Question regarding accounts assistant / colleague

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I started off my own small practice a while ago and took on an assistant when the workload increased.  She was employed in a supermarket job and doing accounts exams in the evening.  She began by just doing part time accounts work for me on an hourly rate.  It worked really well, her work is excellent, and she has now passed some exams and is hoping to study towards the Certified qualification.

She has recently given up the supermarket job and is now working with me on our clients.  She is still studying and I am showing her lots that I know about accounts, tax and bookkeeping from a practical point.

I think that I now need to see a lawyer and draw up some formal agreement between the two of us.....however, I'm not exactly sure how I want this to work.  I'm hoping that I can get some ideas here, which I can look through , so I have a better idea before I arrange for an agreement to be drawn up.

I'm a lot older than her and at the back of my mind I am thinking if I teach her all I know just now, she passes the exams, I could then sell the business to her at a later date if I want to retire, or maybe take a share of the profits but without too much day to day involvement.  I am thinking 10 to 15 years away.

I ask her to do a timesheet each week, but that's only for me to see what work she is doing.  I actually pay her a fixed sum each month which is more than the time she is working.  I've given her a lot of freedom.  She has as much holiday as she wants, she can work when she wants and on the clients that she wants to and she can contact them herself and make arrangements to see them at times to suit her and them.  My only stipulation is that between us we complete the set work for each client , for each month.  We both know what that work is and we both contribute towards it.

I am seeing new clients, getting new work and sorting that out myself.  I am also doing all the more complicated things.

Once we get over a level of income for the business I would like her to take a cut of each new fee income we introduce but she also has to take a drop in income if we lose clients.   She will be guaranteed to not fall below the set amount she is paid just now.   We are getting quite close to a level now where she will be taking a cut.

I've tried to be fair.  I've spent years working in an office with 4 weeks holiday, tied to my desk job 9 to 5.   I'm hoping that this total flexibility will build up a loyalty between the two of us and so far it is working really well.

My concerns are that

1. I don't want any comeback that she may be classed as an employee further down the road.

2. Although I want to give her a cut of new income, I don't want that to be anything like the cut I am getting and I am not sure how to make this work, whether by percentage or another method.

3. I've mentioned my thoughts in brief to her and told her that I will need to have a formal agreement drawn up.  She started talking about wanting to see my accounts further down the line and maybe making the business a limited liability partnership at a later date.   That is not really what I want though.  I want to retain all control myself and keep the figures to myself perhaps until I am ready to retire.   Is there any way I can do this.  I don't really want the salaried partner route as I want her to take some risks and rewards, but at the same time I want full control and the ability to end the relationship if something goes wrong.  

I am beginning to think now would she be better as an employee with commission or could I treat her as self employed, not a partner, but getting a commission?  I don't really want her as an employee with all the additional costs to me if I am then giving as much holiday as she wants and total flexibility.

Any ideas appreciated.  I want to be fair and let her earn a lot but I don't want loss of any control as I have put a lot of my own effort into getting my business where it is just now and I am not prepared to share that just yet.

 

Replies (16)

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By Accountant A
27th Aug 2018 16:12

Quote:

1. I don't want any comeback that she may be classed as an employee further down the road.

I think that ship has sailed.

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By andy.partridge
27th Aug 2018 16:18

What are the circumstances you have not divulged that would cause you to think she is not an employee?

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Replying to andy.partridge:
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By Accountant A
27th Aug 2018 16:22

Quote:

What are the circumstances you have not divulged that would cause you to think she is not an employee?

And is the "self-employed" assistant appropriately insured, MLR compliant and acting the right side of her professional body's rules? (And, indeed, the OP's PI.)

Thought not.

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ALISK
By atleastisoundknowledgable...
27th Aug 2018 16:42

She’s already an employee, with a very generous employer. Sounds like you want to give her a base salary with commission (if she can’t earn less than what’s she’s on now even if you lose loads of clients, what else is it but that?).

Stay as a sole trader, open a PAYE scheme for your 1 employee on base +commission, then in 10years hopefully everything will have worked out for you to sell to her.

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Replying to atleastisoundknowledgable...:
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By Accountant A
27th Aug 2018 16:53

Quote:

She’s already an employee, with a very generous employer.

All we know is that the assistant is paid "a fixed sum each month". Not sure whether that is a "very generous" sum or otherwise. Presumably she isn't getting the pension provision she is entitled to as an employee - or indeed the benefit of NICs.

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Replying to Accountant A:
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By andy.partridge
27th Aug 2018 17:06

I understood she is paid a sum that is more than her hourly rate x number of hours worked.

Reading between the lines, I think the OP is more than a little emotionally involved.

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Replying to andy.partridge:
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By Accountant A
27th Aug 2018 17:10

Quote:

I understood she is paid a sum that is more than her hourly rate x number of hours worked.

Quite possibly, absent any numbers though, I wasn't sure how someone had arrived at the conclusion the assistant's treatment was "very generous". I know, I'm a sucker for facts.

Quote:

Reading between the lines, I think the OP is more than a little emotionally involved.

You might think that; I couldn't possibly comment ....

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Replying to Accountant A:
ALISK
By atleastisoundknowledgable...
27th Aug 2018 17:33

Quote:

Quote:

She’s already an employee, with a very generous employer.

All we know is that the assistant is paid "a fixed sum each month". Not sure whether that is a "very generous" sum or otherwise. Presumably she isn't getting the pension provision she is entitled to as an employee - or indeed the benefit of NICs.

Can have as much holiday as she wants, can work as much or as little as she wants, doesn’t matter whether she or her ‘boss’ does the work as long as someone does, commission in new leads irrespective of whether she does anything for that lead (pre or post engagement).

Base salary could be £1, but if I did zero work, the above would all fit. How’s that not generous? Plus in 10 years she’s going to be given a ready-made practice at (I admit that I’m guessing here), less than MV.

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Replying to atleastisoundknowledgable...:
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By Accountant A
27th Aug 2018 17:53

Apologies, I didn't realise you were the OP.

On that basis, I am leaning more towards andy.partridge's suggestion that this might be less an accounting assistant and more a friend with benefits.

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Replying to Accountant A:
ALISK
By atleastisoundknowledgable...
27th Aug 2018 18:21

Quote:

Apologies, I didn't realise you were the OP.

Nor did I.

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By Manchester_man
27th Aug 2018 19:30

I'm sure you won't have any comeback as regards her being viewed as an employee, assuming she also works on a similar basis for other accountants, has pi insurance etc etc etc

Has anybody thought this could be a wind-up?

If not, then I agree with Andy Partridge - emotionally involved. Sound like she's got you right where she wants you, figuratively of course!

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Out of my mind
By runningmate
28th Aug 2018 14:16

Call me a cynic, but I see her walking off with a load of clients in the not too distant future .......
RM

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