Thursday, May 29, 2008

Is it time to update your Will?


The Law Society has warned that thousands of Wills could need updating as a result of rising care and nursing fees which force the elderly to sell their assets, in many instances their homes, to pay for care. The home is generally the largest asset left to loved ones.

Andrew Holroyd, Law Society President, said:
"Many people get their solicitor to include their home in their Will but with more people selling up to release capital for care fees, many Wills will be outdated. There will not be a home to leave to loved ones."

Research conducted for the Law Society in October 2007 revealed that 57% of people did not know if they had an up-to-date Will or not.

According to government estimates the average care home fees are £450 a week. For many the level of their pensions will not cover the fees and people in need of care have to make up the shortfall.

For guidance to ensure that your Will is tax efficient please do get in touch.

Thursday, May 15, 2008

Why should you pay me - a professional tax adviser to complete your tax return?

Rather an odd question for a tax adviser to ask you might think?

I was asked recently by someone why they should instruct me specifically to do their tax return which set me thinking...

There are many reasons of course but mainly clients tell me they want to be sure they are doing it right and have not missed anything they can claim ie for peace of mind. Others are just busy people and want to let someone else have the hassle.

Even for pure advisory clients I find the process of completing the return helps identify areas in which a client had not realised there might be savings. Some clients use me as a second opinion on personal and business financial matters. Many clients are in the financial area themselves and they could talk about it with friends and family but some people prefer a more confidential different voice.

I can GUARANTEE I can save tax for any self employed person. A strong claim? Maybe, but if you can prove me wrong I will do your accounts and tax work for one year for FREE!

There is a good article here albeit from a US perspective which explains why you can do better than just using google and online software. But then I would say that wouldn't I?

Tuesday, May 13, 2008

HMRC and HM Customs (VAT) merger

Merging the Inland Revenue and HM Customs - a disaster!
According to its own staff, merging HM Customs and the Inland Revenue has been a disastrous move. The move was a change for the worse said four out of five HM Revenue and Customs staff in a recent survey. More than half said the department would get worse in the next year, with a third saying much worse. Less than one in five would recommend HMRC as a good place to work.

No wonder the service is so poor:( I left there many years ago and it was hardly a happy place to work then!


Tuesday, May 06, 2008

10 myths about self employment

I seem to be moving away from tax tips in my last few posts but since I have been writing this blog I have been finding some other interesting articles written by other bloggers and want to share them with you.

Since most of my clients are self employed I thought this was relevant so read on.............................

1. Self-employed people have to work really long hours.
Many self-employed people work longer hours than employees. Some enjoy their work so much they want to put in long hours. Some set up their businesses in such a way that their physical presence is necessary for income generation. Either way it’s a choice though because you’re the one who decides how to set things up.


Many self-employed people start businesses where they get paid only while they’re working, such as a lawyer who opens a law office and bills his/her clients at a certain hourly rate. When the lawyer is at home, s/he generates no income.

But there’s no law of self-employment that says you have to start a business that only generates income while you’re working. If you start a business like this, you’re really just creating a job for yourself. I prefer to think of self-employment in terms of systems building. You build income-generating systems that generate income for you, systems you own and control. It’s like you own the golden goose, and it does the work of laying the golden eggs.

So working long hours is largely a symptom of the type of business you create as well as your personal choice. If you don’t like working long hours, you certainly don’t have to.

2. The only reason to build a business is to sell it.
This is a favorite statement of Michael Gerber, author of
The E-Myth Revisited and various other E-Myth books. While you can certainly build a business to sell or to take public, you can also build a business to keep. In fact, it’s perfectly valid to build a business, run it for a while, and then simply kill it.

As a self-employed person, you’re free to build whatever kind of business you want. You’re the boss. If you want to build a business to sell, go for it. If you just want an income source that doesn’t require you to get a job, that’s fine too. There’s no rule that says you have to build a business that’s a monument to human greatness.

Many people enjoy serial entrepreneurship. They start a business, run it for a certain time, and then either sell it or close up shop. Then they repeat the process.

You can also run multiple businesses at the same time. This might sound too complicated, but once you’ve been running a business for a decade or more, it’s not that hard to repeat the process and spawn another one. Such variety can be fun if you don’t overdo it.

3. Self-employment is much riskier than getting a job.
Security is a result of control, and self-employment gives you far more control over your income than you have with a regular job. When you’re self-employed no one can fire you or lay you off. Which is more secure — owning your income stream or leasing it? Ownership obviously.
If you need to make extra cash quickly, that’s very tough to do as an employee. But as an owner who controls all the business assets, you have the ability to rechannel resources to increase income in a pinch. Having control makes a huge difference.


Employees take the biggest risk of all. You learn how risky it is when you unexpectedly hear the words, “we’re letting you go,” while the owners enjoy the spoils of record profits.

