This has been an exciting year for WordPress. We’ve grown to power 14.7% of the top million websites in the world, up from 8.5%, and the latest data show 22 out of every 100 new active domains in the US are running WordPress.
We also conducted our first ever user and developer survey, which got over 18,000 responses from all over the world:
We found a few interesting tidbits from the survey responses already, including that 6,800 self-employed respondents were responsible for over 170,000 sites personally, and charged a median hourly rate of $50. In tough economic times, it’s heartening to see Open Source creating so many jobs. (If each site took only 3 hours to make, that’s $29.5M of work at the average hourly rate.)
I talk about this data, and much more, in my State of the Word address which you can watch here:
We know there’s more good stuff hidden in there and we’re open sourcing and releasing the raw information behind it. If you’re a researcher and would like to dig into the anonymized survey data yourself, you can grab it here. (Careful, it’s a 9MB CSV.)
There has never been a better time to be part of the WordPress community, and I want to thank each and every one of you for making it such a wonderful place to be. Now it’s time to get back to work, there’s still 85.3% of the web that needs help.
The annual WordPress conference, WordCamp San Francisco, starts in fewer than 8 hours. The sold out event — three full days of programming for bloggers, developers, theme designers, and professional WordPress users — will be shared with more than 1,000 ticket holders from near and far. If you are one of the many people who wanted to come but couldn’t swing the time off or travel expenses, you should check out the livestream tickets that are for sale. You can even get a conference t-shirt to commemorate your “virtual” participation.
Speakers include members of the WordPress core development team, leaders of WordPress-based businesses, hobbyists, and everything in between. Take a look at the schedules for Friday, Saturday, and Sunday, and if you see something that sounds interesting (how could you not?), buy a livestream ticket. The stream will start at 16:00 UTC on Friday, August 12.
Viewing Parties
Celebrate your own local WordPress community by calling together some friends and having a livestream viewing party. In the case of regular WordPress meetup groups, if you do a viewing party we will have a process after #WCSF is over whereby attendees will be eligible to buy conference shirts if their meetup group organizer confirms viewing party attendance.
Videos from all the recorded sessions will be posted for free on WordPress.tv within a couple of weeks, but watching the livestream allows you to support WordCamp while providing instant gratification. And let’s face it: the best part is that you’ll know what the heck people are talking about on Twitter using the hashtag #wcsf.
We have a fair usage policy so you don’t need to upgrade just because one or two months exceed your Capacity, but where you exceed Capacity continually you should upgrade.
Upgrading, or indeed downgrading, is very easy, log into your account, go to Services and select your new package and the options you want. The new package applies from the beginning of the next calendar month.
You can change as often as you want, but our fair usage policy is designed to avoid this becoming repetitive for small changes in your business.
We have a fair usage policy so you don’t need to upgrade just because one or two months exceed your Capacity, but where you exceed Capacity continually you should change your package.
Upgrading, or downgrading, is very easy, log into your account, go to Services and select your new package and the options you want. The new package applies from the beginning of the next calendar month.
You can change as often as you want, but our fair usage policy is designed to avoid this becoming repetitive for small changes in your business.
Create an account, which is free without any commitment, at this point no payment details are requested. Add your business information so you immediately get free SMS business reminders and access to your own business diary of events.
You can then choose the service that you want from within your account. Go to Services and make your selection, then request sign up.
You complete your payment details only when you’ve decided on the level of service and are ready to get going.
You will be contacted by your Personal Manager to help set up the practical side of getting going.
The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry. Businesses in the construction industry are known as ‘contractors’ and ‘subcontractors’. They may be companies, partnerships or self employed individuals.
The CIS applies to construction work and also jobs such as alterations, repairs, decorating and demolition.
Contractors and subcontractors
Contractors include construction companies and building firms and also government departments and local authorities. Any other business spending more than £1 million a year on construction is classed as a contractor for the purposes of the CIS.
Subcontractors are those businesses that carry out work for contractors. Many businesses act as both contractors and subcontractors.
Monthly return
Contractors have to make a monthly return to HMRC:
? confirming that the employment status of subcontractors has been considered
? confirming that the verification process has been correctly dealt with
? detailing payments made to all subcontractors and
? detailing any deductions of tax made from those payments.
The monthly return can be sent either manually or electronically and relates to each tax month (ie running from the 6th of one month to the 5th of the next). The deadline for submission is 14 days after the end of the tax month. Even if no subcontractors have been paid during a month, contractors still have to make a nil return. All contractors are obliged to file monthly even if they are entitled to pay their PAYE quarterly. There is no requirement to make an annual return of payments made which applied under the previous scheme.
Identification
Subcontractors must give contractors their name, unique taxpayer reference and national insurance number (or company registration number) when they enter into a contract. So long as the contractor is satisfied that the subcontractor is genuinely self-employed the ‘verification’ procedure (explained below) must be followed.
Employed or self-employed?
A key part of the new CIS is that the contractor has to make a monthly declaration that they have considered the status of the subcontractors and are satisfied that none of those listed on the return are employees. HMRC can impose a penalty of up to £3,000 if contractors negligently or deliberately provide incorrect information.
