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10 Reasons To Survey Your Visitors, Subscribers And Customers
10 Reasons To Survey Your Visitors, Subscribers And Customers
by: William R. Nabaza of http://www.Nabaza.com
1. You'll find out what type of content visitors want to see at
your web site. This will attract your visitors to revisit and
read...
Are You Boring Your Customers?
Copyright 2005 strength-training-woman.com
The business world is changing and your company must catch up.
Consumers are driving the quest for information and personality.
Customers are demanding to trade their hard earned cash for
prompt,...
Are You PR-Challenged?
Please feel free to publish this article and resource box in your ezine, newsletter, offline publication or website. A copy would be appreciated at bobkelly@TNI.net. Word count is 870 including guidelines and resource box. Robert A. Kelly ©...
Customer Service Internet Style - 10 Tips To Improve Your Service
Quality customer service is the lifeblood of any business. If you understand that it costs more to find a customer than it does to keep one then you will appreciate the importance of good, quality customer service. Unfortunately, with the...
Customer Service - The Infection of Mediocrity
In recent months, I've had the worst experiences with my phone
company, the post office, my bank, fast food drive through
services, the grocery store, department stores and local gas
stations.
I expect to receive what I pay for. I expect...
Good Customer Service is Worth Its Weight in Gold!
From LAND OF ODDS
We at Land of Odds get many questions about what glue to use with rhinestones and other beading and jewelry-making projects. We're craftspersons and silversmiths, and we have a shop where we sell rhinestones, beads,...
How To Ruin Good Customer Relations...In Two Easy Steps.
This article may be freely used in ezines, on websites or in e-books, as long as the by-line is left intact. Notification of publication would be greatly appreciated, and if possible, a copy of the relevant ezine or newsletter. Please send...
Learning Superior Customer Service Skills
Is customer service an empty shell, long on rhetoric but short on delivery? Does the term customer service actually mean anything, or is it a leftover expression from an era of days gone by?
Is customer service a department in your...
The Role of the Business Model and Strategy for Business
People will always stress that having a well researched business plan is key before you start your business. Although creating a business plan is often an important step in the evolution of a business, particularly if you need financing or you...
Why Are Customers So Indecisive?
Do you know why your customer won’t buy? You’ve given her the best price, possibly even the best options. Yet she fidgets. Maybe, maybe not, she ponders. You stand by the wayside and sweat, praying the sale will go through. Then almost...
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Managing Customer Uncertainty
According to a new survey carried out by Alliance & where ID_NUM=9270;
Leicester, one in five small business owners view tax as
their greatest concern. The Chancellor has announced in his
last budget that companies with profits below œ10,000 will
not have to pay any corporation tax with effect from 1 April
2002. The question to be asked is: does that announcement
make incorporation a more attractive option compared to
being a sole trader?
The answer is that from a tax point of view, it is
advantageous to trade through a limited company as long
as the income is drawn from the company by the owners as
dividends from their shares and the amount of dividends
drawn is restricted below the 40% band rate (i.e. œ31,063
for tax year 2002/03). That way, the owners have no further
personal tax ("income tax") to pay. Moreover, dividends are
not subject to national insurance contributions. This is
excellent news of course. But, if dividend income falls
within the higher rate bracket of income tax (i.e. above
œ34,515), they will be taxed at 22.5% on the excess, which
of course will increase the tax burden. The company profits
are subject to corporation tax rates. Those are lower than
income tax rates.
The most catastrophic scenario is when the director takes
his reward from the company as salary. Then his/her salary
is taxed at income tax rates (like a sole trader's income).
That is because, unlike sole traders, the tax system treats
companies as separate from their owners because a company is
a separate legal entity. The problem is that the income
taxes are higher than corporation tax rates. On top of
that, they will be subject to employee and employer national
insurance contributions, which of course increase the tax
burden and render his position worse than even an
unincorporated business ("sole trader"), because NIC Class 1
on payroll are higher than NIC Class 2 paid by self
employed.
In contrast, a self employed person ("sole trader") is taxed
at income tax rates on the profits from his business, which
are added to his other sources of income. As it has already
been mentioned, income tax rates are overall higher than
corporation tax rates. On top of income tax, national
insurance contributions class 4 are payable on the business
profits within a specified band (7% on profits between
œ4,615and œ30,420). National insurance contributions Class 2
are also paid by self-employed people, although those are
lower than those payable by company directors on their
salaries.
