Why is it so difficult to find employees?

How many times do I have to say this Durhamjen I am not self employed and never have been. Neither am I "classed as self employed" . We run a Limited company and have done for just over 20 years. I pay tax and NI through the PAYE system in exactly the same way as anyone else does.

Also I find it incredibly hard to believe that your window cleaner does declare all of his £5's and don't even get me started on hairdressers ! I am only jealous of course.

We seemed to have strayed away from the original question somewhat

GillT57 - I'm sorry that you've felt beleaguered. You asked a reasonable question. I agree with all the positive comments about small businesses, and the demands on the employer. I hope you have better luck in recruiting OP and that you aren't put off gransnet by the sometimes challenging discussions that go on. I don't think anyone here was 'having a go' at you, more widening the debate about running a small business, working cash in hand etc.

Durhamjen

grannyactivist summed up my point perfectly!

They were your words not mine and I do understand how,why and when you have to pay VAT.... I was just surprised window cleaning was such a high earner and why you didn't pay the living wage as you feel it should be paid.

Gill T57

I too am sorry you feel beleaguered. I guess you have been working all day and now have to catch up with even more work. Good on you for trying.

durhamjen The rules may have changed but when I first registered to pay VAT (quite a few years ago) my turnover didn't reach the VAT threshold but I could still register to pay VAT. I did so because a lot of my suppliers were VAT registered. The problem was that a lot of clients didn't pay me until three or even six months (in one case 18 months) after they were invoiced.

I'm confused. There are advantages to being VAT registered unless your customers are not. Any B2B needs to hit the threshold and can therefore claim back any VAT they are charged, not only on their purchases but also expenses. Must be some very fit window cleaners somewhere.

gill I agree that what you are offering something which is quite attractive compared with many other employers. I've worked as a cleaner for 10 pounds an hour, worked in shops for £6.50 an hour, and worked as a teacher for £20 an hour.

Apologies if this has already been said(I haven't read the whole thread), but I think that if you are looking for this sort of work you are quite possibly trying to avoid the taxman or trying to supplement some other benefit, such as Tax Credits. In such circumstances it is not in a person's interests to work "legitimately": often it makes more sense to work as a self-employed person, even if there is little or no security.

With respect, you are not paying much, but you are trying to do the right thing. I applaud you for that. You are offering more-in real terms-than many other employers but you are competing with a thriving market of unregulated-and untaxed-labour. Good luck to you, though.

Just a quick update.....I have in fact now had a lot of applicants for the job, but the problem now is the hours and my not being able to guarantee people being back in time to collect children from school. I have been there myself so I now how tricky it is. It is becoming apparent that due to the new Universal Credit rules, that everyone who has small children and has been claiming income support is now being transferred on to job seekers allowance when their youngest reaches six. The small business owner is left to sort it out again eh?

Gill I too am sorry that you have felt beleaguered, and to answer your question, I would say that employees usually don't understand the financial value of paid holidays and paid sick pay, and they appreciate even less the financial value of the employer's NI contribution, which is substantial, and without which they would not, eventually, receive the State Pension.

What seems like a low hourly rate to them, is actually quite a high hourly rate when you factor in all those things.

I have a cleaner through an agency, and I pay almost 12GBP (sorry I'm on an American laptop which seems not to have a pound sign ) an hour.

I'm well aware that only some of this goes to the cleaner, some goes to the agency owner, and quite a bit goes to HMG.
I don't begrudge a penny. The cleaner does a great job, and Laura the agency owner provides someone else if the cleaner's on holiday, and if there were any problems she would sort them out. I would much rather do it this way than employ someone directly myself.

You are providing a valuable service, not only to your clients but also for the people you do employ, and for society in general by facilitating employment. Regard the hurtful comments with the contempt they deserve.

janeainsworth, thank you so much for your kind comments, and most of all, understanding and appreciation of the true cost of someone's wages!

I also pay almost £12 an hour for a cleaner, through and agency and I expect the same thing happens with the breakdown. I have paid cash in hand previously but it was never really successful.

My window cleaner, on the other hand, cost £20 per visit! O to have a window cleaner that charges £5. Joe does a terrific job and is a nice guy but £20! Window cleaners are like gold dust so we are please to have him at all.

Good luck with the staff hunt GillT

£12.50p here!

The true cost of someone's wages does not matter to the person being paid. However much the employer pays on top, the employee still just gets whatever the stated hourly rate is, then pays tax and NI from that.
Anyone who is paid £6.64 an hour will pay NI once they work over 17 hours a week. They will not pay tax because the allowance is £9000+, I think.

