Shit happens (life is so cruel)...

Life can be so cruel....

I generally keep this for business related things; however sometimes life can just be so damn unfair.

A very close and dear friend who I met through this Industry has today received some pretty shit news that will affect them and those they love.

She knows who she is – keep smiling you and between us all that know you, I have confidence that we will all be there for you to keep you in your “happy bubble”.

Prove those experts wrong and laugh at them! J

You know where I am if you need me xxx

Credit Card and Online Payments

Over the last month or so I have been having discussions with a provider who specialises in providing online payments and credit card payments. They cater for all industries but one of their niche markets is the Adult Industry.

They are based in the Channel Islands, however their partner bank which provides the physical payment processing is European and has absolutely no issues with this Industry at all.

I have spent a considerable amount of time performing due diligence on the provider and also taking up references from their major customers. I have signed a Confidentiality Agreement which prevents disclosure of their clients names, however they are providing card processing services for some of the major players in this arena and been operating in it for a good number of years. Their reputation and references are highly commendable.

In a nutshell what is being offered:

(1)  The ability to take credit card payments for physical meets/deposits via a hand held terminal.

a.    As it’s a cardholder present transaction – NO holdback or retention, (you get all the money very quickly). 

b.    Sensible fees for transactions.

c.    VERY discreet billing for your client on their credit card statement.

 

(2)  The ability to take online payments for adult content.           

a.    Whether this be per minute billing for cam or chat; or one off / recurring billing for membership sites or pay per view galleries.

b.    They are cheaper than the other players for this Industry and you do not run the risk of losing your money because your business is described as something very different to what it does.

The whole online payment can be easily integrated into any website that you already have control of, thus giving you the ability to add an extra revenue stream as applicable.

Obviously electronic payments will not appeal to everybody as there are a lot of cynics out there as well as those people who want no traceability as they are not paying any tax. There are a lot of benefits to taking electronic payments if the price and logistics are correct.

We will be publishing a FAQ sheet within the next week with hopefully enough information and answers for you to see if you are interested in the service.

Thoughts for the day…

Some interesting thoughts and comments (or not as you may think) that I have encountered recently.

Comments from potential client(s):

I want a local based accountant.

My Reply:

With all of this wonderful technology we have in this world then there is absolutely no need to be local to your accountant (or any other professional adviser for that matter). Yes we have to meet initially (for various reasons) and I am more than happy to come to you if that’s easier.

 

On an ongoing basis, I am more than happy to talk via the phone and / or email to discuss any issues. If there is something really that crucial that we cannot go through it on the phone then we can arrange a meeting. I usually do not charge for this as I can normally coincide it with something going on in my personal life or another client.

 

Consider that the person who said that was based in central London; do they really want to pay London rates? Although an ex Londoner (born and bred – you can take the boy out of London, but never the London out of the boy) I do not charge London rates.

Comment from potential client:

You are prepared to travel to me – therefore you must be very expensive or just helpful

My Reply:

My rates are very reasonable and I am more than happy to offer a free initial meeting if you are serious about using my services. If you are just window shopping then I find that a chat on the phone is preferable unless I am in your area for other business.

Yes I am helpful – I treat people how I like to be treated. I am in a service based profession and I firmly believe in offering a good service. I am also not naïve in this world and take the view that any potential client could introduce more new clients to me (irrespective of what industry they are in).

Existing clients will happily vouch about how helpful I am. I firmly believe in building long term client relationships and therefore act in a suitable manner. Most good professionals will offer a free initial meeting or chat – it gives both parties the chance to see if they can work together. 

On the same basis that you are under no obligation to use my services once we have met, then I am also under no obligation to accept you as a client. I have only ever turned one future client away and that was because they were willing to try and buck the tax system and willingly commit blatant tax evasion / fraud. That will just not happen with me and any professional accountant will have had the same view.

Comment from potential client:

How much will it cost me and what can I claim as expenses?

My Reply:

I usually give a rough cost range which will not be wildly wrong when we meet. It is very hard to commit to anything until I understand your full circumstances – do you have other income (property, PAYE job etc), are you VAT registered, are you claiming benefits etc? 

