Confidence through a systematic approach to accountancy

Advertisements use a multitude of key buzz words to attract customers one of the main purposes of which is to give the potential client confidence in the service or product they intend to purchase.

How do we as accountants in reality instil such confidence as distinct from just putting it down in an advertisement because it’s good for marketing?

Accountants are there to prepare your tax returns and tell you whether you made a profit or a loss and therefore advice if your business is financially viable or not and what changes you need to make it profitable. Also on a psychological level he/she is there to give you a certain peace of mind that you are compliant with your taxation responsibilities and numerous other statutory requirements such as to the Central Statistics Office and the Companies Registration Office.

In order to provide my clients with this level of confidence I find the underlying principal is the systematic approach we take in the practice to each client’s files. I know every client on a personal level and analysis what they need done and how to achieve it. After this every figure we prepare is fully backed up with detailed analysis prepared on a systematic basis. By doing this I can be confident in the figures we produce and so is the client. Our sets of accounts can be analysed the way you peel an onion. The outer layer is the overall figure but you can peel away to reveal the figures and breakdowns behind each number.

Over the last year I have had five revenue audits and in each one the auditors went away without a single euro more than the figures I had submitted to them. This is because each figure is simply explained and then behind each one there is a detailed analysis so that when the Revenue Officers come down I can prove my figures are correct and have a strong basis for countering any arguments they may come up with.

You should expect this from any professional you deal with and although it seems obvious it isn’t always in fact what people get.

(C) Frank McGivney BA(1st class) ACMA CGMA, 0469293891

The Shadow Economy

The Shadow Economy

The shadow economy costs every tax payer money through higher taxation. If everyone declared the income they made then the tax take would increase significantly and the tax burden on an individual basis would fall so we would all pay less.But of greater concern is the effect people,operating with out paying taxes, have on legtimate business. If you are a carpenter qouting for a job and you competion is some guy who pays no tax and no insurance then you just... simply cannot compete. The home renovation scheme has helped alleviate this to some extent in the building industry but it still is a prevalent hinderance to fair trade through out all sectors of the economy.
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1. What is the shadow economy?
In general, shadow economy activity is activity in respect of which businesses (including professions) and individuals engage in inappropriate practices with the aim of not complying with their legal obligations relating to matters such as taxes & duties, PRSI, licenses and employment. Shadow economy activity includes -
not declaring, or under-declaring, a source of income (for example, not declaring or under-declaring 'cash jobs') so as to avoid tax and other liabilities;
employers paying employees in cash under an 'off the books' arrangement so as to evade tax and PRSI liabilities;
'working and signing' - working or running a business whilst at the same time claiming falsely job-seekers benefit from the Department of Social Protection;
non-operation of the VAT system;
tobacco smuggling including the sale of illegal tobacco products;
oil laundering including the sale of washed diesel.
Most of the shadow economy activity takes place within that which is referred to as the ‘cash economy’ (i.e. the payment for goods and services by way of cash).
2. What are the main effects of shadow economy activity?
Shadow economy activity –
reduces tax, duty and other revenues owing to the State;
creates an un-level business playing field that has a negative impact on legitimate businesses as regards competitiveness, sustainability and long term job creation.
3. Reporting shadow economy activity
You can report (or report via your representative body) to Revenue details of shadow economy activity by using our Online Reporting Form. Alternatively, a report may be made by way of a telephone call to your local Revenue office.
Frank McGivney & Co. Ltd Tel 0469293891 email fmcgivney@live.com

Communication

Communication

 

“Wisdom cannot be imparted. Wisdom that a wise man attempts to impart always sounds like foolishness to someone else ... Knowledge can be communicated, but not wisdom. One can find it, live it, do wonders through it, but one cannot communicate and teach it.”
― Hermann Hesse, Siddhartha

There is nothing more important in business than effective communication. You may have the most brilliant product in the world but if you can’t make somebody want to buy it then it is as worthless as a bucket of sand to a camel.

