HR – Second job for your employees?

A client phoned me after hearing two members of staff talking about running a business in the evenings. My client thinks this won’t be in the same industry but he’s a bit worried about it and doesn’t know if he should say anything to the employee.  Not being an HR person, I turned to Taxwise for advice.

Having a second role, or a “side hustle”, is becoming increasingly common among employees, particularly with millennials. Second roles are usually for making extra money, in addition to the salary received from the individual’s main role, whilst exploring a passion or talent. Research by GoDaddy has recently found that a fifth of workers are thinking about starting a side hustle over the next two years so your clients may find themselves considering this again in the future.

Whilst your client’s employees may feel that they should keep their second role quiet, it is important for your client to know that they are undertaking additional work as this will affect their duties owed under working time rules. Having an express rule in the employee’s terms, or within the employment handbook, that employees should notify their manager when carrying out additional work will allow your client to manage rest periods and other breaks. We have this in our contracts!

Research has also found that employees do not tell their main employer about their second role because they fear they won’t be supported. Having a supportive employer that understands employees have passions outside of work will create a more engaged, loyal and positive workforce; in turn, increasing productivity and retention in your client’s business.

Your client needs to be aware of the likelihood of their employees setting up a competing business in their own time. Although there is an implied term of fidelity in all employment contracts, your client may wish to include a specific non-competition clause or policy which sets out what their employees should and shouldn’t do in relating to competing activities. Rules around conflicts of interest and the use of confidential information will also be important to ensure their employees are not accessing confidential data for their own purposes.  Again we have this in our contracts!

If the employee’s second role is successful, they may find themselves in a position where they can leave their main role and takes this up on a full-time basis. In these situations, your client should ensure they have well-drafted restrictive covenants in place which will protect their business. Non-solicitation and non-poaching clauses will be important where the leaving employee has built up good relationships with colleagues and clients of your business. Where any action is taken that breaches these restrictions, your client can challenge this.


Your personal development strategy begins and ends with you. You need to make the time to develop your skills in order to stay up to date. Otherwise you could be left behind in today’s ever-evolving business world.

Benchmark your skills

You should benchmark your skills at least once a year. To do this properly, you need to be very honest with yourself. What skills and capabilities are required of good people in your role and in your industry? Are your skills and competencies up to date and sought after? If not, maybe you need to update some areas of your skill set.

Create a plan

Creating a personal development plan helps to structure your thinking. Your plan should start with a definition of what is important to you and should outline what you want to achieve, the areas where you need to improve and the reasons why you need to improve these.

Make time and space for personal development

Make your own development a priority. This requires time so start by allocating an hour, twice a week, in your schedule. If the office is too busy, find a quiet space or meeting room where you can focus on achieving your personal development objectives.

Learn from others

Experience is often the best teacher. You don’t have enough time to make all the mistakes yourself and learn from them so you might as well learn from the mistakes of others. It may be useful to think about business people or even celebrities that you respect and look up to. Try to identify some of the skills that they possess and consider how you could go about acquiring those skills. For example, if you want to learn to present like Steve Jobs, maybe you need to sign up to a presentation skills course.

HR – When the clocks go back…

Some of my clients run a night shift over the weekend. Is there anything they need to know about the clocks going back on Sunday?

Daylight Saving Time is coming to an end on Sunday 27th October and the clocks will go back an hour at 2 am. Although many people will be tucked up in bed at this time, there are those who will be part way through their night shift, or who are scheduled to work on Sunday morning.

The clocks going back affects working hours and pay. Our clients should check their employees’ contracts to see what they say about this. A contract which states the employees’ shift starts at 12 am and finishes at 8 am will require the employee to work a shift of nine hours, whereas a contract which says the shift lasts for eight hours starting from 12 am will allow the employee to leave at 7 am as they will have worked eight hours. It is possible to agree with the employee that they will work an extra hour and leave at their normal finishing time.

In relation to pay, a contract that states the worker is entitled to hourly pay for every hour worked means they will be paid extra if they work the extra hour. Generally, salaried workers will receive their normal salary regardless of whether they work extra, although the client’s overtime rules will need to be looked at. The salaried worker still needs to receive minimum wage for this period so, if they are paid National Minimum or Living Wage or just above, they may have to be paid the extra hour to receive their legal minimum entitlement.

Our clients can choose how they treat the extra hour, subject to any contractual entitlements, but should act consistently and fairly. Generally, if they require staff to work the extra hour in October, they could allow employees to go home an hour earlier when the clocks go forward in April. This will cancel out any extra hours worked over the year.

The extra hour has the potential to affect the working time rights of night shift workers also. All night workers must not work, on average, more than 8 hours in any 24-hour period and all adult workers should receive 11 hours’ consecutive rest in any 24-hour period. Where your client requires staff to work the extra hour, they should fully consider these rights to ensure they’re not in breach.