In respect of what you can claim as an expense – well I could write a complete book on that and to be blatantly honest I just won’t go into that detail on an email. Apart from the fact that I hate typing lengthy mails, why should I give loads of free expert advice to complete strangers when they can type things into Google and see what comes up? Or even better – they can ask on forums and wait for the replies…..

Which leads me nicely onto…..

One of my pet hates is so called experts who post on forums when they haven’t really got a clue about what they are talking about. Someone referred to them as educated fools once – I just call them stupid idiots! (and that is being nice for me). Be careful what you read out there folks….some of it is shocking and just totally wrong and will get you into deep with water with HMRC.

Talking about pet hates:

 
Whilst I will happily exchange a couple of emails – I do not like writing war and peace on email for ever and a day. Yes it has it’s purpose and time; however I find that so much more can be answered in a 5 minute phone call. You don’t even have to worry about the cost of the call as I will call you if needed. I also take calls from withheld numbers so don’t worry about that if that is a problem.

I myself operate two phones and the number displayed on this website is only for new / potential clients to contact myself. Once we have met then I have no problems giving my main number out. 

I have been known to take the view that if you are not prepared to pick up the phone then you are wasting both our times (and I haven’t been wrong yet!).

I am contactable at all sorts of weird times and have even been known to take calls at late o’clock on a Sunday evening. It’s all part of the service!

 

When you deal with me then you are dealing with a professional human being who knows his trade; treat me the same as you would treat any other professional (and also how you would like to be treated) and we won’t go far wrong in our working relationship. 

So much for a short set of words….sometimes I can be literal. Back to the numbers now.

Is this a dilemma you or someone you know might face?..

This is a situation that I am increasingly coming across and unfortunately it’s one of those where perhaps there is no consistent right answer.

(Before people start to lay into me or pass judgement, remember that everyone does things for their own reasons and no one should assume they are any better or any worse than others. Again, as is standard practice when professionals post on the public web – I do not condone tax evasion of any kind; tax avoidance is a different matter and is the perfectly legal way of organising your affairs to minimise your tax)

The situation:

Approached by a new client who when we start talking (either on the phone or face to face) admits that they have been working doing whatever it is they do for the past [x] number of years and they haven't been declaring it to the nice people at HMRC [if you have read all my website then you will realise I can be sarcastic at times].

They ask me what I think they should do – my standard answer is that it is down to them and their circumstances.

I advise them that they have basically two options –

1. Keep their fingers (and perhaps legs – excuse the pun) crossed and hope that HMRC never have reason to go looking back into their past nor some pissed off punter decides to makes noises and causes trouble for them.
2.  
3. Contact HMRC and do a voluntary disclosure for the prior years. Yes this will result in having to pay tax and interest and you may get a little red flag against your name for a few years. As long as you keep filing your returns and paying on time this should not be a major issue.

There is never a right answer in the clients mind as it depends upon a number of factors; the amounts involved, the length of time and the clients own sanity. Some people just hate worrying about what the next brown letter that lands on the doormat is about.

Some people take the first option – with perhaps the viewpoint that there are shed loads of taxpayers in the UK (approx. 30million for income tax) so what are the chances of them as an individual being selected?

Others may decide to come clean and do a voluntary disclosure.

The one thing for sure is that if your name is selected (for whatever reason) for an investigation in future and HMRC find that you have been a naughty person, the penalties that will be imposed then will be much more harsher and potentially damaging to you as an individual than they would be if you had declared it voluntarily.

HMRC have over the last 18 months targeted plumbers and electricians giving them an amnesty to declare undeclared income. Once the amnesty was up, then HMRC hit them hard!

What would you do? As a television presenter sometimes says – Phone a friend, ask the audience or 50/50?

Time to be clever?..

These are real life issues that I have come across from clients. Names have been changed in order to protect client confidentiality.

[this might be stating the obvious but I have to say it – in no way do I condone any issues of tax evasion – nor would any reputable regulated accountant. Tax avoidance is a different matter and is a perfectly legal way of organising your affairs to minimise your tax bill]


Story 1:

Let’s take a young lady – she needs a reference from an accountant to get a new lease on a rental property. She finds me on AW and emails me accordingly. She either offers to give me cash or a couple of hour’s free service.

Basically she wants to me put my signature to a letter saying that I can confirm she earns whatever she says she does and that I think she is good for the lease.

