February 2008 newsletter

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Year of the double tax return.

Forthcoming events

The Boyscout is working on it. He’s got a new assistant, so stand by.

CGT

The chaos continues. The Chancellor has finally announced his new "Entrepreneurs’ Relief", which is broadly the same (probably?) as the Retirement Relief that Gordon replaced with Taper 10 years ago. There is a technical article on our website, but we don’t know how the rules will actually be implemented. Curiously, the Accountancy profession was in favour of the new rules as a genuine simplification, but that’s now gone out of the window.

www.chrisduckett.co.uk/cgtjan08.html

You Tube?

I’ve had a lovely time in the last few months looking at video clips on various climbing websites. However, there is a more serious business issue in terms of getting your own message out. A good example is the revamped website of the Sage of Bishopswood. If you ever wondered what he looks like, here’s the opportunity to find out: he’s being interviewed by Katie Ledger

www.thestrengthsway.com

The end of credit (as we know it)

Well, it’s being squeezed anyway and the chance of incurring bad debts has definitely risen. With all this accounting information available electronically, it should be easier than ever to check out potential customers. Unfortunately, it’s still far too easy to file fraudulent information at Companies House (as long as the accounts adds up). I was therefore impressed to hear about a service that shares information between its members. Subscription to the service is available on a monthly basis and the Boyscout was particularly excited by their guides on credit control www.top-service.co.uk

Out of office reply

After my recent article on automated e.mail replies, I thought I should give it a go and posted (what I thought was) a harmless message. It caused all sorts of confusion, with various clients assuming I was e.mailing them from Scotland. Whilst this is technically possible, it rather defeats the object of having time off. I’ll try again shortly ­ be warned.

www.nytimes.com/2007/12/13/fashion/13Work.html?_r=2&oref=slogin&oref=slogin

www.scottberkun.com/blog/

Tax returns

In case you’re interested, we filed 410: all but 20 went in electronically. Apparently, the system fell over on the afternoon of 31st January, but we’d finished by then. Bizarrely, nearly 300 returns were filed (electronically) on Christmas Day.

This year (2007/8), the deadline moves to November (2008) for manual returns, but stays at January 2009 for electronic ones. The problem is that if the Revenue doesn’t process your agent authority (a common event), then we can’t file your return. I guess we’ll see some more security breaches before then, so who knows what will happen next?

Website relief

I’d always assumed that the cost of a website qualified for capital allowances in the same way as computer kit/software. However, the Revenue has some pre-internet case law which allows them to treat websites as equivalent to "shop windows" ­ thereby denying relief completely. You will be pleased to hear that the profession has responded with the snappily named UITF Abstract 29. To cut a long (tedious) story short, this says that unless the website allows customers to buy things from you (electronic commerce), then the whole cost should be written off to the P&L account. Stand by to argue.

And, don’t forget all the other changes happening on 1st April ­ particularly capital allowances.

AirCon v CHeating

At about this time last year, rumours abounded that we were in for a hot summer (as a consequence of global warming). Goaded by 100% energy efficient allowances, we asked Alan Meredith of EMS www.emsltd.biz/ to sort us out. He duly obliged, and we then suffered the coldest, wettest summer for years. The aircon was hardly switched on. However, come late 2007 when it started to get cold, we realised that the system is actually a heat exchanger and is more than capable of keeping the office (very) warm. Apparently, it’s cheaper to run than conventional heating, but you can check that with Alan. Presumably, the Chancellor knew all this when he brought in the relief?

Focus & Bill Grimsey

For various obscure reasons (CEO envy?), I’ve been following the career of Bill Grimsey. He performed a stunning turnaround at Wicks, only to be shafted at Iceland/Booker. He’s now taken on the top job at Focus DIY. If you’ve ever wondered how you go about rescuing a company, the following article tells you how to do it

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/17/ccfocus117.xml

And, remember one of my favourite bits of advice:

Q: What do you do if you’re in a flat spin.

A: Stop the flat spin

How to be top (dog)

Executive consultant Heather Dawson set out to find out what it takes to be a successful senior executive so she could write a book about it. The result is "Faster, Faster" and her conclusions boil down to:

• Be in control: the job does not control you because you set your own boundaries
• Create time to think
• Don’t be fazed by uncertainty and ambiguity (that’s what you’re paid for)
• Recognise when you’ve run out of steam (and do something about it)

Simple, as usual.

http://business.timesonline.co.uk/tol/business/movers_and_shakers/executive_movers/article2948591.ece

Or, www.praesta.co.uk

Pension, what pension?

I’ve never made a great secret of my bemusement with the pension industry. What point getting tax relief on the way in if you never see the money again? Pensions experts Mattioli Woods keep sending me newsletters, the most recent of which highlights the fact that the effective rate of tax if you get it completely wrong is 82%. Allegedly (Daily Mail?), Gordon’s pension would require a fund of £3m+, at least double the limit.

Are you invaluable to your customers?

You probably need to be. Theory has it that there are 3 types of customer:

Commodity buyers

They know what they want and how to use it:

• Low cost ­ price is the driver
• No hassle ­ simple as possible

Strategic partner buyers

They want:

• Intimate relationships between organisations at many levels
• Joint projects
• Merging of systems to improve efficiency all round

"I need to make a sound decision" buyers

In other words, they are satisfied that you are competent, but they are not sure what they should be buying/what the problems are.

A good business has the right mix of such customers and just thinking about it is part of the segmentation process. How you set your pricing is harder still.

Original article http://www.raintoday.com/pages/beyond_value_how_to_become_invaluable_to_your_clients.cfm

My view www.chrisduckett.co.uk/marketingforwimp.html

Happiness

Allegedly, modern life forces us to focus on what we don’t have, rather than being grateful for what we do have. Chasing happiness cause misery? Discuss:

http://women.timesonline.co.uk/tol/life_and_style/women/body_and_soul/article3209845.ece

Audit thresholds

As previously mentioned, the audit threshold is due to rise to a turnover of £6.5 million and balance sheet total of £3.26 million. Unfortunately, the new limits don’t take effect until financial years starting on or after 6 April 2008. So, 31st March 2008 accounts years will still get clobbered.

Stage names

As we all know, business is (a) performance, so stage names are mandatory. The Boyscout’s new assistant is from the blue stocking end of the spectrum and, with a nod to popular culture, I’ve named her "Bolly". I just haven’t told her yet. Any brighter ideas, anybody? Ideally, before I get sued.

Peak performance

As you know, I’ve struggled to make the link between the peak performance culture found in sport and its application to real business situations. Arguably, it comes down to a sense of mission and this is pretty hard to sustain over a 40 year career. This is one of the early articles on the subject www.joe.org/joe/1987fall/a1.html

Transparency

The concept of openness in management is very attractive, but it does have its limits. Leaders who communicate paralysing uncertainty can give themselves real problems. Before she died, Anita Roddick, published a good essay on the subject. Worth a look on http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/01/26/ccfifty26.xml

Disclaimer

Only the paranoid survive. At least on TV.

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