Help with my business

td23 wrote: »

1) I want to start to employ both subcontractors and maybe someone to help with paper work.. How do I legally transform from a sole trader to a company that employs people? I understand my insurances will need updating. I understand my insurance part.

you don't "need" to convert to a limited company. You can stay as a sole trader and yet still employ people. (For the sake of it from now on "you" means both you as sole trader or you as the company, unless I have specifically stated which is which)

to set up a limited company you will need to buy one, typically you would use an accountant to do that for you. Having purchased the company you will then have stepped up quite a considerable gear in terms of the admin it will require to run it and the standard of accounts that must be submitted. Do you already use an accountant (not a mere bookkeeper)? If so get them to do you a quote for how much extra it will cost you. There is no way you will be able to do the accounts for a company without professional help and there is then the admin required each year with Companies House submissions as well.

crucially get the accountant to do an illustration of how much tax you as an individual will face if you operate as a sole trader or as a company. There will be tax advantages to both and which one is better for you may be a key factor in deciding if you incorporate or not. For example, how the accountant handles something called "goodwill" on converting from sole trader to Ltd Co can impact the tax position of a company for a considerable period.

The company is an entity in its own right and you work for the company. The company does everything in its own name, not your name. As you appreciate therefore the company would need its own insurance, yours would be null and void as your current insurance relates to you as a sole trader, not you as a company. People sue the company, they don't sue you. It is crucial you understand the difference as many company owners think of the business as still being "me" which can lead to getting things confused, especially in terms of tax efficiency.

also bear in mind that the company will need its own bank account and its bankers may impose conditions which effectively water down the benefit of being limited liability. The obvious example being the banker require you as the company owner to provide a personal guarantee to underwrite any borrowings the company has. Company goes bust, your guarantee gets called in, so you may lose your house, just the same as you'd do if you went bankrupt as a sole trader anyway. Limited liability does not always mean no liability!

in regards employing an administrator "you" will need to register with HMRC as an employer, operate payroll software and report pay to HMRC every month - there are high penalties for failures.

Whilst it is quite possible to recruit an administrator who is experienced in running a payroll themselves and so could "DIY" it, such a person should be more costly than a "mere" administrator and thus your accountant might be better value for money in doing it for you as it is bread and butter work for them and they could be liable if they get it wrong. You are liable if your administrator gets it wrong when DIYing

as far as the subbies who would do the building work for you are concerned "you" will become a contractor as far as HMRC is concerned. therefore "you" need to register as a contractor under CIS and make CIS deductions from your subbies, or hold the relevant paperwork if they claim they have approval to be paid gross. Again there are penalties is you fail to do the reports to HMRC each month. Whilst CIS as a contractor is not particularly difficult to master, doing so from cold and meeting the first month's deadline might be a step too far whilst you are at the same time focused on growing the business, not worrying over admin. Again it might be better to pay your accountant to do the contractor CIS for you at least to start with

without wishing to insult you, how much knowledge do you have of JCT?
after all the tender is one thing, but it is your contract which will bite you and you need to know the various JCT contracts inside out

whether any of this will be relevant or of use to you I cannot say, sadly it isn't free, so I'm not saying you must buy it. Only you really know what level you are at?
https://www.jctltd.co.uk/category/guides
- contracts guides?
- tendering practice note?

td23 wrote: »

2) Health and safety wise - is there an official list of everything I will need in order - i.e.; method statements, what training I will need? All of this was done by the firms Ive subcontracted to in the past so I literally turned up at courses. Do I need First aid training etc? Ive been asked today if Im CHAS accredited.

read the HSE website - after all they are the ones who will prosecute you if you get it wrong
http://www.hse.gov.uk/construction/index.htm

CITB course?
http://www.citb.co.uk/employer-support/health--safety/

td23 wrote: »

3) How to Tender - Im fine making the contacts and getting on the list to tender for jobs, however Ive not really had to officially tender for any of my work in the past. Is there a set format in which my clients would want a tender presented?

it will vary from job to job whether the client wants the form of tender documented in a specific way or not. If it is a genuine tender then the client will send out a tender form for you to complete, so that is what you must do. Public sector bodies being prime examples of clients requiring tenders. I have no recent knowledge of what main contractors require as tenders (or quotes) from single trade sub contractors

If it isn't a formal tender then as you well know from your experience to date, how well you estimate the work required and therefore how accurately you price it will decide if you succeed or fail. Obviously i have no idea the contract values you have set your sights on, but I'd be surprised if you need to do many full formal tenders given, i assume, you are still pitching for single trade work rather a multi trade project? I'm guessing therefore that your "tender" will in essence be a glorified quote like you must be used to doing already? How much detail you show is down to how well you read the client brief. The key to winning a tender is to give the client the level of detail they want to be able to say here is someone who understands the job we want and has priced up the parts that matter. remember you do not simply win a tender on bottom line cost. Your reputation in the trade will in part be based on whether, for example, clients think of you as someone who inflates the contingency but underprices the work or any combination thereof in respect of labour, materials or prelims.

td23 wrote: »

I suppose Im asking if theres any help out there for a small sole trader to turn into a successful company. I know years ago there was 'Business Link' however they seemed to have vanished and I can't find any alternatives.

I'll leave you to do your own googling on that, but this may be a starter?
https://www.gov.uk/business-support-helpline

again not wishing to insult your industry knowledge, but is there anything that the CITB can help with?
http://www.citb.co.uk/employer-support/

Training Groups
Find and join training groups around the country to help develop your business
http://www.citb.co.uk/employer-support/training-groups/

https://www.gov.uk/business-finance-support/construction-industry-training-board-citb-grants-scheme-england

I have no knowledge of how the construction industry currently operates, but it can't have fundamentally changed.

Obviously it is not mandatory that a JCT form of contract is used (there are other bodies who produce "standard" contracts for the industry), but main contractors such as the housebuilders like Persimmon should offer their subbies a JCT sub-contract contract since the whole purpose of JCT was to standardise contractual terms between those engaged in the industry from job to job so that no one has to reinvent the wheel for each new job. JCT is the leading contract body

on that basis each new job should have fundamentally an identical contract so you won't need to pay a contract lawyer to vet it each time. you can compare for yourself the document you are being asked to sign against the template JCT contract to identify any changes and then decide for yourself if you accept (understand) the change.

if your customer offers you a bespoke contract then realistically you have no option but to get it seen by a contract lawyer since only they have the necessary knowledge (and professional indemnity insurance!) to advise you on what it means. Obviously that will be rather expensive.

as for VAT, I doubt the tender "requires" you to be VAT registered, but I'd expect it to be near impossible for you not to be VAT registered if you are in a position where you are dealing with the size of jobs that need tenders. After all the threshold for mandatory VAT registration is £85,000, so with you employing staff and buying materials your turnover should easily reach that level in a 12 month period, otherwise you ain't going to make any money.