Do I know her? NO
Do I know her financial affairs? NO
Am I stupid enough to risk serious disciplinary action from my Institute should anything ever go wrong? NO

Whilst I will happily provide mortgage and other references for existing clients (at no cost I must add) – why the hell would I do one for a complete stranger?

Come on folks…. Use some common sense please!!! You are dealing with a professional here not a two bit back street moron.

Story 2:

Jessica has been working for a few years as self employed and doing her own books and tax return. Whether she has been doing it in the most efficient way is a secondary tale to the main story. She hasn’t been totally honest with the nice people at HMRC and has been under declaring her income and just spending the amounts she has missed off of her tax return.

Jessica decides to go buy a house. She lies on the mortgage application about her income. She gets all excited as people do and the process get started.

Mortgage application form duly filed out, survey completed on the house etc.

Before the lender sends out the mortgage offer they do a couple of last minute checks (hey – it’s their money after all and they need to be happy!). One of these involves Jessica proving her declared income – the most logical way is to see copies of her tax returns. Now she panics – she tries to go back and say that she made a mistake on her application, as well as various other feeble excuses which the lender sees through straight away.

Needless to say, the mortgage is refused, her name is put on a black list by the council of mortgage lenders (a shared database amongst the mortgage world) and just to add insult to injury – the lender reports her to HMRC for suspected tax evasion.

Not a happy Jessica to say the least.

Story 3:

Jane has been doing her own books and accounts for the last couple of years (again the same comment about efficiency applies as it did with Jessica).

This time Jane has been under declaring her profit to the tune of around £10k. She has therefore been paying reduced income tax.

What she hasn’t fully realised is how lenders access the borrowing capability of self employed people.

Jane happily walks into the mortgage people and gleefully fills out all the forms thinking she will get a nice big mortgage to help her buy her dream house.

The lender uses a multiple of 3 times the profit figure; Jane hasn’t fully appreciated this and the lender will only offer her a mortgage that is £30k short of what she was expecting.

That nice big house disappears from view and she’s left with the option of either putting down a bigger deposit (which she hasn’t got at present) or settling for something smaller.

Either way – not a happy Jane.

How not to meet an accountant...

Obviously I have to meet new clients when they first contact myself and wish to use my services… apart from the fact that it’s always good to put a name to a face, I need to see ID from clients to comply with the various rules imposed upon the accountancy profession.

I also somewhat take the view (maybe it’s called confidence, some people call it arrogance) that I will know more about accounts and tax than the average client does. After all – I have been doing it for a fair few years and have 3 professional accountancy qualifications after my name.

I always ask some general questions about the client so I can tweak my presentation accordingly and pitch at the right level. The ideal client will listen to what I have to say (it’s not death by powerpoint honest) and then they will ask questions as needed to make sure things make sense.

I by no means assume that everything I have said will be taken in by a client in the first meeting…I am more than happy for clients to email / ring with questions at any time.

My all inclusive service means NO additional charges – talk to me as much as you like… keep doing it daily and I will think I have a new admirer!

Clients like that are a joy to work with as they do actually listen to what I have to say. I may not have experience of being a sex worker (thank god the people who know me will say) – however I do have 25 years of business experience. Your job/career is a business after all has been said and done.

The clients that have proved to be a right royal PITA are those that straight away say “I don’t want to pay any tax by using you” and “how much can you save me?”

I do give up on the ones that claim to know my profession better than I do but that’s another story.

When it comes to saving tax and not paying tax – yes there are ways we can legally minimise your tax, there are also ways that get you an instant go to jail card. Whichever way you decide to go, then it’s your choice at the end of the day – if I feel it’s wrong or potentially going to give you a problem then I have a moral and professional duty to advise you I and will always gain your written confirmation that you have acted against my advice. This is standard for accountants.

Yes – there are many ways to save tax – I will happily share these with clients as needed. But first make sure you understand the system and all the implications of taking a particular course of action. I will always seek to legally minimise your tax bill where possible.

Please don’t try telling me how the tax system works or how you can get around it – it is very likely I would have come across your ideas already!

Listen to what I have to say and then let’s work together to make your finances happier!

Just for a laugh....

To show that I am human after all..

Accountants jokes…

Q: What is a Budget?

A: An orderly system for living beyond your means.

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Q: How many accountants does it take to change a light bulb?

