ASSOCIATION NEWS REDUCING THE RISK
OF NON-PAYMENT THE FIRST, AND most crucial step to avoid being left out of pocket is to make sure you have a written contract that has been accepted by the customer/contractor, preferably signed by them. That should not only set out what you are going to provide, when and for what price, but should (where possible) also incorporate sufficient terms and conditions to protect your position. But before you agree to that contract, make sure you
understand its terms and conditions where you will be contracting on the other party’s terms (so usually this will be a subcontractor scenario), particularly regarding payment. For those members working for contractors, it is not uncommon for larger contractors to have quite strict terms concerning the timing of applications for payment, and when changes (variations) and claims for delay have to be notified to them. In some cases, such terms will state that if a claim for, say, delay, is not notified within a specified period, you lose the right to claim an extension of time and/or more money. It is worth checking your own contract terms –
When were they last reviewed? Do they comply with current legislation? Even more importantly, do they adequately protect your position? Make sure you comply with the terms of the
contract. If a date has to be changed, get that agreed with the customer, and confirm it in writing. If there are changes to your works/goods to be provided, these should be confirmed in writing, together with the agreed cost of the changes on an item by item basis where possible. Consider getting payment by instalments, and/or
payment of a lump sum up front. This reduces the impact of any later non-payment. However, realistically an upfront payment from a main contractor is likely to be difficult to get. If you are delayed or disrupted by the customer or
contractor, inform them of this in writing at the time. Explain any delay that has been caused to the project, and any increased costs. Monitor any non-payment and take action sooner rather than later. Do not let a large debt build up. If non-payment continues, consider serving a notice
of intention to suspend your work/services, provided this right forms part of your contract. This can be a powerful tool to obtain payment. However, you need to be sure that you are owed the money. If you wrongly suspend your works/services this is a serious breach of contract, exposing you to a claim for damages. The right to suspend can either be an express term
of your contract, or it may be implied into the contract as a matter of law. Under the Construction Act (as it is commonly called), where your contract is with a contractor, then generally you will have the right to suspend, though there are some exceptions. But if your contract is directly with a residential homeowner for work to their home, then you would only have the right to suspend if that is an express term of your contract.
Stuart Thwaites, Legal Director
Advice from our Associates
DON’T MAKE CHRISTMAS TAXING
IT’S THAT TIME of year again. Mariah Carey has been crooning since October, you’re already sick of mince pies but most of all, everyone is eagerly anticipating the office Christmas party. Whether your staff spend most of the party trying to avoid cuddles from Colin in Accounts or dancing on the tables, as an employer, make sure you aren’t on the naughty list by making sure you know the tax implications of throwing your staff an annual bash. You could be mistaken for thinking there are no tax implications, but strictly speaking, if you are providing your staff
with free turkey, paper hats from a Christmas cracker and a couple of glasses of something fizzy, those staff members are obtaining the benefit of free Christmas trimmings by reason of their employment. For humbug tax inspectors, this could be construed as a benefit in kind which ought to be included on employees’ P11D forms, and upon which they ought to pay income tax. Fortunately, however, there is some seasonal goodwill. Where the cost, to the employer, of providing a staff function
falls below the de minimis limit of £150 per head (not per staff member), HMRC accept there is no benefit in kind and everyone can simply enjoy their Christmas tipple free of the fear of repercussions. Other than those deriving directly as a result of too much Christmas tipple, of course. A point to note: The £150 is a limit on annual events open to all employees, so if you take your staff out for free
more than once a year, such as a summer barbecue, make sure you don’t overspend the limit in any given tax year. Finally, if you are the kind of generous employer who also likes to give your employees Christmas gifts, the good
news is that you can do so tax-free provided they are classed as a ‘trivial benefit’. This has nothing to do with board games containing pie-shaped pieces, but so long as the gift isn’t cash or a cash voucher (gift vouchers are fine), cost you less than £50 to provide and isn’t either contractual or a performance reward, you are good to gift.
Claire Purbhoo ACA, Partner
5 NEW YEAR’S RESOLUTIONS FOR SELF-EMPLOYED DECORATORS
ASIDE FROM DIET plans and the January gym membership, New Year’s resolutions can also extend to our finances. Taxes though, don’t have to be a sore spot if we change how they’re tackled. As you draft up those resolutions, be sure to include some of the following advice...
Streamline your finances – We can’t avoid tax entirely, but we can look to reduce our taxable income, you need to consider topping up your pension pot to reduce your tax bill; there are so many ways to streamline your earnings while staying on the right side of HMRC. It’s simply a case of knowing where to save.
Understand what expenses you’re entitled to – Anyone who completes a Self-Assessment has the potential to reduce their tax bill by getting savvy on what is eligible for relief with HMRC. There are countless costs that you can claim, depending on the nature of your earnings. The GoSimpleTax App can help ensure you don’t miss out.
Keep personal expenses separate – There are harsh penalties for anyone who mixes up eligible tax breaks with those outside of the boundaries. For this reason, it’s wise to keep your non-PAYE earnings and outgoings in a separate account to prevent confusion. That way, you won’t have to waste time sifting through bank statements to distinguish between personal and professional finances.
Say ‘goodbye’ to paper receipts – Don’t let scattered, laboriously compiled receipts cause headaches over the next 12 months. Going digital can help you track what you’re spending, store the evidence, and log this on your Self-Assessment. The best tools are powered by the Cloud – this means you can use your smartphone or tablet to upload receipts from your camera.
Go Online to Make your Tax Return – In the past, an accountant was crucial to making your funds watertight. It’s now easy to do this yourself by keying in your information to GoSimpleTax. The New Year brings taxpayers across the UK a chance to take a fresh look at their finances. By exploring the latest digital tricks, and growing your knowledge of where money can be saved, you can ensure that 2020 is your best year yet.
The GoSimpleTax App gives you an accurate picture of your income and expenditure, while guiding you on how
your Self-Assessment should be composed. Plans start at just £30 per annum and best of all,
www.wrighthassall.co.uk 10
as a PDA Member you can claim a 15% discount after sign up! Visit
www.gosimpletax.com/discount
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