Our clients can also remind workers who are rotad to come in on Sunday about the clocks going back to ensure they are attending work on time.


Managing people can be one of the toughest challenges faced by businesses. Unhappy employees will perform below expectations, which can have a knock-on effect on the rest of the business. Here are a few tips to help you to get your team on side, in order to get the best out of them.

Get your team involved in planning

Managers should take ownership of the overall delivery of projects, but getting input from team members can help to get everyone invested in achieving the objectives. It also creates a sense of collaboration that can help reduce negativity towards “management”.


Even if a team is trying to accomplish the same goals, that doesn’t stop everyone from going off in different directions to accomplish these. Your team needs to be aligned and moving in the same direction. Ensure objectives are communicated clearly and that everyone knows what they have to do in order to succeed.

Be sociable

Interacting with your team and getting to know team members as individuals is key to building a happy, effective and productive unit. Invest time in social activities and say hello to your team members in the office.

Communication is key

If you want to build an effective team, you need to communicate. Schedule a regular weekly meeting and encourage others to contribute to the discussion. Ensure that everyone on the team understands the key objectives, where necessary documentation is stored, what the key processes are, etc. You should also allow time for your team members to ask questions and be prepared to accept constructive criticism. Nobody expects you to get everything right but they do expect you to be accountable and to be willing to learn.



Good governance is not about making the right decisions but about ensuring there is a good decision-making process used in the business.

In a large enterprise, the management board will have a team who are charged with ensuring the firm adheres to the principles of good corporate governance as is expected of a large organisation. Good governance is about having policies and procedures in place to ensure accuracy, consistency and responsiveness to key stakeholders including customers, shareholders and regulators.

In a small business, the governance structure may be as simple as having a trusted advisor and some form of administrative support.  A step up from that may be a couple of non-executive Directors or even appointing an advisory board. Regardless of the size of your business, good corporate governance is good for business because it:

Encourages good decision making

If a market shifts or a new trend / opportunity emerges in your business sector, having a robust decision making methodology in your firm can help you to change direction efficiently in order to drive the business forward.

Helps manage risk

You and your team may be focused on executing growth strategies, growing key client accounts and generating new business. This means there is a risk you could miss something. Good corporate governance practices ensure the business stays on top of statutory reporting, annual returns, renewing insurance or licenses, etc. Perhaps having an advisor on your board of management will help you to remain accountable and focus on meeting these obligations.

Encourages management to seek advice

Adhering to good corporate governance practices encourages managers to regularly review the firm’s strategy and performance and seek external opinions where necessary. Bringing in external expertise to aid strategic decision-making can add significant benefits to the firm.

Password Security

Every day, we read stories about the latest business to suffer from a cyber attack. Businesses install quality security software and password protected servers to guard against cyber threats. However, the weakest link in your IT security could be your employees and the strength of the passwords they use to log in to your systems.

A huge problem for businesses is people use passwords that they can easily remember such as password123 (one of the most commonly used). More sophisticated security means users often have to include special characters so perhaps they are now using p@ssword123. This isn’t going to do much to secure your IT systems.

Many firms will provide IT security training to their staff, encouraging the use of more complex passwords. That is good unless the team members start writing their passwords down and leaving them on their desk.

You can encourage people to use complex, more secure passwords that they can easily remember by using a password manager and generator.

A password manager and generator is a piece of software that generates secure passwords for all relevant accounts and stores them securely either on their server, on a USB drive or locally on your PC. The software will encrypt and store password information so you only have to remember one password for the password manager itself.

Password manager and generator services are available online from the likes of LastPass, Dashlane or KeePass Password Safe. Larger businesses might want to use an enterprise level system such as Sticky Password from AVG. Perhaps this is the way forward for password security until fingerprint scanning or facial recognition become mainstream options for businesses.

Vat – Self-Storage of Goods

Joe Brown is a VAT registered farmer. He owns a barn and is looking to rent it out. He has found a potential tenant who wants to use it to store his stock for his shop.
The tenant is not VAT registered and was concerned that VAT would be due on the rent. Joe has carried out some research and believes the supply will be exempt as he has not opted to tax the property. Is this correct?

Generally, a licence to occupy land is deemed exempt under Schedule 9 Group 1 of VATA94 unless an option to tax is in place. Unfortunately, as with all things VAT, there are exceptions to the general rule.

A change introduced by the Finance Act 2012, required the standard rate of VAT to be applied to supplies of storage facilities with effect from 1 October 2012.

