Taking The Proverbial

S

Songsheet

At the Start
Joined
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Dunno whether it's a real sign that our economy is definitely not as rosy as we're led to believe but I've noticed that both in my 'day job' business (e-learning software company) and in the equine one, folk are definitely a lot slower in paying their debts.

A particularly annoying example has been Scarvagh Stud - to whom I sold a mare back at the beginning of May and who, having been rung by me three times a wek for past two months, have just finally rung me to say that they are definitely mailing me a cheque today.

Of course, they said this a month ago, so we shall see but they are one stud that won't be getting any mares from me in the future. And the amount of money in question was a poxy sum to boot!
 
Songsheet, it is definitely a sign of the times. I think alot of people in many different businesses are currently finding it very hard. We have taken on a few new suppliers recently who cannot believe how quickly we pay. We have always been lucky that we have had the available funds (not always the case mind you), but so many companies we know are now really struggling. We frequently have suppliers arriving at our door (even TNT) to collect their cheques to save a few hours as we post them out 1st class.

Some worrying times ahead for many companies and businesses I think and of course, for their employees. :blink:

I heard on the radio this morning that over half the holidays taken this year were paid for on credit cards at an average of £800 per person. I hate to think how many billions are now owed on credit cards now, and coming up to Christmas, this figure can only really go one way. :brows:
 
Songsheet, there are some who think being self employed is a breeze, work when you want, as many holidays as you want, don't pay tax etc.

With hindsight I would still make my way alone but with changes and mostly to do with cash flow.
What happened with me was that I wasn't hard enough re stating progress payments and pushing for final payment hard enough so, I just got more and more angry, blew my top and then just rang them all up asking when I was going to get paid, they knew I was angry and most paid up.

One cheeky b*****d actually said to me " you'll get it when I want to give you it "
he was a lot bigger than me :huh: the tw*t and he knew it.
I went around to his place when I knew he was at work and talked it over with his wife and received my money a few days later.
She was really nice and down trodden, given the chance, I'd have sh***ed her to get my own back on him. :P
 
Originally posted by Lee Chater@Sep 7 2006, 04:14 PM
She was really nice and down trodden, given the chance, I'd have sh***ed her to get my own back on him.
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I blame this quasi-bartering system for the economic downturn
 
Working for yourself definitely has it's plus sides, but the lack of holidays, long hours, the stupid amounts of tax you pay on any profit does make it all seem a continually uphill struggle. Staffing is also a major problem plus trying to get people to pay you. We made a conscious decision to stay as a small company, take on no new customers, (keeping just the ones that pay on time) and run a very tight ship. The Labour government seems to take more taxes than any other <_< , and it does make you question whether it is all worth it, especially when you come up against small minded people that feel they have power because they owe you money and they decide when you can have it - just as Lee describes.
 
Originally posted by Kathy@Sep 7 2006, 05:50 PM
The stupid amounts of tax you pay on any profit does make it all seem a continually uphill struggle..........We made a conscious decision to stay as a small company...........The Labour government seems to take more taxes than any other
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Kathy, the tax on profits (corporation tax) is at its lowest level since 1973. It is particularly good for small companies.

Tax on profits for large companies (taxable profits above £1,500,000) is currently 30%. For small businesses (profits at £300,000 or below) it is 19%. On profits between £300,001 and £1,500,000 there is marginal relief of 11/400.
 
I'm self-employed (well, my tax accountant said I had to be classed as that, since 'breeding horses is not your hobby, is it? You're hoping to make money from it, right?') and that nice Mr Taxman sends me a luvverly rebate every year, to pay back the tax he whacks off me by mistake. It's much better than being non self-employed so far! :D
 
That may be correct Brian, (I don't get invoved too much in the actual figures) BUT you when you try taking out the profit out the company, the total exceeds 50% tax, (corporation, NI and personal tax) so for every £1 profit, you get taxed for approx 51% - depending on how you try and take the money out !

I just hate the thought of every £1 profit we make - approx 51p goes in taxation. h:)
 
I have always read that it is the big companies that are the worst payers, the very best which I can vouch for are the OAPs'... it usually only takes one threat :P
 
As Desperate Dan wil tell you, your estimate of of 51% isn't right, similar to your assertion that we are at the highest levels of tax for years. Let's say that the owner of a company draws a salary of £40,000 a year. Personal tax and NI will amount to somewhere between £8k and £12k, say, depending on the person's allowances. There will be no double taxation as the company will offset the whole of that salary, along with any others, plus any NI and pension contributions against its profits. So the taxed salary is not paid out of taxed income.

If you are talking about money that is taken out as dividends, then small company owners are at an advantage with dividends when compared with ordinary investors in equities. Also, there is no NI chargeable on dividends taken from the business either.

There are many (legitimate) ways in which the owners of small companies benefit from allowable expenses which can be offset agaisnt tax - some people almost manage to live on the company.

One final thing - no company pays tax unless it is trading profitably. It's a bit like staff I know who, when a substantial bonus was paid to them, immediately said "Look at the bloody tax I've had to pay!"
 
