Friday, October 7, 2011

Self-employment: checklist

Why become self-employed
There is encouragement from the government for people to become self-employed and at first it seems attractive, especially if you have recently become unemployed or redundant. Although one of the main attractions of becoming self-employed is no longer having to work for somebody else there are several disadvantages you should consider. These include not being certain of having a regular income, having to arrange your own sick pay and pension and probably having to work long hours.

What kind of business
If you are considering self-employment and do not already have an idea of what you want to do, you could consider something which uses your experience or skills or something which you have previously done as a hobby. As well as the organisations listed in this information (see under heading Who can give further advice) you may be able to get ideas by looking at books and leaflets in the local library or job centre.
Training in either practical or management skills may be necessary. Training is available from a variety of sources such as courses run by the organisations listed in this information (see under heading Who can give further advice), evening classes at local colleges, books.

How to trade
If you are considering self-employment, you will need to discuss with one of the organisations listed under heading Who can give further advice the different ways of trading and which would be most appropriate for your business. The business could take one of three legal forms:-
a sole trader. This is the simplest way of starting a business
a partnership. This is similar to a sole trader except that two or more people run the business
a limited company. This gives the business a completely separate identity from the people who run the business. It is more complicated to set up.
In addition to one of the above legal forms, self-employment can also involve one of the following trading practices:-
a co-operative. This is a business which is collectively owned and controlled by the people who work in it. At least two people must be involved
a franchise. A franchise is an agreement which allows the person buying the franchise the right to run a branch of a business that someone else has set up.

As a self-employed person, you will need enough money to live on as well as money to start up the business and keep it going. You may be able to get money from the following sources:-
family or friends
grants from charities or trusts
loans from banks and building societies.

Book-keeping and accounting
It is extremely important that accurate and detailed records of the business are kept. You may be able to keep your own books or employ a bookkeeper or accountant, but if you are trading as a limited company you will need the help of an accountant.

Income tax
As a self-employed person, you will be responsible for paying income tax on your earnings and will usually need the help of an accountant. There are special tax reliefs and allowances which self-employed people can claim. If you are newly self-employed, you should register with HM Revenue and Customs (HMRC) by calling the helpline for the Newly Self-Employed. The helpline number is: 08459 154515.
You can get more information about income tax for self-employed people from the HMRC website at:

Value Added Tax
Value Added Tax (VAT) is a tax on goods and services which is paid to HM Revenue and Customs. Whether or not a self-employed person has to pay, and in some cases has the right to choose to pay, VAT depends on the type of business and how much the business sells.
You can get more information about VAT from the website of HM Revenue and Customs at:

You could consider trading in the following ways:-
from home. This has the advantage of low costs but you will need to make sure that the tenancy agreement, mortgage agreement or title deeds of the property do not place any restrictions on business use. You may also need to get local authority planning permission
from premises you have bought or rented. You should consider how much space you need as well as heating, lighting and ventilation requirements. You need to make sure the property has been approved for business use. Planning permission may also be necessary. If you are considering buying or renting premises you should see a solicitor
from a market stall. The local authority will have details of where and when these are available and how much local markets charge
at craft fairs. The local authority will be able to give details of where and when these are held.
Business rates
Business rates have to be paid to the local authority on most business premises. These include shops, offices, warehouses and factories. In some cases, for example, in a property which contains a shop and a flat, or if you work from home, you may have to pay both business rates and council tax. Some types of business premises are exempt from rates, for example, agricultural land. For more information about business rates in England, see the government's Business Link website at (New window)
For more information about business rates in Wales, see the website produced jointly by the Valuation Office Agency (VOA) and the Welsh Assembly Government at:
For more information about business rates in Northern Ireland, see the website of the Land and Property Services at: (New window)
For more about business rates in Scotland, see Scottish Government guide on non-domestic rates.
For more information in England, Wales and Scotland about council tax, see Council tax.
Health and safety
As a self-employed person you have a duty to make sure that your business premises and working environment meet health and safety requirements. Further information about health and safety requirements is available from the local health and safety executive or environmental health department of the local authority. In Scotland, local authority refers to the District and Islands Council.