To illustrate the above, let's take a simple example. We
have a limited company and a sole trader. They both make
œ60,000 profits each in the tax year 2002/03. We assume that
the company director takes a salary equal to the amount of
his personal allowances (untaxed income) of œ4,615 and the
balance as dividends. The company will pay corporation tax
at 19% equal to œ10,523 and nothing else. The sole trader
will pay income tax œ16,542, National insurance Class 2 œ104
and National insurance Class 4 œ1,806. Total œ18,452. The
bottom line is that the person that has incorporated his
business into a limited company will make a tax saving of
œ7,929 compared to a sole trader! Isn't that fantastic?
Somebody might be wondering: why is this entire happening?
The official explanation is that, this government, to help
the economy grow, encourages people to leave as much profits
within their businesses to be reinvested, instead of being
taken out and spent.
The "unofficial line" is that, as a matter of fact, for
years the Inland Revenue has tried to reclassify the
self-employed. The 1% in NIC hike on staff salaries above
the NIC threshold from next April adds to both the
employees' and employers' tax burden and may more than
offset the saving from the corporation tax zero rate on the
first œ10,000 of profits.
Aren't there any other matters to consider in deciding
whether to incorporate or not?
Higher administration costs to comply with company law,
payroll and bookkeeping
is one factor. Another issue is
pension planning. Extracting profits out of the company as
dividends rather than salary means that there will be no
"net relevant earnings" and therefore pension contributions
can't be made. But the advent of stakeholder pension plans
has meant that contributions up to œ3,600 per year can be
made without the need for any earnings. If a person does not
wish to transfer funds in existing plans into stakeholder
because of high charges, there is a way out: the best net
relevant earnings (i.e. salary) in five consecutive years
can be used for making contributions for the next five
years, even if there were no salaries in the remainder four
years. It is comforting to know that entitlement to basic
state pension is not affected by taking a salary from the
company at the level of a person's personal allowances i.e.
œ4,615.
Furthermore, an individual may decide not to bother with
pension plans and instead invest in ISA. Often, these can be
more efficient than pensions but that's beside the scope of
this article. If that option is taken, no salary is
necessary.
Another factor is business motoring. It might be tax
advantageous for an unincorporated business that owns many
cars not to incorporate because if these cars have some
private use there will be benefits in kind taxed on the
users. These are generally higher than the straight
apportionment between private and business for all car
running costs in the case of sole traders.
The conclusion is that there can be considerable tax savings
waiting the sole trader who decides to go down the
road to incorporation. But, one needs to proceed with
caution and careful planning. And don't forget the biggest
advantage of incorporation, which is Protection
from Personal Liability. Incorporating is one of the best
ways to protect a business owner from personal liability.
Shareholders of a company are generally not liable for the
obligations of the company. Creditors of a company may seek
payment from its assets, but not the assets of the
shareholders. This means that business owners may engage in
business without risking their homes or other personal
property.
Thank you for taking the time to read this Article. I hope
you've found it useful. If you have, please drop me an email
and let me know what you think.
You can email me at...
constantinesavva@accamail.com
Alternatively, you can visit our website at
http://www.tax-accounting-london.info and read a series of
other full length articles that present the complete picture
on a variety of interesting topics.
If you would like to know how to save tax and make sure that
more of your hard earned cash stays with you to expand your
business and increase your profits, we have a Free Special
Report addressed to small businesses either starting up or
already in business. This Exclusive Free Special Report is
available automatically when you subscribe to our regular
series of Free Newsletters on finance advice and tax
planning by visiting our subscription area on our website
www.tax-accounting- london.info. It is complied from real
life situations dealing with small business tax affairs for
over 10 years and it is loaded with down-to-earth advice and
practical, understandable examples.
LEGAL NOTICE
Whilst every care has been taken in the preparation of this
article, the author cannot accept responsibility for any
errors or omissions. Proper professional advice should be
taken at all times.
We retain copyright for the contents of this article. Any
unauthorized copying or onward distributions are prohibited
without our consent.
About the Author
Kennette Reed, CLP, is a customer retention specialist, author, marketing professional, public speaker and interior landscape consultant. She provides customer service and marketing consultation services to firms across the country.
Subscribe to "Customer Connections" FREE newsletter and receive a FREE report, "Delivering Exceptional Customer Service". Subscribe at: www.topica.com/lists/customerconnections
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