Forms of communication

(1)    Words, sentences, stories, descriptions

(2)    Pictures

(3)    Video

(4)    Sounds, music, songs

(5)    Facial expressions a smile, a grin, a growl a grimace

(6)    Body language, facing away, facing towards, crossed arms, pointing

Fundamentals of communication

(1)    Smile, all the rest is for nought if you can’t get someone to trust you and the way to a person’s heartfelt trust is a smile. Not a grin, not a fake laugh just a simple polite smile. If you are telling something sad or bad then a comforting smile. If you are selling your product then an enthusiastic smile.

(2)    Make the individual or group believe they are the only ones who matter to you in the world by giving them your full attention. Listen to their words, replicate their facial expressions, show a full committed interest in them and hold their gaze. Make them feel there is no one else in the world but you and them, this will make them not only hear but absorb what you are saying.

(3)    Language Use the level of language suitable to your audience. If talking to a room of scientists then go ahead and enjoy yourself and talk technical about quarks and atoms, protons and vectors. If you are talking to anyone else then explain things in words which don’t need a degree in micro biology to understand.  

(4)    Assume people know absolutely nothing about your product. You should know everything about it (and if you don’t then be ashamed and go learn it all) but sometimes a high level of knowledge leads to people talking above people’s heads. Explain the simple things and then move on to the complex this allows everyone to follow what you are saying.  

(5)    Use images and sounds not just words. A picture can convey a million words, a song can elicit an emotional response, both images and sounds can cause memories to be formed by association

(6)     Talk clearly and loud enough to be heard and understood

(7)    Embrace your audience with your body language, face them, be open with your arms and hands.

(8)    Enjoy the experience of communicating with others. Humans can sense emotions, if you are happy and sincere they will read this in you.

(9)    Listen to them communicating to you. Remember what your mother told you about having two ears and one mouth. Communication goes two ways, look at their body language, notice their facial expressions, listen to their words, appraise their knowledge, determine what level of technical jargon they understand, notice are the looking at you.  

This is just a very basic article. I hope it helps with your communication skills.

© Frank McGivney 16.06.16

Frank McGIvney & Co, Chartered Management Accountants fmcgivney@live.com 0469293891

Motivation post: No Retreat baby No Surrender

 Motivation Blog Post: Tenacity

I have always been a determined kind of a person. I set up my own business from scratch and have driven forward with what I felt was a significant level of drive and ambition, until I met one of my current business partners, Martin Finucane and realised I was only trotting behind his tenacity. His determination to sell our new product the Able Table is beyond phenomenal and is the major reason for the success of our business venture.

Its something people are lacking often in their work ethos or business plan. They have a great idea, they have the right attitude to risk but they fail because they wont keep pushing against the wall of consumer resistance and self doubt.

The lesson we all need to learn is not to give up, to keep pushing, until the resistance and obstacles crumble in response to the pressure we are exerting.

Negative responses, negative people and negative thoughts all need to be banished when you are self employed.

Positivity not only should but absolutely must be the corner stone of your philosophy and modis operandi.

Don't accept no for an answer, keep going until a sale is made, until the deal is struck or the suppliers price is reduced.

Its not just in sales but everywhere in an organisation. Purchasing, human relations, product design and in every aspect of a business there is only one road to success and that's with a positive determined attitude of no retreat and certainly no surrender.


(c) Frank McGivney 03 June 2016

Frank McGivney & Co Ltd, Chartered Management Accountants, Kells, Co. Meath, Ireland
Telephone 0469293891

Able Table

  Able Table: An Experience

The sounds of the exhibition faded as I watched him slowly approach the Able Table stand. I had observed him over the past two days, his face lacked a smile and his body seemed to hold a tension within itself, displaying a certain awkwardness to the world in which he meandered. At exhibitions some people tend to slide up kind of cautiously to stands, not sure if they want to attract the attention of an overeager sales assistant before they establish for themselves some level of interest in the product or service on display.  Others don’t hesitate, ready to do battle of the buying or ripping apart variety. He rolled up to us with a determined look in his face, a no nonsense gait born of a presumably difficult life climbing to the higher echelons of managerial position. He avoided our feeble attempts at eye contact. His focus was on the Able Table alone. The low mumble from the motor of his wheelchair stopped. His head facing down, he positioned himself in the correct slot. His arms rested on the table, he looked up and a tear trailed down my face as his demeanour softened, his body relaxed and the most wonderful smile uncovered itself from his stoic lips.