Depending on the business and how you trade, you will be required by law to take out certain types of insurance. Other types of insurance are not compulsory but it is important to consider which ones are appropriate. The types of insurance you may need are:-
employer’s liability insurance. If you employ other people you must have this insurance. It provides cover for claims made by employees who are injured or become ill as a result of their employment
vehicles insurance. Vehicles used for business purposes must be insured even if already insured for private use
public liability insurance. This provides cover against claims by members of the public who have been injured or had property damaged as a result of carelessness at work by you or your employees
premises insurance. Insurance will be necessary for the premises you work from, even if you work from home and there is already a policy. This is because the insurance will usually only cover residential use
contents, stock and materials insurance. This insurance will be necessary to cover the replacement costs of stock, materials and the contents of the premises even if is work is being done from home and there is already a home contents insurance policy
health and accident insurance. These will pay a regular income or lump sum if you are unable to work because of an accident or sickness.

As a self-employed person you will get state retirement pension if you have met the contribution conditions.
For more information about Retirement Pension, see Benefits for people over sixty.
You could also consider getting a private personal pension.

Immigration status
Setting up in business may affect your immigration status and you should therefore consult an experienced adviser before doing so. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Employing other people
If you employ other people you will be responsible for paying wages, tax, national insurance contributions and Working Tax Credit where relevant. You will have to meet the requirements of employment law and health and safety regulations.
For more information on the responsibilities of employers, see Basic rights at work.

National insurance contributions
As a self-employed person you may have to pay national insurance contributions for yourself and any employees. Whether you have to pay contributions for yourself, and if so what type, depends on how much you earn. Whether contributions have to be paid for any employees depends on what they earn. The payment of contributions will affect the benefits a person can claim in the future.
You can find more information about national insurance contributions for self-employed people on the HM Revenue and Customs (HMRC) website at HMRC also provides a National Insurance Self-employed Helpline for telephone enquiries on 0845 915 4655.
For more information about national insurance contributions, see National insurance - contributions and benefits.

Benefits and Tax Credits
As a self-employed person you may be able to claim benefits or tax credits, depending on your income and other circumstances.
To check what benefits or tax credits may be available, see Benefits and tax credits for people in work.
If you are self-employed you should consult an experienced adviser, for example, a Citizens Advice Bureau, for help in working out how much benefit or tax credit you are entitled to. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Trading names and licences
You need to consider whether you wish to use a trading name for the business. If so, there are restrictions on the names businesses can use. You may also need to get a licence depending on the type of business. For organisations that can advise on trading names and licences see under heading Who can give further advice.

