"Contact us now"!

The statement is there on the advert and so the customer rings and leaves messages, sends e-mails to the address on the website…. waits…..waits…... and hears absolutely nothing!

What exactly does that say to the potential customer about the business?

Recently, we had cause to call out an electrician because of a major power outage at one of our offices.  We rang five that claimed to offer 24 /7 emergency call outs.   One answerphone told us “we’re away for the holidays” – but didn’t say when they were back! Another just rang out and didn’t even have the facility to leave a message.  In the end only one replied – 48 hours later!

In these tight economic times, a lot of businesses are investing good money in having and building websites, paying for top listing on Yell and the like, or advertising in local papers or magazines in the hope that it will bring them work.  They might as well set fire to all that cash if they don’t monitor the e-mails and voicemails that their promotional activity produces.  Nowadays, with smart phones enabling everyone to be able to pick up emails wherever they are in the world, there is just no excuse for not responding.

Mind you, even when they’ve made contact, will they actually turn up to look at the work that’s on offer?  Sadly many won’t!  A client told us recently of some flooring work they’d needed doing.  Nine emails generated only four responses.  Eventually two bothered to turn up to look at the floor (one more set a date but never arrived leaving the client waiting around) but only one of them provided the pricing information they’d promised.  That’s not much better than a 10% hit rate just to get a price!

Personally, I’d much rather be told someone can’t take the business on at the moment than just be ignored.  To me a non-response is just downright rude.  And it’s so short sighted – I can tell you that a non-response means I’ll never consider that business again!  Worse still, I’m likely to actively tell people not to bother even trying them.

So, the next time you hear a tradesman complaining that they’re struggling for money, ask them how many people they didn’t reply to in the last year.  They’ll probably look baffled, but push them and I suspect you’ll find that they are one of the many that don’t seem to be able to plan a work pipeline.  They do the job in hand and just hope that something comes up for next week. 

By contrast, as we see with loads of our clients, basic courteous communication and a bit of forward planning, combined with some thought about the customer (and potential customer!) generates really positive recommendations to friends, family and colleagues and, as a result, a much more steady income.  A virtuous and profitable circle that starts with a simple response.

HMRC End of Year report: "Must try harder"

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

It was heartening to read that I’m not the only one that feels that the HMRC’s service falls well below what hard-pressed taxpayers (and their advisors) should be able to expect from it. 

At the end of 2014, the Institute of Chartered Accountants surveyed a large number of its tax practitioner members.  Over a third of us felt that HMRC’s performance had declined and over 50% felt it hadn’t changed. The handful that felt it had improved either don’t deal with HMRC very often or have even worse experiences in the past than we have!

The biggest frustration reported is, surprise, surprise: HMRC’s inability to get things right first time.  How many apologies have we heard that they’ve sent out batches of thousands of incorrect or inaccurate letters?  And isn’t it strange that the “errors” always seem to work in HMRC’s favour? I’ve lost track of how often they allocate payments to wrong years or have wrong information about clients – for example counting the same income in two different years or sending out demands for payment in relation to periods before a company was even formed.  Sorting out these issues costs us and HMRC time and, therefore, taxpayers’ (read clients’) money to do this – and it’s simply not necessary!

You can add the costs of: the time we spend on hold on the phone waiting for a response only to be told to ring back another time; the cost of faxing/posting documents because HMRC in the main doesn’t accept or send emails; and the lack of certainty about a taxpayer’s position because of the sheer length of time HMRC can take to respond to correspondence (if in deed they do at all).

The ICAEW tax faculty are of the opinion that HMRC is being starved of resources. Our view is that penny pinching coupled with a dogmatic belief that every taxpayer is trying to “pull a fast one” are costing HMRC dear now and in the long run.  The public needs to have confidence that they get the right answers and they get them when they need them.

As this is election year, I will be looking kindly on whichever party puts forward a commitment to an HMRC Service Covenant – one which puts experienced staff back on the front line who can actually answer queries and which has real teeth when HMRC fail.  That covenant would also make HMRC accountable for the extra administrative costs they inflict on taxpayers.  

It would drag the organisation into the 20^th (and no, that’s not a typo) century in terms of communicating with the people they are supposed to be there to serve – and even, maybe, us accountants.

Alternatively, how about a party (beyond our friends in the Monster Raving Loonies) being brave enough to suggest we should put our tax collection system out to tender or introducing some of the consumer choice and competition that they talk about so enthusiastically elsewhere in our society?

Gone fishing?

My in-box has been overflowing….sadly, it’s not with heartfelt New Year wishes, but with phishing emails.