“This is the table I have been looking for all my life” were his words as he took out his laptop and started the process of accessing the Able Table for its potential as his future work environment. I met Martin’s eye and our anticipating lungs recommenced drawing in air.

The adventure had started nearly a year before the Mobility Exhibition in the RDS. Martin Finucane had been at home one day recovering from a serious back injury of his own when his wife, Esther, strolled in and told him to go out the back and build her a table to help in work. Esther works as a care assistant in residential facility in Navan helping people in wheelchairs. Martin who had just come out of a stint in a wheelchair himself said “Of course honey” and that was the spark which ignited a revolution in the care of disabled persons. The next day he started the whole process of designing a table which could facilitate in a social inclusive manner the care of a number of people in wheelchairs at the same time. Eventually after much toil and effort he came up with a design which both him-self and Esther were happy with and so was born the Able Table.

Over the centuries different inventions and creations have had the potential to change the lives of the whole of the population of the earth and some have in the most fundamental of ways changed the lives of specific sectors of the human clan. The Able Table is one such invention, it revolutionises the care and well-being of people who suffer with disabilities. It allows for hand over hand care for up to four people all at once. This may not mean a whole lot to able bodied persons outside of a care or hospital environment but if you have spent years and perhaps decades been cared for on a one to one basis with no social interaction, well then the opportunity to finally have a meal around a table with others is a fundamental life enhancing revolution in the quality of your daily life.

The Able Table also improves the lives of the carers and nurses who have dedicated their lives to the care and well-being of others. They are the ones who cry when they see Mary’s head rise from her chest for the first time as her arms rest on the table. They are the ones who return the smile of Tom who after years of gloom finally laughs at the stories been told from the other end of the table by Pat, a man who up until the Able Table has held his stories inside of himself. These amazing carers are also the ones who can now join in the conversation around the table and whose work load is eased because of the ease and convenience of the table’s unique and patented design.

People in wheelchairs can never usually fully sit into a table, the depth of their chair imposes a void between themselves and the point of contact with the table-top and hence distances them from other people. Martin decided this was not acceptable, that everyone deserves the right to be included in society at the most basic of levels. Prior to our table dinner time was a lonely half hour for people in care homes, as they ate or were feed on a one to one basis on individual trays. But the Able table is now here to create a complete paradigm shift in the way people perceive those in wheel chairs. No more are they outside of the social circle, they are now in the heart of it.

The effect the table had on the man at the start of this article is replicated on a daily basis with people in care facilities where Martin and his Step Daughter Cariosa bring the most wonderful gift anyone can give another, the gift of companionship, breaking the cycle of isolation and bringing them more fully into the human family.

We are appearing on the Dragons Den on Sunday the fifth of June. The June bank holiday when hopefully the sun shines and the dragons will see what I saw the day Martin came into me with his business idea. As an accountant I hear people’s stories on a daily basis but with Martin Finucane I saw not only a product, wonderful enough to potentially change people’s lives for the better, but more importantly I saw in Martin himself a man with something special inside of himself, something which cries out to be encouraged to blossom into the reality of a mission to improve the world for those with disabilities.

@DragonsDenRTE @siliconbarry @GavinDuffy @EamonnEquinn #TopTV @Alisoncowzer

 @Eleanor_McEvoy @able_table
https://www.facebook.com/theabletable/?fref=ts
www.abletable,ie

  © Frank McGivney, Financial Controller Able Table Ltd.    29.05.16

Growing older to reduce taxation

Your Age and Irish Taxation

Some people are old at forty and some eighty year olds are as young as the grandchildren they babysit.