Who can give further advice
The services offered by banks vary greatly and so do the fees they charge. Some banks have special teams who handle business accounts. They may also have useful information for start-up businesses. It's a good idea to shop around for business banking services, for example, by using a financial comparison website.
The British Bankers Association has a website that can help you find the business account that suits you. For more information, go to:
Chambers of Commerce
A Chamber of Commerce is a local network of businesses. It can provide information, advice and training to businesses in your area. Most give free advice to members, but charge for services to non-members. Some Chambers of Commerce serve particular ethnic minorities.
Business Link (England only)
Business Link is a free, government-funded business advice and support service for businesses in England, available online and through a network of local advisers. The website contains detailed information about setting up and running a business.
Tel: 0845 600 9006
Minicom: 0845 606 2666
Website: (Wales only)
The Welsh Assembly Government's service helps and supports people who want to start, maintain or expand a business in Wales.
Tel: 0300 060 3000
Business Gateway (Scotland only)
Business Gateway is a service provided by Scottish Enterprise. It provides practical help, advice and support for new and growing businesses in Scotland.
Tel: 0845 609 6611
Website: (Northern Ireland only) is a free business advice and support service for businesses in Northern Ireland.
Tel: 0800 027 0639
Invest NI (Northern Ireland only)
Bedford Square
Bedford Street
Tel: 028 9023 9090
Fax: 028 9043 6536
Invest NI is an economic development agency. It offers a range of services to client companies, including financial assistance to eligible companies with a focus on export potential.
Inbiz (England only)
Enterprise House
8 Yarm Road
TS18 3NA
Tel: 01642 610610
Fax: 01642 610611
Helpline: 0800 0321 001
Inbiz provides help and support to long-term unemployed people who want to become self-employed.
Local enterprise agencies (England, Wales and Northern Ireland only)
Local enterprise agencies give free general advice and support to small businesses. Training courses are also available, which are often free. Details of local enterprise agencies are available from the National Federation of Enterprise Agencies - see below.
Northern Ireland
Enterprise Northern Ireland
County Derry
Tel: 028 7962 8113
Fax: 028 7962 8973
Website: (New window)
National Federation of Enterprise Agencies (England and Wales only)
12 Stephenson Court
Fraser Road
Priory Business Park
MK44 3WH
Tel: 01234 831 623
Fax: 01234 831 625
Website (general):
NFEA is a network of local enterprise agencies in England and Wales. Its general website has details of how to find your nearest local enterprise agency.
Scottish Enterprise
Scottish Enterprise is a network of regional offices and the national Scottish Enterprise organisation. The network helpline and website give details of regional offices and assistance offered.
Atrium Court
50 Waterloo Street
G2 6HQ
Helpline: 0845 607 8787 (from within Scotland)
Helpline: 0141 228 2000 (from anywhere in the UK)
Helpline e-mail: or
Firstport (Scotland only)
Firstport offers free support to people who want to set up a business which will have direct social or environmental benefits. It also administers the Scottish Government's Enterprise Fund.
Cornerstone House
2 Melville Street
Tel: 0131 220 0511 or 0845 478 6336
Local authority economic development units
Some local councils have set up units which give advice and help to businesses in their area. Some have bilingual advisers and are intended particularly to help ethnic minority small businesses. They tend to be mainly in inner-city areas. The advisers are employed by the council and will usually have a business background or related skill, such as banking or accountancy.
National Federation of Small Businesses
England and Wales
Sir Frank Whittle Way
Blackpool Business Park
Tel: 01253 336 000
Fax: 01253 348 046
74 Berkeley Street
G3 7DS
Tel: 0141 221 0775
Fax: 0141 221 5954
Northern Ireland
Cathedral Chambers
143 Royal Avenue
The National Federation of Small Businesses is a pressure group which promotes the interests of all self-employed people. There are a number of regional offices and many local branches. There is a subscription fee.
The Federation publishes a free magazine and runs a legal fees and advisory scheme, which provides 24 hour legal advice, and various insurance schemes.
British Franchise Association
A2 Danebrook Court
Oxford Office Village
Langford Lane

Tel: 01865 379892
Fax: 01865 379946
The British Franchise Association (BFA) is the trade association for franchising companies. It was set up to promote franchising and establish standards. To join, franchising companies have to show that their franchise works and they have to agree to abide by a code of ethics designed to protect franchisees.
The BFA produces an information pack (£29 including postage and packing) for prospective franchisees which includes a list of checks to be made before buying a franchise.
The Prince’s Trust
England and Wales
18 Park Square East,

Tel: 020 7543 1234
Freephone helpline: 0800 842 842
Fax: 020 7543 1200
Prince’s Scottish Trust
1st Floor
The Guildhall
57 Queen Street
Glasgow G1 3EN
Tel: 0141 204 4409
Fax: 0141 221 8221
Northern Ireland
Midland Building
Whitla Street