Jen The importance of the true cost of someone's wages is that that is the price other people have to pay for their services.
If someone works in a supermarket, and they are paid 10GBP an hour, then our groceries are going to cost more than if they are paid 6.64GBP an hour.
I am not saying that it is fair in the grand scheme of things, or people shouldn't be paid 10GBP, simply that someone has to pay for it, and that will be you, me, and everyone else who goes to the supermarket, including all those people who are struggling to make ends meet as it is.
There's no easy answer is there - I'm reading Shirley Williams' autobigraphy at the moment, and I'm up to the bit where she was Minister for Prices in the Callaghan Government. She was tied up in knots, trying to keep prices down to avoid inflation, keeping the supermarket bosses and food producers happy to accept lower profits, and then there were the trade unionists who didn't want to keep their side of the bargain by not pushing for wage increases.....

Yes as a self employed person it is quite hard to set an hourly rate which actually covers all these things. People who are on a wage might look it and think it a lot, but they forget about their paid holidays, employers pension contributions, paid sick leave etc etc etc

The person who works in the supermarket also has to buy food from a supermarket, Jane.
No, JessM people on a wage do not forget about their paid holidays etc. When they take the job those are part of their terms of employment. The person who is self-employed can charge what they want, and change the rate. The worker can usually only do that through collective bargaining.
We complain about Waitrose being expensive, but that's because people who work for John Lewis group get a better deal than those working in Tesco. However, the head of Tesco pays himself more than the head of John Lewis.
Just finished reading Tony Benn's autobiography, Jane, and am now reading his letters to his grandchildren. Rather have had him as PM than Shirley Williams. She sold the NHS down the river last year.

Yes, Jen. That was the point I was trying to make - that the low-paid person working in the supermarket also has to buy food there. And yes, Tesco and John Lewis are different business models.

durhamjen - one can only charge what clients are willing to pay. They may think that say £40 an hour or £80 an hour is a lot of money and compare to their own hourly rate (as in I work 25 hours a week and get paid xx a week - nothing like such a good rate) - what they are not factoring in is all the benefits of employment and also that if you are paid hourly probably about half your time is unpaid hours, where you are travelling, doing your accounts, buying the materials and tools you need to achieve that etc etc etc
I think it is probably very rare for someone who has always been employed has a realistic view of self employment.

Spot on Jess

Yes,*jess*, quite. I for one had a shock on finding that, as a self-employed person trying to make ends meet when my dd was little, the overwhelming majority of jobs I could do were both self-employed and paid at the minimum rate. I have no problem with the minimum rate per se, but unfortunately it is now seen as the going rate, and not the minimum . Most employers around here now pay it, and the rate is kept artificially low as wages are made up through various benefits, courtesy of the taxpayer.

Personally, I would much prefer to shop in Waitrose/ John Lewis even if it's more expensive. I would prefer to see employees treated well and with dignity than get a couple of pence off a tin of beans, myself.

JessM, why would you expect someone who had always been employed to even consider what other benefits they are getting?
The other thing about self-employment is the tax breaks you get. Everything for the business can be claimed for, pens, paper, cleaning materials, even your gas and electricity if you work from home, travelling costs,etc. are all put down as expenses and taken off your taxable amount. Employees cannot do that.

Jen Why should people not consider the benefits of the society in which they are living? There is nothing wrong with being grateful for what you have.
It doesn't mean that everything is perfect, but we should also recognise when we are fortunate.
You talk about self-employed people getting tax 'breaks' as if there is something advantageous, or even underhand about it, when they are perfectly legitimate allowances.
If I carried on a business from an office, I would have to pay rent, electricity, water, phones, insurance etc. Those are legitimate business expenses.
If you use electricity at home while carrying on your business, you are still paying for it and why should it not be allowed against tax in the same way?

I do not understand, Jane. Jess was not talking about the benefits to society, but the benefits to the individual worker of being given more than their pay.
And I know exactly what self-employed people gain from being self-employed having been so in two separate businesses myself.
All I am saying is that if two people lived in a similar house, one employed and the other self-employed, the one who is self-employed would be able to claim for electricity on their tax return. Same house, same amount of fuel to heat it. People who are employed by someone else do not necessarily know that other people get tax perks in this way.

Jen I meant that the benefits we receive in this country, like maternity leave and pay, sickness benefit etc are an individual benefit, and they are also a general benefit of living in this country.
I know that the current government is trying to reduce the amount of benefits that people receive, but I still think that historically, and compared to many other countries, we are fortunate.

The comparison you gave of the self-employed person working from home and being allowed the costs of their fuel against tax, and the employed person isn't really valid.
Presumably the employed person isn't heating their house while they're out at work.

I agree, Jane, that we are historically fortunate compared to many countries. Our benefits have been fought for, usually by unions, and are rapidly being eroded.

You are assuming that the employed worker does not have a family needing heat in the house when he is at work. It is valid. Anyway, having had a guest house, I know the benefits I got from being able to claim. Even the business loan to pay the mortgage was tax deductible.