Although HMRC’s manual VATLP17500 has been updated to take account of the changes, Notice 742 has yet to follow suit

The legislation refers to “facilities for self-storage of goods”, but the changes are not restricted to the type of storage where a small area within a dedicated building is rented by an individual to store their own personal property. The law specifies that “the self-storage of goods” means:

The storage of goods

In a relevant structure

By either of the following

1 – the person(s) to whom the supply is made; or

2 – a third party with the permission of the person(s) to whom the supply is made.

What is a “relevant structure”?

A “relevant structure” means the whole or part of any of the following:

  • a building
  • a unit
  • a container or other structure that is fully enclosed

If the storage is within a relevant structure then it is covered by the new rules.

The onus is now on the landlord to know what the property will be used for and charge VAT accordingly.

Where there is a single supply of facilities which are used by the customer for both the storage of goods and another purpose, the VAT liability follows that of the principal element of the supply in accordance with normal rules. The following examples may be helpful.

  1. A customer rents a warehouse in which to store goods but also uses a small amount of the space as an office. The whole supply is taxable, as the principal supply is that of space for storage.
  2. A retailer rents a high street shop which includes a stockroom. In some cases, the storage area may be greater than the retail space. However, the commercial reality is that the premises are being used as a shop. The rent payable is accordingly exempt unless the landlord has an effective option to tax.
  3. A delivery service uses a warehouse to sort and process mail. Whilst it could be said that the mail is temporarily stored in the premises, the reality is that the facility is used as a postal depot. The rent payable is exempt unless the landlord has opted to tax.

These examples are not exhaustive and each case should be considered on its own merits. In Joe’s case however, he would be making a standard-rated supply of storage facilities, irrespective of any option to tax.


The rules for taxing dividends changed radically from 6 April 2016 with the removal of the 10% notional tax credit and the introduction of new rates of tax on dividends. For many taxpayers there will be more tax to pay on those dividends on 31 January 2018.

Up until 5 April 2016, the 10% dividend credit meant that basic rate taxpayers paid no tax at all on dividend income as the 10% tax on dividends was covered by the 10% tax credit. For example, where a basic rate taxpayer received £9,000 dividends, this would be treated as £10,000 gross income but the 10% tax of £1,000 would be covered by the £1,000 tax credit. From 6 April 2016 the same £9,000 dividend would now be taxed at 7.5% once the £5,000 dividend allowance has been used making £300 tax due on 31 January.

Where dividends are received by a higher rate taxpayer, the loss of the 10% tax credit means that the full 32.5% rate applies to dividends in excess of the £5,000 allowance.

Thus, if a higher rate taxpayer received £30,000 of dividends, £25,000 of those dividends would be taxed at 32.5% meaning £8,125 due on 31 January 2018. Last year the tax on the same dividends would have been £7,500 after deducting tax credits.

If you can let us have all of your tax documents as soon as possible, we can let you know how much tax you need to pay next January so that you can set aside sufficient funds.


Joe Bloggs is a non-UK resident but has UK rental income and savings income. Does he need to report this in the UK?

UK property income will need to be reported in the UK.  Any letting agency that manages the property or the tenant that occupies the property has the responsibility of withholding basic rate tax before they pay the rent to the non-resident landlord.

Non-resident landlords may wish to complete NRL1 form (For individuals & NR2 for companies). This is to stop letting agents/tenants deducting 20% tax withholding on gross rents and reporting it to HMRC.

The non-resident landlord will need to complete an SA1 form to register for self-assessment if they do not already complete a self-assessment return.

However, the position is different for savings income. The taxpayer has the option to “disregard certain income” (ITA 2007, s 811 and HMRC HS300).

Disregarded income relates to income such as bank interest and dividends. Unfortunately, it does not cover rental income. Non-residents have two options, they can disregard certain income that has arisen in the UK but they lose their personal allowance or include the income on their UK tax return and retain the personal allowance (assuming they are entitled to the personal allowance. You may need to refer to double taxation treaty to check if personal allowance is given).

However, with the disregarded income, it does not apply to for “split year” tax years and the taxpayer/advisors need to be careful that they are not caught by the temporary non-residency rules (HMRC guidance RDR3 page 71), otherwise the disregarded income will come back into charge on the year of return.

In addition, that may be worth noting, is if you’re about to leave the UK or have left the UK, you do need to complete a P85 form to notify HMRC that you have left the UK if you are not within the self-assessment system.


These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 September 2017.

Where there has been a change the previous rate is shown in brackets.


Engine Size Petrol Diesel LPG
1400cc or less 11p


1600cc or less   9p  
1401cc to 2000cc 13p (14p)   8p (9p)
1601 to 2000cc   11p


Over 2000cc 21p


12p (13p) 13p (14p)

You can continue to use the previous rates for up to 1 month from the date the new rates apply.