A: "What kind of answer did you have in mind?" Two, one to change the light bulb and one to check that it was done within the given budget.

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Q: What's the definition of an accountant?

A: Someone who solves a problem you didn't know you had in a way you don't understand.

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Q: What's the definition of a good tax accountant?

A: Someone who has a loophole named after him.

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Q: When does a person decide to become an accountant?

A: When he realises he doesn't have the charisma to succeed as an undertaker.

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Q: Why did God invent economists?

A: So accountants could have someone to laugh at.

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Q: What's an actuary?

A: An accountant without the sense of humour.

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Q: Why do some accountants decide to become actuaries?

A: They find bookkeeping too exciting.

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Q: What do actuaries do to liven up their office party?

A: Invite an accountant.

Immoral or unethical?.....

Tax avoidance – immoral/unethical?

The Lord President Clyde, ruling on the test case Ayrshire Pullman Motor Services v Inland Revenue Commissioners in 1929:

"No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores. The Inland Revenue is not slow to take every advantage which is open to it under the taxing statutes for the purpose of depleting the taxpayer's pocket. And the tax payer is, in a like manner, entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Revenue"

Basically this just somes up what every good accountant should already know - a taxpayer is perfectly entitled to organise their affairs so that they pay less tax.

As long as it's legal, HMRC can't do a thing about it.

Hobby or a business.....

Well.... some people have a "normal" job (whether part time or full time) and have a little play on various adult websites as a "hobby".

Sometimes what you class as a hobby may not be that in the eye's of the lovely people at HMRC.

If you have set up yourself up to provide services (whether camming, phone or in person) and you are in the eyes of HMRC running it like a business, then you have to declare that income and pay the appropriate amount of tax and NI on your profit.

Is there a strict definition of a hobby as far as HMRC is concerned - NO! but this is where common sense prevails.

I would respectively suggest (and HMRC tend to agree) that if you are charging people on a regular basis then it's a business. Therefore HMRC want their share - simples!

If you decide to argue the case with HMRC then consider all aspects - the paying in of your earnings, the feedback from your services. All of this will lean heavily towards running a business therefore you pay tax.

YES this is the case even if you are paying tax on your normal job.

Confused / need help - feel free to get in touch.

Remember that tax evasion is not something HMRC look favourably upon.

Letters from the taxman....

People are now starting to get letters from HMRC advising of the fact that they have to submit a self assessment tax return.

You have until 31st January 2013 to file and pay, but you can do it earlier if you want.

Sometimes you may need to if applying for a mortgage etc.

If you don't know what your tax liability is, then why wait until filing day to get a shock from the taxman. I can calculate your tax accurately very quickly if needed so you know how much you have to have ready.

Don't forget that if you are a day late filing, the nice people at HMRC send you an instant automatic £100 fine.

Remember - if you are self employed, you must file a tax return even if your taxable profits are less then the annual personal allowance.

If you need help....get in touch.

My charging policy....

Lets just set a few things straight out in the open for all to see:

I don’t charge people in this industry more than I would do a non adult industry client.

Most of my adult industry clients have simple tax affairs and will usually pay not a lot per month for an all inclusive service.

No hidden fees at all.

I have even been known to reduce my fees year on year.

If your affairs are simple, then the fee is less than a client who has more complex affairs, hence no pricing “menu”.

Payment in Kind – thanks but no thanks… whilst you think you may be the best thing sexually, payment in kind will not buy me food or petrol. The only exception to that is if you want to give me an Aston Martin (I live in hope and it has to be the right colour!)

I have absolutely no issues working with adult industry clients. As long as what you do is not illegal (animals/kids etc) then I don’t give a damn what you get up to. All I ask is that you treat me with the courtesy and professionalism that you get from me.

I appreciate that anybody can say the above – if before or after meeting me then you wish to talk to existing clients this can be arranged. No strings, no catches.

There are accountants out there who will think that adult industry workers can be fleeced… sorry but my personal and professional morals don’t allow me to do that.

I prefer to be honest and open and have you as a client for many years rather than make a quick buck in year 1. If you leave the industry then I am more than happy to still work with you to sort your finances out.

Do I just market myself in the adult industry? No I don’t, but I do realise that it is an industry where my services are called for; hence I promote myself as appropriate. I also promote myself heavily in the “normal” world.