Remember that employment status is not a matter of choice. The circumstances of the engagement determine how it is treated.
The issue of the status of workers within the construction industry is not a new matter and over the last few years HMRC have been making substantial efforts to re-classify as many subcontractors as possible as employees. The courts have considered many cases over the years and take into account a variety of different factors in deciding whether or not a worker is employed or self-employed. The tests which are applied include:
? the right of control over how, what, where and when the work is done; the more control that a contractor can exercise, the more likely it is that the worker is an employee
? whether the worker provides a personal service or whether a substitute could be provided to do that work
? whether any equipment is necessary to do the job, and if so, who provides it
? the basis of payment – whether an hourly/weekly rate is paid, whether there is any overtime, sick or holiday pay and whether or not invoices are raised for the work done
? whether the worker is part and parcel of the organisation or whether they are conducting a task which is self-contained in its own right
? what the intention of the parties is – whether there is any written statement that there is no intention of an employment relationship
? whether there is a mutuality of obligation; that is, an ongoing understanding that the contractor will offer work and the worker accept it
? whether the workers have any financial risk.
As can be seen from the above, there are a number of factors which must be considered and the decision as to whether somebody should be classified as employed or self-employed is not a simple one.
Clearly, HMRC would like subcontractors to be classed as employees, as this generally means that more tax and national insurance is due. However, just because the HMRC think that somebody should be re-classified does not necessarily mean that they are correct.
HMRC have developed software known as the employment status indicator tool, which is available on their website, to address this matter but the software appears to be heavily weighted towards re-classifying subcontractors as employees. It should not be relied on and professional advice should be taken if this is a major issue for your business.
‘False self-employment’ in the construction industry
The government has been looking at the best way to address the issue of what they believe is ‘false self-employment’ in the construction industry. They have concluded, for income tax and national insurance purposes, that they will introduce legislation which deems workers within the construction industry to be in receipt of employment income unless one of three simple, clear and easy to apply criteria is met. These criteria take the form of three questions which ask whether the worker provides:
? their own equipment (other than customary to the trade)
? their own materials
? additional workers to complete the job.
The worker will have to satisfy at least one of these criteria to be regarded as self-employed. The government have been consulting on this issue and the rules are proposed at this time.
Verification
The contractor has to contact HMRC to check whether to pay a subcontractor gross or net. Not every subcontractor will need verifying (see below). Usually it will only be new ones. The verification procedure will establish which of the following payment options apply:
? gross payment
? a standard rate deduction of 20%
? a deduction made at the higher rate of 30% if the subcontractor has not registered with HMRC or cannot provide accurate details to the contractor and HMRC cannot verify them.
HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own computer. The number will be the same for each subcontractor verified at any particular time. There will be special suffixes for the numbers issued in respect of subcontractors who cannot be verified. The numbers are also shown on contractors’ monthly returns and the payslips issued to the subcontractors.
Clearly, these numbers are a fundamental part of the system and contractors have to ensure that they have a fool-proof system in place for obtaining and retaining them. It will also be very important to give precise details to HMRC because, if their computer does not recognise the subcontractor, the higher rate deduction will have to be made.
Who needs verifying with HMRC?
If a contractor is paying a subcontractor they will not have to verify them if:
? they have already included them on any monthly return in that tax year; or
? the two previous tax years.
A payslip?
Contractors have to provide a monthly ‘payslip’ to all subcontractors paid, showing the total amount of the payments and how much tax, if any, has been deducted from those payments. The contractor has to provide this for each tax month as a minimum. Contractors are allowed to choose the style of the ‘payslips’ themselves but certain specific information has to be provided including the:
? contractor’s name
? contractor’s employers’ tax reference
? tax month to which the payment relates
? subcontractor’s name, unique tax reference or specific subcontractor reference
? the gross amount of the payment
? cost of any materials which have reduced the gross payment
? amount of any tax deductions made and
? verification number where deduction has been made at the higher rate of 30%.
If contractors include such payments as part of their normal payroll system, it needs to be clear that although payslips are being generated for those individuals, they are not employees and have clearly been classed as self-employee
Are tax deduction made from the whole payment?
Not necessarily. The following items should be excluded when entering the gross amount of payment on the monthly return:
? VAT charged by the subcontractor if the subcontractor is registered for VAT
? any Construction Industry Training Board levy.
The following items should be deducted from the gross amount of payment when working out the amount of payment from which the deduction should be made:
? what the subcontractor actually paid for materials including VAT paid if the subcontractor is not registered for VAT, consumable stores, fuel (except fuel for travelling) and plant hire used in the construction operations
? the cost of manufacture or prefabrication of materials used in the construction operations.
Any travelling expenses (including fuel costs) and subsistence paid to the subcontractor should be included in the gross amount of payment and the amount from which the deduction is made.
