MiP News JANUARY 2011 CONTENTS 1
6 Useful links 7 MiP events 7
Editor’s note This quarter I have tried to give the newsletter a MiP feel with contributions from Tristan Maynard on PETs. I know many people have been concerned by the way CIMA has increased MiP Fees for 2011 and the letters
section shows a couple of examples. A good place to see what has been discussed on the topic of MiP fee increases is CIMAsphere. Philip Badger, Editor
Current affairs The power of questions Many accountants sell their services based on the answers or solutions they provide. Our menu of services constitutes a set of solutions to clients’ problems. There are several issues with this, firstly, as soon as you show up with a solution, clients hear that you are selling. Secondly, they start thinking of why they don’t need it. Thirdly, they will often just change the question, e.g. focus on a different priority, leaving your answer with a serious lack of impact. If a prospect is not captivated by your question, how can you hope to impress them with your answer? We all need to engage with decision makers. Often with these all important decision makers we don’t yet know, who does and who doesn’t take emails or calls from strangers, no matter how fabulous the stranger’s solution may be. To make matters more complicated, these people rarely (now) sit in conference rooms, read articles or go networking. So they are hard to meet in the traditional way. Research Led Marketing (RLM) is one of the most successful of our value centred approaches. Basically, this means going out with a question rather than an answer. When properly executed, RLM: • is more engaging for prospects, as long as it’s professionally done • produces value in advance of any sales conversation, in turn, inviting interest, enquiries and leads • provides a practical vehicle for alliance partners to start working together and collaborating • reaches senior decision makers that are beyond the reach of promotional means • sharpens the value proposition and informs you about how you need to position your services • provides unique material for your keep in touch system.
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Current affairs So what sort of questions are we talking about? Here are some examples to help an accountant get started: • y ou might explain that they are testing a new cash management tool and ask if you could assess the client’s cash flow management system • y ou could explain that you would like to feature a successful business in your next publication and you would like to interview them • y ou might be putting together a presentation about how accountancy is evolving and you wish to get their perspective (your alliance partners can be opening the door for you) • y ou have been asked to customise a specific service for their market and you want to do some research so that your offer has the most relevance and fits with other initiatives • you have spotted a trend in the previous year and you are checking for wider context. These are just examples and I have included them here because many people struggle with defining their questions. Sometimes it’s hard for us to define our own questions; it’s easier for others to see what they might be. Once you have your questions, what do you do next? Many professionals would rather starve than ask for referrals. Why is this so? Obviously you need to schedule some meetings or telephone calls. This is where your alliance partners come in; you go to them with your compelling question and you discuss with them the people you need to interview. If your question is compelling (and they have a real network) then they should be able and willing to open the door. And if not, are they really alliance partners? One clear caveat here is no selling! If it’s a research meeting, it needs to be genuine research. No offers, pitches or ‘we could help you with that’. However, as the meeting ends, it is perfectly reasonable to ask ‘is there anything from our discussion today that is of current relevance to you?’ But beyond that and gaining permission to stay in touch (usually as sharing results), that’s as far as you can go. If our collective experience is anything to go by, the chances are that the success of your first RLM project will be pertinent in determining what the second (compelling one) should be. All the more reason to get started quickly and not to over engineer the first one. Its primary purpose is to determine what the real questions are. Once you get even part way into a series of conversations around a compelling question, some things start to happen very quickly, even before you are halfway through: • you get a boost of motivation, which means that making some of these calls gets a whole lot easier • you see that some of these alliance partners can actually help you or not, they have hopefully also played a part in refining your questions • each person you are interviewing starts suggesting some more people to talk to, perhaps prompted by you • they also start asking when you will have the results, which shows they are interested • you start to create unique material for your keep in touch system. And perhaps even a toolkit • and also for conference presentations, if this is your thing. At least it’s a valuable talking point over lunch • and finally, those clients who just see you as a book keeper now see a whole other dimension to your service. MiP News | 2
Current affairs This latter benefit is really significant. Often, the easiest people to reach are the people we already know but who have stereotyped us (i.e. commoditised us). They see us as the people who produce the accounts or management reports and it doesn’t cross their minds that we can also help them get their strategy or pricing right. For more information about RLM, see the following complimentary webinar information. Reserve your webinar seat now at: www1.gotomeeting.com/register/477975969 ‘Confidence, like art, never comes from having all the answers; it comes from being open to all the questions.’ Earl Gray Stevens
