Xero have announced that they're migrating from a "one-size-fits-all" software application to a multi-level application.
Put simply, smaller businesses can now pay a reduced fee (here in the UK that would be £12 per month instead of £19 per month), but any customers paying that reduced fee can only enter 5 sales invoices per month, 5 purchase invoices per month, and 20 bank transactions per month.
And businesses that need multi-currency would pay £24 a month.
Reading the comments, I think these prices apply to new users signing up after 11th October 2009. Existing users would continue to get multi-currency as part of their package.
I'm not sure what I think about that.
In principle I'm all for paying for only what you need. It wouldn't make sense to pay for stock control if you're running a service-based business, for example. But I'm not sure I like how Xero have chosen to draw the boundaries.
Certainly I'm not sure that capping the number of transactions for micro businesses is a very good idea. Some small businesses would fit comfortably, for example a small IT contractor who has only 1 or 2 customers and sells his/her own services so has very few purchase invoices. But others would not. My own company quite often has more than 5 sales invoices to issue a month. I'd be snookered for the smallest plan if I were on Xero.
And I'm also not convinced that multi-currency is such an optional extra any more. Ask me a few years ago and I'd have said yes. But plenty more businesses now have customers abroad who have to be invoiced in their own currency. Not all overseas businesses are happy to be invoiced in £ sterling. I've had to issue 2 invoices in US dollars before now. That means I'd also be snookered for the medium plan on Xero. I'd have to pay £24 a month instead of £12. That's an extra £144 a year. Which, for a small business, is not to be (atishoo)* sneezed at.
Personally, I prefer FreeAgent's pricing structure, whereby the monthly amount paid is determined by whether your business is a sole trader, partnership/LLP, or limited company. It's 99.9% certain that a limited company will need to be able to produce dividend vouchers, and a sole trader won't - so they're in for a company and out for a sole trader.
Disclosure: FreeAgent is a customer of mine.
* Yes, I really do say "atishoo" when I sneeze. Honest.
Monday 28 September 2009
Monday 21 September 2009
Staff earning tips - did you know...
From CCH's latest e-CPD update (summarised in my own words):
If you're working in a restaurant / bar / bistro, and tips are paid to you directly by the restaurant / bar / bistro's customers, you have to declare that income on a Self Assessment Tax Return every year and pay tax to HM Revenue.
But if your employer collects all the tips and shares them out between you and your colleagues, the employer has to operate PAYE on the tip money, so you don't have to worry about it.
And if someone other than your employer collects the tips and shares them out, that person may be a "troncmaster" who counts as an employer in his/her own right and so has to operate PAYE.
And the National Insurance gets even more complicated.
Crikey... and the bar staff are probably only trying to earn a few quid to help them get through university without a gi-normous student loan debt to pay off.
Why does it have to be so complicated?
Because declare any income tax-free and you run the risk of other income being falsely declared as that - and other complications. For example:
If tips were tax-free... then restaurateurs would pay their staff NMW (because they have to)... and anything else paid to staff would be classified as tips... and then the staff would have a job to get a mortgage because their P60 would show only a fraction of their income... and you're in a Gordian knot.
So in this case, perhaps it is easier to say that if staff collect their own tips, they must declare that as self-assessment income. But I hope that restaurateurs who let their staff do that, warn them that they have to do tax returns...
If you're working in a restaurant / bar / bistro, and tips are paid to you directly by the restaurant / bar / bistro's customers, you have to declare that income on a Self Assessment Tax Return every year and pay tax to HM Revenue.
But if your employer collects all the tips and shares them out between you and your colleagues, the employer has to operate PAYE on the tip money, so you don't have to worry about it.
And if someone other than your employer collects the tips and shares them out, that person may be a "troncmaster" who counts as an employer in his/her own right and so has to operate PAYE.
And the National Insurance gets even more complicated.
Crikey... and the bar staff are probably only trying to earn a few quid to help them get through university without a gi-normous student loan debt to pay off.
Why does it have to be so complicated?