BT15 1JP
Tel: 028 9074 5454
Fax: 028 9074 4666
The Prince’s Trust helps young unemployed people aged 16-25 to set up their own businesses. In Scotland the age limit is 18-25 only. The Trust can give loans, on-going business advice and help with marketing. The Trust is particularly interested in helping people from ethnic minorities, disabled people and ex-offenders.
PRIME Business Club
PRIME is a national charity dedicated to helping older people (over 50) start and run their own businesses. PRIME stands for the Prince's Initiative for Mature Enterprise. If you are thinking of becoming self-employed, it will provide you with a free start-up pack and provide information about local organisations that can help. It can be contacted via its website at
England and Wales
Hawthorn House
Forth Banks
Tel: 0191 261 5584
Fax: 0191 261 1910
Website: (New window)
Shell LiveWIRE UK
Design Works
William Street
NE10 0JP
Tel: 0845 757 3252 (Lo-call) or 0191 423 6229
Northern Ireland
Gerry Ford
Shell LiveWIRE Northern Ireland
Tel: 028 9055 3802
Livewire is a national scheme sponsored by Shell, to help young people aged 16-30 to set up in business. Young people with projects can discuss their ideas with local advisers and financial awards may be given. There is usually a closing date for the scheme each year. Each entrant to the scheme will be paired to an adviser who will help them on an individual basis to plan and develop their business idea.
Co-operatives UK
Holyoake House
Hanover Street

Tel: 0161 246 2900
Fax: 0161 831 7684
Website: (New window)
Co-operatives UK is the central organisation for co-operative enterprises in the UK. It is member owned and led, and works to represent the interests of its member co-operatives. It provides a wide range of support services to its members.
NORIBIC Business Innovation Centre (Northern Ireland only)
Northland Building
Strand Road

BT48 7AL
Tel: 028 7126 4242
Fax: 028 7137 2294
The NORIBIC Business Innovation Centre provides help for
new businesses throughout N. Ireland in evaluating projects, preparing business plans for small businesses, finding premises, arranging finance, grants and subsidies, and finding new business ideas. It can also give advice on new technology.
Brecon Business Centre (Wales only)
61 Brecon Business Centre
Market Approach
Tel: 01874 610 054
Fax: 01874 610 794
Brecon Business Centre is responsible for the economic and social development of mid-Wales. It provides advice and support to small businesses, including advice about setting up in business, preparing a business plan, advising on whether the business idea is viable and can help investigate sources of money, find suitable premises and set up financial control systems, for example, book-keeping. It runs training courses, and provides advice locally through a number of Business Centres.
Rural Development Council (Northern Ireland only)
17 Loy Street
County Tyrone
BT80 8PZ
Tel: 028 8676 6980
Fax: 028 8676 9922
Acas (Advisory, Conciliation and Arbitration Service) (England, Wales and Scotland only)
If you are an employer, you can get free advice on employment matters from the Acas website at and on its telephone helpline, 0845 747 4747. Acas also provides training courses on employment topics that may be useful for small businesses. The Acas Equality Direct helpline, on 0845 600 3444, provides a confidential advice service on discrimination and equalities issues.
Skills Development Scotland (Scotland only)
Skills Development Scotland
Alhambra House
45 Waterloo Street
G2 6HS
Tel: 0141 285 6000
Skills Development Scotland for business is a service that provides businesses, learning providers and individuals with appropriate training, skills and funding advice.
Disabled Entrepreneurs Network (England and Scotland only)
The Disabled Entrepreneurs Network is a regional networking service for disabled people. It provides advice and support for disabled people who run their own business or who want to set up in business.