We all grow old it is the basis of life in the universe. From the time of the Big Bang forward the universe has been steadily aging, cooling, and converting its energy from ordered into unordered forms in order to eventually over billions of years to come to an end. If that didn’t depress you then the good news is that in Ireland your age can offer some tax benefits

(1)    Pension Contributions: the amount of money which qualifies for tax relief that you can invest in a pension as a percentage of your income increases as you get older:

Age	Amount which qualifies for tax relief
Under 30 years	15% of net relevant earnings
30 to 39 years	20%
40 to 49 years	25%
50 to 54 years:	30%
55 to 59 years	35%
60 and over	40%

This is subject to a limit of €115,000 of income which can be taken into account and the fund can only be €2 Million before any amount drawn from it is taxed at the high rate of tax (2016 Levels)

(2)    If you are over 65 then then the first €18000 of annual income is exempt from income tax and €36000 for a married couple (increased by 575 for first and second dependent child and 830 for each subsequent child) Perhaps when you are 65 it would be a good time for them to be leaving home but if they do stay then at least your tax is lower.

(3)    If you are over 65You get an extra tax credit called the Age allowance which is worth €245 if you are single or widowed and €490 if married or in a civil partnership.

(4)    Retirement Relief is available on the sale of your business once you reach 55 and over

(5)    You are exempt from DIRT if you are over 65 and your income is below the exemption limits above. (If you are over 65 and have been charged DIRT then get on to us and we can help you reclaim it.)

(6)    Young trained farmers, there are a number of tax breaks and stamp duty concessions available for young trained farmers. These are farmers who are under 35 and who have completed certain farm related qualifications.

Like everything in the tax code your treatment depends of very specific details. Taxation is based on detailed laws and regulations and not on fairness (even though it is meant to attempt to attain fairness which is hard to see in the current system with a 12.5% tax rates for the biggest of companies). It’s important not to miss out on any tax breaks you might have coming to you due to your age.

© Frank McGivney, Frank McGivney & Co. Chartered Management Accountants, 0469293891 27/04/2016

How to Save €5360 in income tax

How to Save €5360 in income tax

Reducing your tax liability using Standard Rate Cut off Point

Figures used are the 2016 ones.

In Ireland you pay tax at the lower rate of income tax (currently 20%) up to point you exceed your standard rate cut off point after this you pay the higher rate.

Examples

(1)    Single Person their first €33800 of income is taxed at 20% and the balance (anything from €33801 and above) is taxed at 40%.

(2)    Single parent the first €37800 is taxed at lower rate then rest at 40%

(3)    Married couple one income the first €42800 is taxed at 20% then balance at higher 40%

(4)    Married Person two incomes the €42800 is increased by a max of the lower income or €24800. So the maximum at lower rate is €65600 (€37800*2)

Implications and Tax planning to maximise the amount of Income taxed at 20%

(1)    If you are a PAYE worker then there isn’t a whole lot you can do in relation to tax cut off points because you generally can’t split your wages between yourself and our spouse.

(2)    If you are a PAYE worker with the joyous position of having your choice of jobs at different wages rates then the ideal situation to minimise tax is to have one income at €42800 or less and the other at whatever adds up to a balance of €65600. So wife on €40000 then husband on €25600. This allows for all your tax to be at 20%.

(3)     If you are self-employed and earn more than €42800 per year then there are two scenarios

a.       Your spouse works. If he/she is on less than €24800 then you should set up a partnership or employ her in your company and bring her/his income up to €24800 and therefore reduce your taxable income by the same amount.

b.      Your spouse doesn’t work and has no other source of income then you should have him/her as a business partner or company employee. Then split the profits so at least one earns €24800 and the other earns the balance (or indeed any split as long as one is above €24800).

(4)    The Maximum benefit from 3b is for someone earning €65600 or more. If the €65600 is all in one spouses hands then the tax is €42800x20%+€24800x40%= €18480 (less their tax credits). If the income is spread then the full €65600 is taxed at 20% so €65600*.2=€13120. This equates to a saving of €5360 (€18480-€13120). There are also saving in Universal Service Charge which I will analysis in a different article. However there is one bite in the tail in that you lose the Home Carers allowance of €1000 (but still well worth it). It also may not be suitable for some people in certain circumstances such as those on social welfare.

The above is for general information purposes. Each individual case is different and you should get advice from your accountant on all tax planning issues.

© Frank McGivney & Co Ltd (046)9293891  Date written: 22.04.16