Because declare any income tax-free and you run the risk of other income being falsely declared as that - and other complications. For example:
If tips were tax-free... then restaurateurs would pay their staff NMW (because they have to)... and anything else paid to staff would be classified as tips... and then the staff would have a job to get a mortgage because their P60 would show only a fraction of their income... and you're in a Gordian knot.
So in this case, perhaps it is easier to say that if staff collect their own tips, they must declare that as self-assessment income. But I hope that restaurateurs who let their staff do that, warn them that they have to do tax returns...
Tuesday 15 September 2009
And here's why the tax system needs simplification
I was doing some research for a client into Inheritance Tax and happened upon the exemption for gifts in consideration of marriage or civil partnership.
HMRC's website explains how much parents, other relatives, and anyone else, can give a couple when they marry, without the gift being counted as part of the giver's estate for Inheritance Tax.
What made my eyes pop was that the gift has to be promised "on or shortly before the date of the ceremony" to qualify for the exemption.
It can be paid over before or after the ceremony, but it must be promised before the ceremony or the exemption won't apply.
That astonishes me. What if, for example, an aged grandparent suffering from Alzheimer's Disease remembers only when the newlyweds visit her after the honeymoon that she hasn't told them about the money she plans to give them? That gift would not qualify for exemption.
It's also such a pettifogging little rule. I can't honestly see what difference it makes if the gift is promised before or after the ceremony, in logical terms.
But then, who said tax was logical.
HMRC's website explains how much parents, other relatives, and anyone else, can give a couple when they marry, without the gift being counted as part of the giver's estate for Inheritance Tax.
What made my eyes pop was that the gift has to be promised "on or shortly before the date of the ceremony" to qualify for the exemption.
It can be paid over before or after the ceremony, but it must be promised before the ceremony or the exemption won't apply.
That astonishes me. What if, for example, an aged grandparent suffering from Alzheimer's Disease remembers only when the newlyweds visit her after the honeymoon that she hasn't told them about the money she plans to give them? That gift would not qualify for exemption.
It's also such a pettifogging little rule. I can't honestly see what difference it makes if the gift is promised before or after the ceremony, in logical terms.
But then, who said tax was logical.
Cut tax avoidance? Make the whole system simpler
Richard Murphy has published an extract from Unite's policy and a speech made by Derek Simpson, the joint leader of Unite, at this year's TUC.
In brief, Unite put the blame for the current recession squarely on the shoulders of the super-rich and big business who avoid paying their share of tax, then leave working- and middle-class families to pick up the pieces and bail out the banks.
They urge the government to close tax loopholes to prevent such large-scale tax avoidance, rather than cutting spending on public services.
I agree wholeheartedly with that. Cutting spending on public services would make unemployment worse in the short term because scores of public sector workers would find themselves out of work, and would damage the long-term economy, for the reason I've explained below.
At the moment we're seeing economic improvement, but that's only because money has been pumped into the economy. It's like an investor watching the share prices of a company rise and not realising that's only because he's bought a large block of shares.
For long-term economic recovery we need investment in public services, not cuts.
For example, it's education that can help people out of the poverty trap. Cut state education and you damage the chance of an intelligent child from a working-class background being able to achieve good exam grades, a place at university and a fulfilling and well-paid career. And that would damage the long-term economy, because that person, instead of having a well-paid job and paying more in tax as a consequence, could be forced to take a low-paid job and hence pay less tax.
Cutting public spending is not the answer.
Cutting tax avoidance is a much more satisfactory policy.
But I think that rather than a piecemeal closing of loopholes, it's time for the entire tax system to have a gigantic overhaul and be made much more simple.
As I meet with more micro-business clients of my practice, I come to realise even more that the tax system is cumbersome and so complicated that it's become impossible to run efficiently and easily.
Daily there are comments on Accounting Web about mistakes and inefficiency from HM Revenue. To that I say - HM Revenue is not the demon king. They are trying their best (at least the staff at the Cumbria Area, who are very friendly and helpful, are) to operate within a hugely overloaded, hugely complicated system.
We humans have made the world far too complicated for its own good.