There’s been the usual collection of fake missed deliveries “in time for Xmas”; offers to help me enlarge something I don’t have; and fake remittances with malware for attachments. 

As ever, if I don’t recognise who they’re from they just get deleted – if they’re for real, someone will ring me to chase them up.

I’ve also been preparing myself for the annual round of fake HMRC repayment letters where the spammer implies that you have overpaid tax and can click on a link to get it back. 

We’re pretty much there on this year’s personal tax returns so I’m waiting for this bunch of feeble attempts to con me to start flooding in.

Believe me, I have a chuckle at a good fake, one that has a good story to it.  The Nigerian astronaut stuck on the space station was one of the best 419 scam emails I’ve ever seen. 

I suppose they appeal to my sense of humour.  They still go in the bin but they do give us a laugh at Battleaxe HQ.

What I wasn’t expecting, and don’t appreciate, is getting letters from HMRC, which while not fakes are ‘fishing’ for all sorts of detailed information that is nothing to do with the client’s actual tax affairs. 

We’ve even been asked to provide personal bank statements for the wife of a client, who isn’t a shareholder or a director of the business!

Now, if they’ve got good reason to ask that’s fine.  But HMRC doesn’t actually have the right to demand anything they think they might like to see.

The taxpayer has every right to push back and demand to know why any item is relevant.  And believe me, we have been. 

When we do nine times out of 10 HMRC backs down – the latest was an admission that they’d “made a mistake in asking” – but far too many people just provide the information without thinking.

Our policy is to ensure that clients pay the right amount of tax (not too much and not too little) but with HM Treasury short on tax take I suspect we can expect more of these seemingly innocent phishing expeditions. 

Just remember: if you take the right advice you can then push back and put it in the bin.

Failing to read the small print could prove a costly mistake

It’s very easy to unwittingly agree to things you didn’t realise you were signing up for!

How many times have you been asked to “just sign here” to open an account with a supplier?

Well, one of our clients opened several trade accounts for his limited company only to find, when the business stumbled, that he’d effectively signed away his car and his house.

The innocuous looking standard terms and conditions on the back of the account opening form actually contained a stringent personal guarantee.  He’d signed so the law assumes he’d read the small print first.

I personally walked away from an agreement recently because it said “if you don’t use the sessions within 90 days they WILL be forfeit”. 

When I worked it out, it wasn’t possible to use the sessions within 90 days as my trainer was planning a break during Christmas and the gym potentially needs to close to do building work.

Despite verbal assurances that they have never enforced the clause, I wasn’t willing to sign up.

So, my trainer has lost the advantage of me paying up front – I’m still going to do sessions as the Battleaxe needs to keep fit to wield a rolling pin with full force!

Insurance policies are another classic of this. People shop around for the cheapest deal only to find that there is a reason for that – they’re not covered when they want to claim because of the various exclusions on the policy. 

For example, you are only really covered for theft if you have window locks of a certain type fitted.

Oh, and don’t forget, in this season of goodwill, to check your rights to return goods that you buy as presents or in the sales. There may be time limits for returns; you may only be able to get a credit note unless the good are faulty; there might only be a limited time to activate an additional warranty.

So, whether it is business or personal, read the small print - or it could cost you dear!

Why would anyone in their right mind become an employer?

In recent times, I’ve come to wonder more and more why anyone in their right mind would become an employer!

Think about it: all of us who employ people will soon be in the depths of auto-enrolment pensions.  Even if no employees take up the scheme, the employer has to jump through the hoops of setting up a scheme and communicating loads of very technical details to employees.  That’s after dealing with a stream of employee questions because the adverts have been on TV.

Many are facing the situation that their Stakeholder Pension provider won’t convert an existing scheme to auto-enrolment and, because they’ve only been required to join in later in the process, that other providers are closing their doors to new applicants.  And now time is ticking with the penalties for missing deadlines being harsh.

The push for employees to be paid a living wage, not just the minimum wage, is growing.  Many smaller employers are facing constant downward pressures on their prices so will have to face the prospect of cutting employee numbers if they have to pay employees they keep more.

The prospect of overtime hours costing more for reasons from living wages to the recent holiday pay ruling (albeit that is likely to be appealed), may mean that some employers decide against allowing overtime because the added costs exceed the additional profit that can be made.

Then add in the fact that apparently ever-greater rights for employees to ask for (or is that demand?) flexible working patterns can and does cause real headaches for scheduling/resourcing.

