Some words of wisdom from Dale Carnegie - not tax but worth reading about!

How to Win Friends and Influence People

This is Dale Carnegie's summary of his book, from 1936

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Table of Contents

1. Fundamental Techniques in Handling People
2. Six Ways to Make People Like You
3. How to Win People to Your Way of Thinking
4. Be a Leader: How to Change People Without Giving Offense or Arousing Resentment

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Part One

Fundamental Techniques in Handling People

1. Don't criticize, condemn or complain.
2. Give honest and sincere appreciation.
3. Arouse in the other person an eager want.

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Part Two

Six ways to make people like you

1. Become genuinely interested in other people.
2. Smile.
3. Remember that a person's name is to that person the sweetest and most important sound in any language.
4. Be a good listener. Encourage others to talk about themselves.
5. Talk in terms of the other person's interests.
6. Make the other person feel important - and do it sincerely.

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Part Three

Win people to your way of thinking

1. The only way to get the best of an argument is to avoid it.
2. Show respect for the other person's opinions. Never say, "You're wrong."
3. If you are wrong, admit it quickly and emphatically.
4. Begin in a friendly way.
5. Get the other person saying "yes, yes" immediately.
6. Let the other person do a great deal of the talking.
7. Let the other person feel that the idea is his or hers.
8. Try honestly to see things from the other person's point of view.
9. Be sympathetic with the other person's ideas and desires.
10. Appeal to the nobler motives.
11. Dramatize your ideas.
12. Throw down a challenge.

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Part Four

Be a Leader: How to Change People Without Giving Offense or Arousing Resentment

A leader's job often includes changing your people's attitudes and behavior. Some suggestions to accomplish this:

1. Begin with praise and honest appreciation.
2. Call attention to people's mistakes indirectly.
3. Talk about your own mistakes before criticizing the other person.
4. Ask questions instead of giving direct orders.
5. Let the other person save face.
6. Praise the slightest improvement and praise every improvement. Be "hearty in your approbation and lavish in your praise."
7. Give the other person a fine reputation to live up to.
8. Use encouragement. Make the fault seem easy to correct.
9. Make the other person happy about doing the thing you suggest.

How to divert your income and pay less tax!

If you are a higher rate taxpayer (like more and more people nowadays!), you may be able to reduce your taxes by transferring some of your income to others, so that the income can be taxed at a lower rate of income tax or not be taxed at all!

It sounds reasonable, doesn’t it? (Especially if good old wife or husband does some work for the business, wouldn’t it make sense to reward them by transferring some of your shares in the company to her or make her a partner in the partneship or allocate some rentals from a property lettings business to her?)

The problem is that the taxman doesn’t like arrangements which he believes were made just with tax avoidance in mind. If the taxman thinks so in your case, he will most definitely disallow the transaction and treat the income as yours.

To escape this nasty piece of legislation, you need to make sure you plan and organise your affairs the proper way. Certain things work and others don’t.

For example, outright gifts might work. But, their presence might not be enough to steer you away from trouble. As the taxman has made it clear in the following statement: -

“it is essential to look at the whole arrangement. This could include a series of transactions, some of which may be commecial or involve outrright gifts between spouses and some others not. If the overall effect of the whole arrangement is to transfer income from one individual to another, the settlements legislation is likely to apply”.

Effectively the above stance of the Revenue is a “catch-all” attempt by the taxman directed towards scaring people from planning their tax affairs in a more tax-efficient way for them.

To sum it up, you can reduce the risk of being caught and stay on the safe side by ensuring that:
• Do not re-allocate income without any corresponding quid prop quo,
• People are getting rewarded in proportion to their contribution in the business,
• Any arrangements are on a commercial basis i.e. not only rewards but also risks of ownership are transferred.

How to grow your business

I was recently reminded of some eternal wisdom coined by marketing guru, Jay Abraham. He states that there are only three ways to grow a business:

1. Increase the number of your customers or clients.
2. Increase their average transaction value.
3. Increase the frequency of their repurchases.

Jay simply says that to grow your business, simply find a way to maximize each one. Moreover, if you can nudge all three a little higher, your growth will be exponential!

To increase the number of your customers, you just need to open up your routes to market. That means meeting more people, networking more productively and effectively, increasing your connections and leveraging your existing relationships for referrals, recommendations and introductions.

To increase their average transaction value, all you need a greater share of their wallet. This is the domain of cross-selling and up-selling, and you do that by going deeper with your relationships.

When you find out where people are hurting, what's causing their pain and what's giving them problems.To increase the frequency of their purchases, simply keep in contact with them.

Find reasons to connect, to stay in touch and to give them reasons to keep coming back. then you will sell more, more often and make more profit:)

Why can't I claim lunches?

Here is a very common question I am asked and Bob Harper of Crunchers has kindly answered it in his blog.

It goes like this......

Many people make the mistake of thinking lunches are tax deductible. Common examples include being away from the office and taking an employee or customer out for lunch to talk business. One of the reasons this issues causes confusion is because people are used to claiming expenses back, either as an employee or from their business.

If you run your own business you can claim the money back from your business. But this doesn’t mean your business will be able to claim the expenses for VAT or tax. The correct treatment depends on the type of expenses and why it was incurred.

Lunches are simple because the tax law is clear. A business can not claim the cost of lunches for VAT or tax. You can claim the money back from your business and the expenses may appear in your business accounts. But the VAT should not be claimed in your bookkeeping and when the tax is calculated at the year-end your Accountant will add back the expense.

The good news is that there is one exception - Christmas lunches. At the time of writing a business can claim the full cost up to £150 per head. And, it doesn’t have to be a Christmas lunch. You can have more than one event but be careful not to exceed the limit. If you go over by just £1 everyone will be taxed personally on the full amount. Not something you want to wake up to in the New Year!

To read more of Bob's Blogs click here

Guilty until proven innocent

Well HMRC are up to their tricks again. Ken Frost has been writing about it in his blog.
this also links to a great story from journalist Nick Brighton whose blog is here.

Read on - and BE AFRAID!

Seriously though - any client of mine should take up the offer of tax investigation insurance which we offer. We make no money from this and I even bought it myself!