To paraphrase a quote from the recent excellent BBC docu-drama about the collapse of Lehman Brothers - sometimes a return to an economy based on "goats and pebbles" seems very tempting.
Though I wouldn't recommend going that far :-)
In brief, Unite put the blame for the current recession squarely on the shoulders of the super-rich and big business who avoid paying their share of tax, then leave working- and middle-class families to pick up the pieces and bail out the banks.
They urge the government to close tax loopholes to prevent such large-scale tax avoidance, rather than cutting spending on public services.
I agree wholeheartedly with that. Cutting spending on public services would make unemployment worse in the short term because scores of public sector workers would find themselves out of work, and would damage the long-term economy, for the reason I've explained below.
At the moment we're seeing economic improvement, but that's only because money has been pumped into the economy. It's like an investor watching the share prices of a company rise and not realising that's only because he's bought a large block of shares.
For long-term economic recovery we need investment in public services, not cuts.
For example, it's education that can help people out of the poverty trap. Cut state education and you damage the chance of an intelligent child from a working-class background being able to achieve good exam grades, a place at university and a fulfilling and well-paid career. And that would damage the long-term economy, because that person, instead of having a well-paid job and paying more in tax as a consequence, could be forced to take a low-paid job and hence pay less tax.
Cutting public spending is not the answer.
Cutting tax avoidance is a much more satisfactory policy.
But I think that rather than a piecemeal closing of loopholes, it's time for the entire tax system to have a gigantic overhaul and be made much more simple.
As I meet with more micro-business clients of my practice, I come to realise even more that the tax system is cumbersome and so complicated that it's become impossible to run efficiently and easily.
Daily there are comments on Accounting Web about mistakes and inefficiency from HM Revenue. To that I say - HM Revenue is not the demon king. They are trying their best (at least the staff at the Cumbria Area, who are very friendly and helpful, are) to operate within a hugely overloaded, hugely complicated system.
We humans have made the world far too complicated for its own good.
To paraphrase a quote from the recent excellent BBC docu-drama about the collapse of Lehman Brothers - sometimes a return to an economy based on "goats and pebbles" seems very tempting.
Though I wouldn't recommend going that far :-)
Thursday 10 September 2009
Fire an exam failer and lose staff loyalty
Hat tip to Dennis Howlett for this link to an article about an accountancy trainee who was fired from PwC for failing some of his ACA exams.
Most of the article focuses on the vitriolic e-mail he sent as he left, which has gone round the world.
Personally I'm less interested in that than in the fact that PwC fired someone who's obviously got a lot of spark and spunk, because he didn't pass his exams.
Whether those fails were at the first time of sitting or not isn't made clear in the article - but if they sacked him for not getting first-time passes then their policies are wildly askew. Because ACA exams are extremely tough.
I failed two of my ACA exams at first attempt (tax and audit). My then employers supported me through that time and helped and encouraged me to try again. On the second attempt I passed - and went on to qualify and, I like to think, to serve that firm loyally for 4 more years after I qualified.
Staff are not perfect beings. They are only human. I think it behoves an employer to help and support them, not trample all over them. It's by helping your staff when they need it that you receive loyal service.
Most of the article focuses on the vitriolic e-mail he sent as he left, which has gone round the world.
Personally I'm less interested in that than in the fact that PwC fired someone who's obviously got a lot of spark and spunk, because he didn't pass his exams.
Whether those fails were at the first time of sitting or not isn't made clear in the article - but if they sacked him for not getting first-time passes then their policies are wildly askew. Because ACA exams are extremely tough.
I failed two of my ACA exams at first attempt (tax and audit). My then employers supported me through that time and helped and encouraged me to try again. On the second attempt I passed - and went on to qualify and, I like to think, to serve that firm loyally for 4 more years after I qualified.
Staff are not perfect beings. They are only human. I think it behoves an employer to help and support them, not trample all over them. It's by helping your staff when they need it that you receive loyal service.
Friday 4 September 2009
Good service from a bad start
I'm sitting in a cafe in Carlisle writing this before I go to meet a client at 10.
