Thursday 18 October 2012

Taxing the accountant…



The furore over the use of personal services companies in the public sector and the BBC shows no sign of abating (although it has just been pushed off of the tax news front pages by the story that Starbucks has paid no UK corporation tax for the last three years). Sadly the discussion does not seem to be able to move beyond comparing the 20% small companies corporation tax rate with the 50% higher income tax band.

In reality it is far from simple to do a true like for like comparison as there are a number of tax rates that need to be taken into account at various points in the calculation depending on individual circumstances. In case anybody is interested they include 2%, 10%, 12%, 13.8%, 20%, 32.5%, 40%, 42.5%, 50% and 62.5%.  

This has been amusingly illustrated by the fact that three eminent tax commentators have got themselves in a twist over calculating the potential savings that can be achieved through using a personal service company. One even stated that in certain circumstances individuals operating in such a way can end up paying more to HMRC (that is presumably the case when they fall foul of the IR35 regime and have to pay penalties and interest).

I won’t name these people to save them any embarrassment but if accountancy experts are struggling to make a sensible calculation under current tax legislation, what chance does the average taxpayer, or even a hard pressed employee of Her Majesty’s Revenue and Customs, actually have?

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Typical! You do a blog about Justine Greening, and how she is using her accountancy skills to enhance her role as a Cabinet minister, when before you know it her old department is embroiled in a scandal about how it failed to make the numbers add up when awarding the west coast rail franchise.

It has since emerged that an excel error made by a DFT minion  seems to have been the main cause of the problem. That in itself is not a surprise as too many people still seem to implicitly trust anything that gets produced on a spreadsheet.

However what really struck me was that such is the turnover of ministers in the Department of Transport that it was possible to point the figure of incompetence at any number of parliamentary individuals, who of course all duly denied any culpability.

To be fair to our elected representatives (as you have to occasionally) it seems unreasonable to expect them to grasp the complexities of their departments in the short time they seem to occupy the portfolio. Equally, to be fair to the departmental minions, it must be difficult to chop and change the way you do things in order to satisfy the latest incumbent. But of course the whole process is terribly unfair on the poor saps that have to pay for the whole thing i.e. you and me (but apparently not Starbucks…..).

Meanwhile I am going back to check my spreadsheets yet again….

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Grateful thanks to all who have supported my British Swiss Marathon Challenge so far. I successfully completed the first leg in London in a better than expected time of 1:52:42 and am now busy training for the Lausanne half marathon in a week or so’s time. You can still sponsor me at


Once again, thank you.

Wednesday 10 October 2012

If you liked 50 Shades Of Grey….



…you may not be the biggest fan of my finance based blog. Not that I would make any assumptions about the readership of the Enterprise Britain or make any judgements as to its literary tastes. It is just that whenever I look in a bookshop now it seems that almost everything is boasting that if I liked 50 Shades Of Grey I would love (insert suitable title here). Maybe it would help if I actually read the damned thing….

I do however read a lot of Scandinavian crime fiction and therefore am used to the comparisons with that Lisbeth Salander trilogy that began with “The Girl With The Dragon Tattoo (although I think they should really say “If you didn’t manage to finish that Stieg Larsson book then you’ll definitely enjoy reading….”).

The desire to make comparisons with the latest hit product, be it in books or music or film, is nothing new. The 50th anniversary of the release of “Love Me Do” is a reminder of what happened when The Beatles hit the big time. Having suddenly discovered that groups with guitars weren’t actually “on the way out”, record companies rushed out and signed virtually any young band with a six stringed instrument or two. If they hailed from that city on the banks of the River Mersey then so much the better.

Cashing in on the latest big hit is a proven sales driver albeit one with diminishing returns as another new craze or fashion emerges. In many ways it is a sign of laziness. The real talent is identifying that new craze at the right time and riding the wave profitably for a long as possible, while keeping a careful eye out for the next big thing.

Of course in our own businesses we never jump on the latest bandwagon to draw attention to our services do we? Everything we offer is totally original and in no way a copy of a much better product isn’t it?

Clearly we should be working harder on what makes us different rather than pretending to be the same as something that has worked before. If we don’t I guess we we will continue to be greeted with bookshelves groaning with “mummy porn” or “scandi crime” titles while doing our best to find something different and original.

Mind you if you can’t beat them, maybe you have to join them.

“If you liked the way your accountant prepared your statutory accounts and tax computation, then you’ll love the way your part time finance director takes care of all of your business financial management leaving you free to do what you like doing while making more money with less hassle.”

It’s catching isn’t it? Possibly needs a bit of work though…..

Wednesday 3 October 2012

The British Swiss Marathon Challenge….



A little indulgence if I may. This Sunday I shall be running the Royal Parks half marathon in London. In three weeks’ time I shall be running another half marathon in Lausanne. Hence the British Swiss marathon challenge, one half of which will be run in the UK and the other half in Switzerland.

Why I am I doing this? Well clearly I would like to raise some money for a few charities that are dear to my heart and this is an excellent opportunity to do so.

Half of any money raised will be donated to Operation Smile, which exists to provide life changing facial surgery. My daughter was lucky enough to benefit from our NHS when she underwent her own jaw surgery earlier this year but children in other countries are not so fortunate and a remarkable transformation can take place for as little as £150.

The other half will go to two locally based charities. I have had a connection to  Shooting Star Chase  for many years and am pleased once again to have the opportunity to support the work that they do with children with life limiting conditions. Equally White Lodge is a long established charity that provides a range of creative activities for disabled people of all ages and their families and carers that I have previously supported through the amateur dramatics group I am involved in.

However I guess I am also doing it because I can. I may not be in the first flush of youth but I am reasonably fit and a half marathon is still within the boundaries of what might (laughingly) be called a “fun run”. OK I have had to work hard and train in order to be in the right condition to complete both half marathons, and it has not all been plain sailing, but once I decided that this was something I wanted to do, I have remained focussed on crossing both of the finishing lines, hopefully in a reasonable time.

I think that rising to challenges is at the heart of what we all do as members of Enterprise Britain. Whether personal or business it is the determination to overcome all obstacles in the pursuit of an achievable goal that is the key factor in how successful you are.

It is obviously in this sporting “annus mirabilis” that both cities have strong Olympic links, London having held an extremely successful event in the summer, as well as being the only city to host three Olympic Games, while Lausanne is home to the International Olympic Committee.

I know everybody is now inundated with requests for sponsorship, but as we all know in life, if you don’t ask you don’t get. If anything that I have written above strikes a chord, or you are feeling particularly generous, then please feel free to go to http://uk.virginmoneygiving.com/britishswissmarathonchallenge where you can quickly and easily sponsor me. All amounts greatly appreciated.

Thank you for listening. Normal service will be resumed next week….