Checks and balances kept by First Tier Tribunal It is always good to hear that the checks and balances in the enquiry system do work at times. This was illustrated by a case heard by the First Tier Tax Tribunal in August 2010 and reported on 27 September 2010. The case is called Stephen Ho – TC00669. Mr Ho primarily worked from Heathrow as a taxi driver. HMRC was able to demonstrate that Mr Ho had been allocated cab tags at Heathrow on two days when his own records indicated that he had not worked. The inspector also prepared a cash flow summary which suggested that there were occasions when Mr Ho had negative cash on hand, which HMRC said indicated he must have had additional unrecorded cash takings. On the face of it HMRC had broken the records and had a fairly strong case. The inspector said that based on his findings, Mr Ho’s own records were worthless and should be disregarded and he calculated the taxable profits assuming that Mr Ho had two fares from Heathrow to Central London each time he was allocated a cab tag. Moreover, the inspector assumed that an experienced driver like Mr Ho would be able to find tourists in Central London who wanted to travel back to Heathrow on each occasion. Mr Ho did not agree with this and the case ended up before the First Tier Tribunal. After reviewing the facts and figures prepaid by HMRC, the members of the tribunal criticised the way that HMRC had gone about things. They did not accept that an experienced taxi driver would be able to find passengers in Central London who wanted to travel to Heathrow, bearing in mind a taxi for hire must take whichever passengers hail them. They also found that the inspector’s cash flow workings did not take proper account of the contributions to household expenses made by Mr Ho’s partner and furthermore the way the cash flow had been constructed was flawed. The tribunal concluded that Mr Ho’s tax return did not need to be amended. For many years HMRC inspectors have tried to break a taxpayer’s records and then substitute their own estimated numbers. This case was a salutary reminder to HMRC that they need to demonstrate that their alternative calculations must be based on a suitable evidential foundation. This reminder also goes for all small businesses that need to ensure that the quality of their records is good. This will be key in the event of HMRC enquiring into their results. This and other reported cases indicate that the First Tier Tax Tribunal and their members are showing no signs of cosying up to HMRC and are taking a professional and independent view. For full details of this case visit: www.financeandtaxtribunals.gov.uk/judgmentfiles/j5036/TC00669.doc Peter Fry Professional Tax Consultancy T: 0845 854 3334 E: email@example.com www.protaxconsult.com MiP News | 3
Current affairs New MiPs How to get the best out of networking events One of the first things I realised as a new MiP going solo was that I was the marketing department. No one else was going to promote my business unless I did something about it. Networking has been called word of mouth marketing. Most CIMA members hate the idea of self-promotion and so here are a few suggestions that may help: • Prepare yourself. Have business cards with your name and contact details on them and a short description of what you do. I favour business cards that are blank on the back because I make notes about the person on the back of their card. • Create an elevator pitch. This is a 40-60 second summary of your name, your company and the benefits of what you do. Most listeners do not care that you have been in business for one minute or one decade. They do want to know what the benefits are to them or to businesses they may come across. Remember the slogan WIIFM: what’s in it for me? • Be prepared to answer the question. ’So what would be a good referral for you?’ This is your opportunity to be as specific as you can about what sort of clients you seek. For example, you may have expertise in dealing with new start businesses and have a tailored package to get them started. Mention this as clearly as you can and in a jargon-free manner. • Do two things your mother told you not to do. Speak to strangers. If you go to a networking event and don’t talk to anyone, then you have wasted your time and money. ,Use the ‘f’ word. By this, I mean follow up. If you have promised to send someone something or pass on a link to a website or meet for coffee, then do it. If you cannot be relied upon to do a simple task like this, then why should the person you are talking to trust you on some bigger task? • D on’t try to sell. An unwritten rule of networking is do not sell. Of course, you should listen to what the other person says and try to explain what you do. However, it’s much better to try to help the person by, for example, seeking out suitable contacts for them. Everyone hates being sold to, and the networker who thrusts a business card in your hand and moves off to the next person is unlikely to make any useful contacts. • B uild relationships. It is unlikely that you will generate leads at every networking event. It takes time for people to get to know you and what you do, to get to like you and to trust you. Think of networking as a marathon rather than a sprint. • L ook beyond the room. There may be 50 people in the room. You may get to speak to 10. However, it’s not just the 10 you meet who are potentially important, it’s the 500 people that each of them know who could be of interest to you. Any feedback or stories of success or failure are welcome. Send them to: firstname.lastname@example.org Ian Ross has been a MiP since 2000. He specialises in restoring confidence to the business numbers. He runs an electronic network called MiPnet where MiPs can share problems, ideas and the occasional work opportunity. To find out more, email email@example.com
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Current affairs Professional Oversight Board The Professional Oversight Board (POB) completed a review of the monitoring arrangements of accountants in practice in all UK professional bodies. As a result CIMA reviewed and streamlined its monitoring processes for all its MiPs through revised MiP regulations, a new online Practising Certificate application system and improved support material for starting out in practice. CIMA, along with all other UK professional bodies, have now given their formal response to POBâ€™s review, which can be accessed here. For more information on the new MiP regulations, support guidance and how to apply for a Practising Certificate please visit the Members Handbook. Elaine Smyth Project Manager, CIMA Professional Standards and Conduct
Management accounting in the NHS Ian Mumford has written a very interesting article about how the management accounting in the NHS might be improved. Whether you work in the NHS or are just interested, the article will be of great benefit. Please email firstname.lastname@example.org for a PDF copy of the article.