With pricing pressures on one side and the cost of employing people on the other there can come a time when a company is struggling to survive.  Then the hard decision of reducing head count often has to be made and, oh boy, the cost and risk of doing that is daunting.  A long-standing employee could be entitled to several months’ worth of pay when you combine redundancy and notice pay – all at a time when the business is trying to save money and may be short on cash.

Oh yes, and small employers can no longer reclaim the cost of Statutory Sick Pay.  You’ll have heard about the £2,000 employer’s NIC rebate and that’s great but the cost of one employee being on extended sick leave soon takes away that benefit.  After that sick pay is a real cost to the business and there’s nothing they can really do but pay it.

I could go on - and yes, I know it’s a potentially depressing list!

That said, for me I know (looking round my offices) that the trials and tribulations are outweighed by the reward of building a happy and productive team.  Running a small business means working with staff who can (and should) become an extended family and, if you get it right, then each member of your team will actively strive to grow a prosperous future for the whole business and everyone involved with it.

Why? It ain't necessarily so!

As a small business owner, I have been watching the coverage of the various party conferences to learn just what each party is going to do to help ease the lives of the millions, like me, after the election next year.

Coincidentally, I unearthed a Jimmy Somerville compilation CD. As I read down the play list, the titles of the songs were exactly the words coming out of my mouth as I listened to the politicians who were trying so hard to win my vote in 2015.

‘Why? It Ain’t Necessarily So!’  So many things unanswered and so many sweeping statements with no proper reason or explanation. What I heard left me ‘Disenchanted and Screaming’ at the TV because their view of ‘Tomorrow’ does nothing substantive to help people running businesses.  Quite the reverse in some cases!

Obviously that is contrived, but then messages I wanted to see coming out of the conferences were that:

• red tape and compliance costs were going to be cut;
• HMRC would be reviewed root and branch to work with businesses;
• the draconian and impractical employment laws would be relaxed for smaller businesses; that there would be more incentive for businesses to grow ­­- so many rules kick in when a business reaches a certain size;
• we would see a big rise in the VAT threshold keeping lots of tradesmen who deal mainly with domestic consumers out of the VAT threshold making it easier for them to make a living without having to raise their prices just because they need to charge VAT;
• enforceable and effective sanctions for persistent late payers.

Unlike those in jobs, there is no minimum wage for the self-employed and many really are living in Breadline Britain still, despite the economy showing signs of picking up.  Many can’t get credit because they are self-employed or, if they do, they pay a premium rate for it. During the recession, many have drained their savings and maxed out their credit cards to cover the consequences of late payment by customers or even bad debts so are paying interest at high rates, whilst their late paying customer is watching Sky TV on their brand new 3D TV.

Whoever wins the next election will be the one that has policies that help to stabilise the backbone of the British economy – the small business. To quote more from Jimmy – ‘Read My Lips’, ‘Make Me (Us) Feel Mighty Real’ and give small businessmen ‘Something To Live For!’

One month each year as unpaid as Government lackeys

Every day small businesses across the land are acting as unpaid administrators for HM Government and the burden is getting bigger and bigger.  Looking at the time that I have spent in the last 12 months:

• Pensions auto –enrolment – researching, talking to advisors, filling in forms, providing information - 3 days
• Real Time Information payroll – including additional time sending reports and liaising with HMRC re their misallocation of payments/failure to give credit for Maternity Pay - 2 days
• Pre-employment right to work checks for new employees - 1 hour
• Government generated surveys - 2 days 
• Money laundering checks on new clients and routine updates - 6 days
• Down time Health and Safety reviews/PAT testing etc - 1 day
• VAT returns - 4 days
• Other bits and pieces including keeping up to speed on changes - 3 days

Total: 22 days

Whilst these are only indicative, we are spending about a month a year on unproductive time caused either by HM Government requirements or its inefficiencies.  We are not a complicated business so I dread to think how much time some businesses are spending either in time or professional fees.

So many times Government initiatives are heralded as helping to simplify things, but its systems just aren’t able to cope with it.  On Real Time Information (RTI) alone, one part of Her Majesty’s Revenue and Customs (HMRC) acknowledged that it could see the maternity pay, but the debt collectors couldn’t.  I heard myself saying “take me to court and I’ll take great pleasure in telling the world about HMRC’s inadequacies”. Even the National Audit Office says that its systems are “not fit for purpose”.

In the run up to an election, I would call for every political party to look at proposals to reduce this burden to business.  Businesses are finding it tough enough in these rocky financial times and need to be left to getting on with earning money to pay their bills and their employees, not spending time acting as unpaid civil servants.