Creating and Implementing a Human Resource Management Plan

Table of Contents
Getting Started
There is a saying in the financial planning business: "Nobody plans to fail; they just fail to plan." This saying is no less true of human resource management planning in today's modern farming operation. Too many producers wait until the need for employees is at a critical stage before they start their search. Including a plan and an annual review of their human resource needs will save producers countless hours of frustration.
Creating a human resource management plan does not have to be an onerous task, but it does take some time and thought. The effort put into the plan will pay dividends by resulting in finding the right people for the job. For producers planning on hiring, a human resource management plan is an essential tool in the decision-making process. A plan will help identify areas where additional employees may be needed as well as positions that require specific skills.
The process starts with reviewing and assessing the operation's needs for employees, followed by developing job descriptions, recruiting workers and, finally, hiring them. Part of the job description development stage is compiling an employee "handbook," which will include the job description and the employer's expectations of the employee.
This Factsheet is designed to give producers a starting point for human resource management planning for their operation, describing how to conduct needs assessments, create job descriptions, recruit and hire employees. This Factsheet also contains a checklist and templates that will help producers design their own HR management plan.
Needs Assessment
Start with a review of the operation over the past year. Take into account the number of people hired and the times of the year they were employed. Recall any difficulties that were encountered and make note of them for the next year's planning.
The major problem most employers face is not having enough qualified employees at the right time. In the assessment, include real and anticipated needs for the next season as well as needs arising from any future expansion plans you may have. If you are planning to increase or decrease production within the next five years, make recruiting and hiring plans accordingly. Determine if your labour needs and current workforce match. A good needs assessment will provide a clear picture of the skills and personal characteristics the operation needs in its employees.
Assess yourself as well. What are your strengths and weaknesses? What skills do you have as a producer or business owner? What is your vision for your operation? What are your goals - both long and short term? Take into account any external factors (e.g., market conditions) or internal factors (e.g., succession planning). Write out your goals to get a clear picture of your farming business; you may see things from a different perspective. The more specific you are, the better you can determine your needs. Include a timeframe with your goals. Remember to include any personal or family goals that will affect decisions concerning your business.
The final step in this needs assessment will be to decide whether your labour needs match your current workforce. If they do, remain vigilant and re-assess the situation each year. If they don't, make alterations or changes in the workforce to increase productivity and make the business profitable. The alterations may be as simple as changing a job description or as involved as moving employees to different positions or hiring additional staff.
Job Description
The next step in creating a human resource management plan is to write job descriptions for all the positions on the farm, from supervisory roles to entry level positions. Preparing a job description is a fairly easy task. Record what the job entails - the duties and skills needed and any other details. List the minimum experience required for the position, as well as a salary range and any required training.
Establishing a salary for a position may be the most difficult part of creating the job description. Many employers make the mistake of initially offering too small a wage, saying that it will be adjusted depending on how the employee "works out." A salary range is the best way to handle the wage issue, since an experienced, capable employee will expect the top of the range, and rightly so. Good, experienced people will likely not even bother to apply for jobs with low starting wages.
Job descriptions are an excellent management tool and can be used for recruitment, selection and the appraisal of employees. The job description lists the specifics of the particular occupation, clearly stating the employee's duties. Benefits are becoming more and more important to prospective employees. Include a list of benefits, such as housing, profit sharing and retirement plans, including detailed descriptions and the dollar value of each benefit.
Providing accurate and honest job descriptions can go a long way towards heading off potential problems down the road. If all parties agree on what the job entails and accept the terms, future difficulties will be minimized. A job description will form part of the agreement with your employee. It should be reviewed and updated annually. A sample job description form is located at the end of this Factsheet.
Employee Handbook
The employee handbook should spell out for the employee the "rules of the game" when working at your farm. It is very important that it is written in clear and concise terms.
Communication is the key to success when dealing with people. Talking to or instructing someone does not guarantee that the individual understands or comprehends what is being said. People sometimes interpret the same message in different ways. The employee handbook may be one of the most valuable tools that you can offer your staff. It will not only serve to describe your expectations, in plain language, but can also work in reverse. Employees will be able to write their job expectations in the handbook, which will give you an opportunity to see if the employees understand their duties. Tailor your handbook to your operation. It can serve as both an employment agreement and a training document.
Include both the employee's and your regulatory responsibilities under the Occupational Health and Safety Act, the Workplace Safety and Insurance Act, as well as the Employment Standards Act.