My netbook battery was dead so I plugged it into a convenient socket in the cafe.
When the waitress came to take the order, she spotted the cable, and said, "We're not meant to plug things into the sockets".
Being spoken to as if I were a naughty primary school child did get my back up a bit, and I wasn't sure what the socket was there for if it wasn't to be used :-) but I unplugged the computer, explained I couldn't work any more because the battery was dead, and offered to pay for the electricity if she would let me use the socket.
She got a bit flustered and said she wouldn't know how much to charge and they weren't equipped for computer use - so the answer was no.
I decided I wouldn't come to this cafe again.
But after she'd heard that and spoken to her manager, back she came to say OK, I could use the socket and she apologised but said she'd not encountered this problem before.
Up went my hackles a bit higher, I don't like being called a problem! But she quickly backtracked and said "not a problem". By this time I was starting to feel a bit sorry for her, after all she had fixed it for me to use the socket.
And then the manager came over to apologise too and say it really was OK, the reason why the waitress had wanted me not to use the socket was because "we drive them really hard to save electricity", and there would be no charge.
So now I'm perfectly happy to come here again.
They made a mistake but they were big enough to put it right.
And that the manager came personally to explain and apologise is a big plus.
So when I leave here, they'll get a generous tip to help cover the cost of the electricity. One good turn deserves another.
My netbook battery was dead so I plugged it into a convenient socket in the cafe.
When the waitress came to take the order, she spotted the cable, and said, "We're not meant to plug things into the sockets".
Being spoken to as if I were a naughty primary school child did get my back up a bit, and I wasn't sure what the socket was there for if it wasn't to be used :-) but I unplugged the computer, explained I couldn't work any more because the battery was dead, and offered to pay for the electricity if she would let me use the socket.
She got a bit flustered and said she wouldn't know how much to charge and they weren't equipped for computer use - so the answer was no.
I decided I wouldn't come to this cafe again.
But after she'd heard that and spoken to her manager, back she came to say OK, I could use the socket and she apologised but said she'd not encountered this problem before.
Up went my hackles a bit higher, I don't like being called a problem! But she quickly backtracked and said "not a problem". By this time I was starting to feel a bit sorry for her, after all she had fixed it for me to use the socket.
And then the manager came over to apologise too and say it really was OK, the reason why the waitress had wanted me not to use the socket was because "we drive them really hard to save electricity", and there would be no charge.
So now I'm perfectly happy to come here again.
They made a mistake but they were big enough to put it right.
And that the manager came personally to explain and apologise is a big plus.
So when I leave here, they'll get a generous tip to help cover the cost of the electricity. One good turn deserves another.
Thursday 3 September 2009
Putting mistakes right
Chris Barling of Actinic has written a fantastic article on AccountingWeb with 5 top tips for keeping clients loyal.
Sadly you have to be a member of AccountingWeb to read the full article (grr).
So I'd just like to summarise the tips here:
I don't expect everyone - indeed anyone - who I deal with to provide me with a perfect service. That's just not possible. Everyone's going to make a bodge up now and again. We're only human.
What I do like is for people to sort out their mistakes.
My four principles of correcting a mistake:
Sadly you have to be a member of AccountingWeb to read the full article (grr).
So I'd just like to summarise the tips here:
- Under promise, over deliver.
- Stay in touch with your customers.
- Go online.
- Personalise your service.
- Take responsibility.
I don't expect everyone - indeed anyone - who I deal with to provide me with a perfect service. That's just not possible. Everyone's going to make a bodge up now and again. We're only human.
What I do like is for people to sort out their mistakes.
My four principles of correcting a mistake:
- Admit it. Don't try and blag your way out of it or spin the customer a tale, (s)he can see right through you and isn't thinking much of you. And whatever you do don't blame someone else.
- Apologise to the customer.
- Explain to the customer what you're going to do in order to put the mistake right.
- And DO IT. Put the mistake right! No passing the buck and forgetting about it. If you have to ask someone else to correct it (e.g. your supervisor has to authorise a refund at the till) then make sure they do it!
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