Kathy - fire your accountant immediately. If what you say is true you are gullible or (s)he is incompetent. But stop blaming business conditions.

For anybody interested - my company uses DSO (Days Sales Outstanding) as a critical health indicator in our business. Our objective is <39 days and we are at about 35 now. This is a tricky topic, we often surrender a sale to a competitor because we won't allow >30 days net. Period. And if we have a customer that drifts past 45 we immediately put them on credit hold. It's probably why we have one years revenue as cash on the balance sheet. (I know, I know).

I know the late lamented Aldiniti (why on earth did she leave?) was looking for business advice recently - this is a critical issue . Enforce your terms and conditions as much as you strategically and pragmatically can.
 
Brian, with all due respect it is clear that you have never been an owner/operator/manager of your own company (please correct me if I am wrong), as if you had, you wouldn't have quoted the employee figures that you have. An owner/manager will pay 19% corporation tax minimum as the 10% rate has now been abolished and will then pay maximum rate tax on dividends once into the higher rate band. The lower rate band is set at such a paltry rate that it is not worth mentioning in this context. You are correct that there will be a tax credit on pension contributions but who in their right minds would trust that these days. I am personally aware of several cases where individuals have fallen foul of the constantly moving target for retirement date and therefore right thinking individuals are probably looking elsewhere.

I fully stand by my 51% figure as clearly drawings taken from the company in excess of £35k per annum by the normal means would attract 40% tax plus NI and employers NI - taking this total in excess of the 51% I quoted.

If you have a proven means whereby an owner/operator could draw profits at less than 51%, I for one would be thrilled to learn it, and I am sure so would a few others. :o I would of course be willing to sack my accountant if I have been paying too much tax over a prolonged period of time, and I am sure I could pay you a few quid in commission for any advice forthcoming. :)
 
Originally posted by Kathy@Sep 7 2006, 11:03 PM
Brian, with all due respect it is clear that you have never been an owner/operator/manager of your own company (please correct me if I am wrong
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I am happy to correct you. In fact, I am still involved in one of them.
 
I will take these messages long to my accountant's and see what they say. I always remember the discussion on here about horse training and the VAT element, so please don't be offended when I don't always agree with what is put up on this forum as always being 100% correct!
 
Originally posted by Kathy@Sep 8 2006, 12:55 PM
I always remember the discussion on here about horse training and the VAT element, so please don't be offended when I don't always agree with what is put up on this forum as always being 100% correct!
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Kathy, I was right about the VAT and I'd just like to point out that Desperate Dan is likely to be right - as he works for the Inland Revenue (now HM Customs & Revenue) as a tax collector.
 
No offence Brian, but I would be very surprised if my company accountant, and the tax inspectors that have visited our premises have been wrong for so many years. So Desperate Dan, or no Desperate Dan, let's just all agree to differ.

As for VAT where racehorses are concerned, just don't get me started on that subject, <_< as I know exactly where I stand on that one, and how a few people on this forum appeared to deliberately try and muddy the water at the time. That is all water under the bridge now, but after that debarcle of a discussion, I think I know not to get into discussions with those that may, at that time, have had a personal agenda.

I will say no more on the subject!
 
Originally posted by Kathy@Sep 8 2006, 06:08 PM
But after that debarcle of a discussion, I think I know not to get into discussions with those that may, at that time, have had a personal agenda.
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Not me in there though?
 
Originally posted by Kathy@Sep 8 2006, 06:08 PM
No offence Brian, but I would be very surprised if my company accountant, and the tax inspectors that have visited our premises have been wrong for so many years. So Desperate Dan, or no Desperate Dan, let's just all agree to differ.

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He does support Everton, so that may disqualify him...
 
Being treated as a credit card? How about being treated like a cashpoint?! A friend came out to stay for 10 days over 6 months ago - turned up with £50 spending money for the duration and let me pay for everything, even saying I had to pay after their £50 had run out as they had "no more money". Not only that, they borrowed cash to pay for the trainfare back from the airport to home. Now, over 6 months later no money has been paid back - despite asking and being promised a cheque, as well as initially being promised a sum "when I get paid" to help towards costs paid when they were out here. What would you do?!

I'm getting fed up of being so trusting - I tend to feel awkward asking for things back hence have lost track of the amounts of CDs, DVDs and books I have lent out never to be seen again...
 
Know the feeling, Kathy, I'm sorry to say. Do you know anyone who lives near this soon to be ex-friend, who the friend doesn't know? Ask them to dress up in dark clothing, carry a clip board with some papers on it, and call on them. "Bert Jones? (Or whatever the appalling pal's name is.) I represent Thumpitt & Basher, Bailiffs. We are instructed by Miss Kathy... etc, etc, to collect £500 on her behalf, or seize goods to the equivalent value." Wave old school certificate at your pal's nose and shove themselves into their abode. If nothing else, it'll fwighten them for a while!

You could probably take the 'pal' to a Small Claims Court - worth asking your solicitor about it. Or trying a letter from your solicitor.
 
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