As an employer you also have responsibilities under the general category of payroll, including Canada Pension Plan and Employment Insurance obligations.
Include a section on training. Employee performance depends on both their ability and how well they are motivated. A top-performing staff member has both the skills to do the job and the motivation to take the initiative to see the task to its conclusion. On today's modern farming operation, it is no longer acceptable to simply ask an employee if he or she has done the job before. Be prepared to train new and existing workers on an ongoing basis. In the past year, the Occupational Health and Safety Act has been legislated to cover farming operations. To provide a safe workplace, employers should now provide formalized safety training for their farm. Record these training events in case of an accident in the future. Training your employees reinforces your commitment to them, not only as employees but as valuable members of your team.
Review the entire handbook with the employee to try to make sure there are no misunderstandings. Ask your new employee for his or her input on the policies of your operation and, if needed, explain them, whether it's a safety issue or your policy regarding sick time. Remember that what may be a small issue in your eyes might be of greater importance to a new employee.
The third step in this process is to recruit, interview and hire someone. The traditional recruiting methods include word of mouth, newspaper ads and employment agencies. An agency will screen and refer potential workers for a fee.
Another option is posting jobs online. Websites that offer this option do not usually provide a screening service, so the producer must review all the applications, not just those that meet the job specifications. This is not the ideal situation for hiring employees, however it does usually generate interest and a flow of people to your farm. Your chances of finding a good, qualified applicant are increased by the number of people applying for the position.
Service Canada offers an electronic labour exchange service ( Employers use an online checklist to build a profile of the position they have available, while prospective employees build a profile of their skills and experience and the type of work they are looking for. Employers get a list of "potential" matches and can contact the candidates. In many cases, the actual job is not even posted.
Remember to tell current employees when you are recruiting; they may know of someone who would be suited for the job. Keeping them informed will also give them a sense of being part of the operation.
When deciding which recruitment method to use, weigh the cost in both dollars and time. If each interview takes a lot of time, it is not cost effective to see 150 applicants for a single job advertised in the newspaper. Using an agency that will pre-screen applicants or the electronic labour exchange will narrow the choice down for you.
Hiring is a three-step process - the interview and testing, the reference check and the formal offer of employment. This process can be modified depending on the type of job. Hiring someone for a few days' work will not require as thorough a process as hiring for a management position.
A thorough interview should take about one hour. Make a list of questions that will test the candidate's skills, knowledge of the job and other characteristics, such as ability to work with people, ability to make decisions and ability to take on responsibilities. When hiring for a position of management, concentrate your questions in the management skill area. When preparing the questions, make sure they are open ended - they can't be answered just "yes" or "no" - to encourage the person to talk, so you can better assess his or her abilities. Decide on a rating scale to help judge each interviewee equally. While it may be important that the employee be able to work well with current employees, be cautious not to let emotion play too large a part in your decision at the expense of all other factors.
The testing stage of the interview can be done during the initial meeting or in a follow-up interview. Testing the applicants in the actual job will show how accurately their qualifications were described on their resumes and how much additional training will be required. For example, if the applicant is applying for a mechanic or equipment repair job, a simple test should suffice. Disconnect a part on your tractor and see if the applicant can identify and correct the problem.
Once you've decided who to hire, check his or her references before you make a formal job offer. Check at least two work-related references and one personal reference, if possible. If the applicant does not have a great deal of work experience, check additional personal references.
Write out the job offer, including wages, benefits and hours of work, to avoid any misunderstandings. The job description will be included in the employee handbook.
The actual work agreement should include:
job description
salary and wages
pay periods
regular working days and hours
sick leave
housing (if applicable)
benefits (health insurance, retirement plan, accident insurance, life insurance, etc.)
transportation or car allowance
statement of pay deductions
leave policy on employee-requested training
probationary period
provision to update information in agreement
termination statement
employer, employee and witness signatures
You may alter this agreement to suit your own needs, but for an agreement such as this to be successful, it must be followed. Careful attention to the details in these agreements helps both parties understand what is expected of them.
The templates on the next four pages can be used to develop your human resource management plan.

HR Plan Templates
Human Resource Management Planning Checklist
This checklist is not intended to be a comprehensive list of all potential legal requirements for employing workers. Check with your legal and financial advisors for complete requirements.
check boxNeeds assessment
check boxJob descriptions
check boxtraining/employee handbook
check boxlegislative requirements:
check boxOccupational Health and Safety Act
check boxEmployee Standards Act
check boxWorksplace Safety and Insurance Act
check boxpayroll:
check boxCanada Pension Plan
check boxEmployment Insurance
check boxbenefits
check boxhousing
check boxwages
check boxRecruiting
check boxHiring

Source: website