4. Self-employment means putting all your eggs in one basket.
Ask yourself this: How many people would have to turn against you to shut off all your income? For employees the answer is usually one. If your boss fires you, your income gets turned off immediately. Whether or not it’s justified is irrelevant — you suffer a total loss of income regardless of the reasons. Now that’s putting all your eggs in one basket.


With self-employment, however, you can more easily diversify your income streams and thereby reduce your risk. You have the control necessary to make this happen. Generating different types of income from thousands of customers is a lot more secure than receiving only one paycheck.

5. Being self-employed is stressful.
What’s stressful is not being able to make ends meet, whether you’re an employee or self-employed. But given the same standard of living and income, I think self-employment is less stressful because you enjoy more control. Not having control over your time and your life is stressful. When you have the freedom to say no, you can more easily control your stress.


Self-employment can be very low-stress if you decide to make it so. You can turn your office into a
relaxing place to work. You can set your own hours. If you notice the onset of stress, you can take time off to relax. No one can force you to do anything you don’t want to do.

6. The customer is always right.
If you’re self-employed, feel free to fire customers that cause you grief. Some customers just aren’t worth having.


Carole and I have interacted with many hundreds of customers over the past 4 years, and nearly all of them have been great. But every once in a while, we’ll turn a customer away and refuse to accept any more business from that person. We rarely find it necessary to do so, but it does happen.

I can handle criticism just fine, but what crosses the line for me is when a customer becomes obnoxiously rude, insulting, or threatening. Some people think that if they behave like jerks, any business will bend over backwards to help them. But my customer service motto is: no civility, no service.

If you’re self-employed, there’s no need to do business with people who think it’s their privilege to treat you like dirt. You won’t enjoy having such customers, and you won’t enjoy the types of referrals they send you. Besides, it’s a lot of fun to refer these people to your competitors.

7. Being self-employed is lonely.
Many employees think they enjoy a rich social life when all they do is hang out with their co-workers. That’s fine for starters, but it can get pretty stale after a while. On the contrary I think it’s easier for self-employed people to recognize the need for social activities outside their work. At the very least, this may be motivated by the desire to network and to learn from other business owners.


There’s no need to be isolated and lonely if you’re self-employed as long as you take the time to pursue other social outlets. Personally I love hanging out with other self-employed people. Such people have a certain energy and proactivity that I rarely see in employees.

A regular job provides some built-in socialization, but if you think about it, you’ll see that it’s very limited. An employee can be fired for excessive socializing on the job. But a self-employed person can socialize freely at any time of day.

Self-employment can be wonderful in the early stages of dating, especially if you’re both self-employed. When Carole and I started dating, I would often pop over to her house in the morning and spend half a day with her. This allowed our relationship to progress more quickly, and after six months we moved in together. I didn’t work as hard during that time, but self-employment gave me the freedom to put my social life ahead of my work.

8. Self-employed people have to do everything themselves.
Self-employed people may be responsible for making sure everything gets done, but it’s usually foolish for them to do everything themselves. That would be way too much work.

You don’t even have to design your own system if you can leverage someone else’s.


9. Self-employment is too complicated.
Self-employment can seem complicated because there’s a lot to learn in the beginning, such as accounting, taxes, payroll, legal issues, insurance, etc. It does take a while to learn the basics, but most of it isn’t particularly difficult. Just get yourself a good accountant (me!) and you’ll be off to a great start. If you set things up right, the ongoing maintenance of a business doesn’t have to be a nightmare.


10. You need lots of money to start a new business.
That depends on the business. You can start an online business for very little cash since domain names and web hosting are dirt cheap. We’re talking less than £100 to cover the whole first year.


I used about £2K of my own money to launch my business. The point is simply that you don’t need to pour your life savings into your first business. You do, however, need an intelligent way to provide value to people. As an example the nice thing about an online business is that you can create value (like an article) for a fixed time investment, and technology can deliver that value millions of times over without costing you any extra time or money. You invest a little time in the initial value creation, but you get paid for the ongoing value delivery. Technology does most of the work for a cost that’s virtually zero, but you get paid for its results (significantly more than zero).


In contrast to self-employed people, employees don’t normally get paid for their ongoing value delivery. They get paid a flat rate or a one-time commission while their employer reaps the ongoing rewards indefinitely. Employees are very generous to their employers.
Try it for yourself


Hopefully I’ve helped dispel some common myths of self-employment. Such irrational fears aren’t representative of the reality. Of course the only way to really understand self-employment is to experience it yourself.

I’ve met quite a number of self-employed people in my life, but I’ve never heard any of them say that becoming self-employed was a mistake and that they wished they’d got a regular job instead, even if the business didn’t do well financially. Self-employment is a powerful vehicle for personal growth, and often the greatest value comes from the skills and self-knowledge you gain along the way.

Thanks to Steve Pavlina for this post