The initial meeting...

I am more than happy to have an initial chat over the phone to offer non committal advice etc relating to your situation. Obviously you cannot rely or quote me on anything until you become a fee paying client – that is just how accountants and lawyers work - we are all the same.
I am more than happy to use your working name initially, BUT, once we meet and we decide that we can work together, then I need your normal name and address. I am obviously happy to prove to you whom I am once we meet. My status and ID can be verified real time online with my institute.

Why do I do this? Simple – I have to by law.

I am regulated by a UK Chartered Institute and apart from having to comply with their rules and regulations, I must also comply with the Money Laundering Regulations Act 2007. It’s dull and boring so don’t bother reading it – the main relevant bit is that I must see original photo ID and proof of address. I also have to issue a formal engagement letter which acts as a contract between ourselves.

If I don’t and my practice is subject to a routine paperwork audit, then I get in trouble – Simples.

Unfortunately no client is worth me loosing my business over, therefore if you are not willing to work this way then I suggest you find yourself a back street unregulated fool who calls themselves an accountant as all regulated accountants must do as I do.

Again, I have numerous clients who will vouch for my integrity.

Whats in a title?

Anybody can call themselves an accountant

BUT……

unfortunately the word “accountant” is not a protected title, thus anybody on the street can advertise themselves as offering accountancy / book keeping services.

Yeah – it’s true – a spotty 19 year old straight out of college working in any fast food chain could legitimately set up in business offering accountancy and tax services to the public. They may well be able to cope with some of the simple stuff and they may be able to use the web to find out about other bits and bobs.

But what happens when they get it wrong or things just don’t happen as they expect? Have they got the experience to legally minimise your tax? What recourse have you got if they misadvise you or they are late filing your tax return?

Absolutely none…end of conversation…as far as HMRC are concerned the buck stops with you the taxpayer.

OK – they may be cheaper than a professional regulated accountant, but as everybody knows – cheapest isn’t always the best in the long run.

Consider what a professional regulated accountant like myself has to offer:

** 7+ years of studying to gain my accountancy qualifications
These are with a recognised UK Chartered Accountancy Institute.
** 25 years practical real life experience of doing book keeping, accounts and tax for every scenario from sole traders to blue chip PLC companies.
** I hold a practising certificate from my institute – this means that:
I hold full professional indemnity insurance (if I ever get your affairs wrong and you decide to sue me, I am covered by an insurance policy)
I undertake the required Continuing Professional Development (training) each year in order to keep up to date and abreast of recent tax issues.
** I issue engagement letters to clients so that we both know what is expected and how to resolve things (if the need ever occurs).
** I am a recognised HMRC agent – I get speedier responses to any queries and I can deal with all the correspondence that you receive from HMRC on your behalf.
** Being a professional, I have credibility with banks and lenders – this always helps when self employed people apply for mortgages or credit if they say that they have an accountant.
** I deal with your tax affairs on time, every time – no more penalties for late filing; no more late nights panicking.

My fees are fixed – guaranteed – no nasty bills for extras.

I normally include an insurance policy in my fee which covers you for my fees should HMRC decide to open an inquiry into your affairs. This type of work will attract a higher premium than normal accounts work – it’s all covered in my fee.

For the weird and wonderful tax situations that I may come across – I have a specialist tax advice service at my disposal – no extra cost to me or you.

You might be reading this and thinking that it all sounds too expensive… get in contact for a quote and you will be pleasantly surprised at how cost effective my services are.

No two clients are the same hence I don’t have a set pricing model.

Is the choice between hiring a professional and a layman now being made that bit easier?

One last word of advice – anybody that is classed as an “accountancy services provider” must be registered with HMRC. If they hold a practising certificate from a UK institute then they are automatically registered and supervised. If they are not registered then they are in breach of the Money Laundering Regulations Act and the associated penalties will apply.

If they are not taking their own business affairs seriously, then why should they treat your affairs any different??

[No offence meant to spotty teenagers or fast food chain workers – it was an example to illustrate a point. Exactly the same applies to ANYBODY who pretends to be something they are not]

Rant over – my profession and accountancy practice is my livelihood – I protect it as any good professional would.

Choose a regulated accountant and you put yourself in the best possible position.