s really worth using it. Cause you’ll save money as an employer, your employees will save money. And as a director it’s a great way to get something out of your business without having to pay salary and dividend taxes as well. So definitely yeah, definitely worth looking at. So if you want to find out more about trivial benefits or any other tax savings and profitability improvements within your business then get in touch, book yourself in for a free strategy session. I would love to explain how we can help you more as your accountants and learn more about what you want to do with your business.
What Is HMRC’s Take On Hiring Self-Employed Workers?
Small businesses, especially start-ups prefer to hire self-employed workers instead of permanent employees. This is mainly because they can save a lot when it comes to taxes and employment rights that only employees are entitled to as per HMRC.
Though self-employed workers charge a comparatively higher amount than a regular employee, it could still turn out to be an expensive affair for any business. A business should never fall for this as there are countless risks involved in hiring a self-employed worker.
Not to mention, HMRC is also on a constant lookout for companies who take on self-employed workers solely to save taxes. This doesn’t mean that you shouldn’t hire one, but you have to be legal in your business conduct and provide HMRC with their employment status beforehand.
However, there are some guidelines published by HMRC which helps businesses find out whether someone who works for them should be treated as an employee or as a self-employed person. Also, the total revenue of a company will decide whether self-employed workers should be considered as employees or not.
How HMRC Will Decide A Self-Employed Worker Should Be An Employee?
Depending on how you work with self-employed workers, HMRC will look for certain factors to find whether they are your employees or not.
These factors are:
- Working with a self-employed person without a written contract.
- You’re paying them at a weekly, hourly or daily rate.
- The self-employed person has all rights and responsibilities of an employee.
- The self-employed person has an active portfolio with your clients only.
All these factors will ensure that these workers are your employees, and not self-employed personnel. But, they have to pay more tax as employees and if somehow they’re not paying the required taxes, then you as an employer will be responsible for paying their tax and resulting penalties.
People That HMRC Pick For Investigation?
HMRC targets specific organisation for the investigation on the basis of yearly revenue. By analysing the monthly returns of a year, HMRC can ‘data mine’ submissions in real-time looking for ‘hallmarks of employment’, such as:
- Self-employed person having only one client or employer.
- Self-employed person receiving regular fixed amount from the employer.
- A self-employed person not paying any other self-employed worker.
If HMRC finds any organisation working with these kinds of self-employed workers, then it becomes a subject for HMRC investigation.
Cost of Converting Your Self-Employed Workers Into Employees
Converting your self-employed workers can cost you much as the overall payroll of the company will be increased by 28% to 40%. There will be many costs involved in it some of which are:
- Insurance costs of employees
- Holiday pay
- Additional costs for dealing with PAYE and employment rights legislation
- Costs of paternity and maternity leaves and much more.
This is an overall estimate of the increased payroll which you will have to pay after converting your self-employed workers into employees.
What Is The Alternative For It?
Yes, there is an alternate option to save yourself from being a target of HMRC and reduce the payroll of your company if you outsource your self-employed workers to an intermediate contractor.
How Safe It Is To Use An Intermediate?
Every solution provider is not equal as compared to others in any industry. It is entirely safe to take advice from a reputable, audited and compliant contractor who has already dealt with HMRC.