If you only just met i can understand him being carefull as you could be inland revenue.... on the other hand if he was being carefull, he wouldnt have told you about not declaring it all would he.
What you have to remember is that if inland revenue investigate him then there will be a good chance that they will come to you.
I dont know how your paying the £18k and i know its not any of my business, but if your getting a loan, then there is a good chance that the bank may want to see his books - it wont tally up and they wont give you the loan. As said before - none of my business, just wanted to say that for you to think about.
If you do go ahead, you'll need a contract to say that he wont window clean in the next x amount of years within a 10 mile radius of a certain area. It may be illness as to why he is setting up, but its worth covering your back