Penalties
The whole system is backed up by a series of penalties. These cover situations in which an incorrect monthly return is sent in negligently or fraudulently, failure to provide CIS records for HMRC to inspect and incorrect declarations about employment status. However, it is expected that two further penalties are likely to be much more common on a day to day basis for:
? failure to send in the monthly return there will be a penalty of £100 per 50 subcontractors (or part thereof) per month
? failure to provide a subcontractor with a ‘payslip’, a penalty of up to £300, plus a further penalty of up to £60 per day for continuing failure.
Paying over the deductions
Contractors have to pay over all deductions made from subcontractors in any given tax month by the 19th following the end of the tax month to which the deductions relate. If payment is being made electronically, the date will be the 22nd, or the next earlier banking day when the 22nd is a weekend or holiday. If the contractor is a company which itself has deductions made from its payments as a subcontractor, then the deductions made may be set against the company’s liabilities for PAYE, NI and any CIS deductions it is due to pay over.
What about subcontractors?
Subcontractors who were registered with HMRC before the introduction of the new CIS will have been transferred over to the new system.
However, if a subcontractor first starts working in the construction industry on a self-employed basis after 5 April 2007, or had a temporary registration card that has expired, they will need to register for the new CIS.
To register, a subcontractor needs to contact HMRC by phone or over the internet and they will conduct identity checks. The rules for subcontractors to be paid gross are broadly equivalent to the previous rules. There is a business test, a turnover test and a compliance test similar to the previous regime.
Subcontractors not registered with the HMRC will suffer the higher rate deduction from any payments made to them by contractors.
The advantages of owning your own business are obvious but so too are the risks.
A franchisee is taking less of a risk than starting his or her own business because they are operating under an established and proven business model and supplying or producing a tested brand name.
Franchising is essentially the permission given by one person, the franchisor, to another person, the franchisee, to use the franchisor’s name, trade marks and business system in return for an initial payment and further regular payments.
Each business outlet is owned and managed by the franchisee. However, the franchisor retains control over the way in which products and services are marketed and sold, and controls the quality and standards of the business.
Advantages
1 it is your own business
2 someone else has already had the bright idea and tested it too
3 there will often be a familiar brand name which should have existing customer loyalty
4 there may be a national advertising campaign
5 some franchisors offer training in selling and other business skills
6 some franchisors may be able to help secure funding for your investment as well as discounted bulk buy supplies.
Disadvantages
1 it is not always easy to evaluate the quality of a franchise especially if it is relatively new
2 extensive enquiries may be required to ensure a franchise is strong
3 part of your annual profits will have to be paid to the franchisor by way of fee
4 the rights of the franchisor, for example to inspect your premises and records and dictate certain methods of operation, may seem restrictive
5 should the franchisor fail to maintain the brand name or meet other commitments there may be very little you can do about it.
The Costs
The franchisor receives an initial fee from the franchisee together with on-going management service fees. These will be based on a percentage of annual turnover or mark-ups on supplies and can vary enormously from business to business. In return, the franchisor has an obligation to support the franchise network with training, product development, advertising, promotional activities and a specialist range of management services.
Raising money to finance the purchase of a franchise is just like raising money to start any business. All of the major banks have specialist franchise departments. You may need to watch out for hidden costs of financing. These could arise if the franchisor obtains a commission on introducing you to a business providing finance or a leasing company for example. Of course these only represent true costs if you could have obtained the finance cheaper elsewhere.
Choosing a Franchise
There are many factors you may need to take into account when choosing a franchise. Consider the following:
1 your own strengths and weaknesses – make sure they are compatible with the franchise
2 thoroughly investigate the business you are planning to buy
3 research the local competition and make sure there is room for your business
4 give legal contracts careful consideration
5 last but not least, talk to us about the financial projections for the business – cash flow, working capital needs and profit projections will form the core of your business plan.
The Contract
The contract will form the basis of all franchise agreements. It should ensure that you run your business along the lines set out by the franchisor. The following areas should be covered:
1 the name and nature of the business
2 the geographical territory where the franchisee can use the name
3 how long the franchise will run
4 the fees (both initial and on-going) that will be charged
5 what happens if the franchisee wants to sell or either the franchisee or franchisor want to end the agreement
6 the terms of the relationship, specifically that the franchisor will provide training, advertising etc and that the franchisee will abide by the rules laid down by the franchisor.
We have a fair usage policy so you don’t need to upgrade just because one or two months exceed your Capacity, but where you exceed Capacity continually you should upgrade.
Upgrading, or indeed downgrading, is very easy, log into your account, go to Services and select your new package and the options you want. The new package applies from the beginning of the next calendar month.
You can change as often as you want, but our fair usage policy is designed to avoid this becoming repetitive for small changes in your business.
If you find you need the optional services just follow the same process to add a new option.
Capacity refers to the number of physical documents we receive and process.
Typically this means purchase invoices, expense receipts, cash vouchers, but if you don’t use automated bank feeds or export your bank statements and email us the file you may have to add bank transactions as well.
To help you keep costs down we provide templates in the form of Excel spreadsheers for you to record sales invoices, daily takings and cash or employee expenses. Each template counts as 1 document becuase we can import the details as one process. People use templates when they dont want to use the online accounting system to input sales or for employees to enter themselves.
Our Capacity calculator can help you select the right level.
