PAYING PAYE

Geoff is a joiner. He makes furniture, bookshelves and cupboards. Business has boomed since he started and he was working 24/7. With four small children his wife complained that she was seeing too little of him and needed help with the kids.

Under real pressure, Geoff got talking with a chap he knew who worked for a rival joinery business. 'I want £400 a week take home pay, then I'll come to you,' the fellow said. Geoff jumped at the chance and for a while all was well. The pair worked well together and every Friday, Geoff gave his new assistant a cheque for the agreed £400.

Then one day he met his accountant. Geoff discovered that to give his assistant £400 per week take home pay was fine, but he'd have to pay his employee's tax and national insurance payments to HMRC. The accountant worked out the figures and Geoff found himself with a £3,900 bill he wasn't expecting.

Moral: Always take advice before taking on your first employee.