MiP online renewal process â€“ call for feedback The Members in Practice Management Panel (MIPMP) wish to advise that they are reading and following comments by members in public forums and via email in regard to the new online MiP registration process and, in particular, the increase in the fee charged by CIMA to MiPs. The MIPMP would ask every MiP who has completed this process to give provide their feedback on CIMAsphere, whether good or bad and about any aspect of the process, including the fee increase: http://community.cimaglobal.com/groups/content/ member-practice The MIPMP are following up these issues with CIMA and will keep you apprised of the results of our approaches.
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Useful links CIMA Insight CIMA Insight is always a good place to go and I have picked out a few examples that are relevant to CIMA MiPs. If you are new to working in practice and want to know how other people have done it, a selection of our Members In Practice Management Panel have talked to Philip Smith, the article makes interesting reading: thinking of working in practice? CIMA has undertaken a survey of what people are using in todayâ€™s organisations in terms of management accounting tools and techniques: major survey benchmarks accounting tools
HMRC extends information powers finance bill Next yearâ€™s finance bill will include an overhaul of the controversial information powers which control how and when HMRC can ask for information from taxpayers and what types of data it can request. Finance Bill 2011 will see 25 of the existing powers repealed and replaced with a new single power. If you think you need to know more, please visit: www.accountingweb.co.uk/topic/tax /hmrc-extends-information-powers-financebill-2011/467148
New accounting CPD website launched A new website has been launched by Nelson Croom offering high quality and in-depth CPD courses online: www.accountingcpd.net The courses are accredited by CIMA and you may know two of their authors: Robin Tidd, a CIMA Council member and Past Chair of CIMA MIPMG (2000-2005) and also David Allen, a past president of CIMA.
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MiP events Date for your diary The 26th annual MiP conference will take place on 24 and 25 June 2011 at Heythrop Park.
MiP skills workshops Business performance improvement and KPIs Saturday 22 January, 10am-4pm Speaker: Robin Tidd FCMA Ramada Coventry, The Butts, Coventry, CV1 3GG ÂŁ120 plus VAT including lunch and refreshments
Regional meetings North West regional meeting Sunday 6 March, 10am-4pm Britannia Country House Hotel, Palatine Road, Didsbury, Manchester, M20 2WG No charge
Letters Anyone who is a member of the LinkedIn CIMA MiP group will be aware of a long running stream about MiP fees and their increase. It seems bonkers to most of us that during this time of austerity, CIMA are increasing the fees MiPs have to pay. Of all CIMA members we are the ones least equipped to meet extra fees. Unlike many employed members who have their fees paid for by their blue chip company, we must pay for our membership and MiP fees out of our own pockets. On top of that, most of us feel that we get little from CIMA. The CIMA MiP days up and down the country are organised by MiPs themselves, but Financial Management magazine has very little relevance to MiPs and regional events are often big company biased. Those of us who assist with the vetting of new MiPs donâ€™t even get a reduction in our fees! So what value are we getting from CIMA HQ for our hard earned cash? And word on the street is that CIMA are looking to push the fees up even higher in coming years! <Last remark deleted for the benefit of the squeamish!!> Fiona Bevan
Response from CIMA CIMA understands and has taken note of the concerns and dissatisfaction expressed by some Members in Practice regarding the increase in fees. These are not related to benefits but rather a response to rising regulatory and supervision costs. CIMA must respond to the views of external regulators with statutory powers but in doing so manages to comply with regulatory requirements at a significantly lower cost than competitor bodies and other external supervisors.
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And finally... MIPMP Mark Allen Chairman 01789 294484 email@example.com Philip Badger Editor T. 01733 752677 E. pbadger.manacc@ ntlworld.com Ray Baxter Vice Chairman T. 02890 998004 E. firstname.lastname@example.org Ray Ankrah Vice Chairman E. email@example.com Paul Koumi Immediate Past Chairman T. 01782 286334 E. firstname.lastname@example.org Secretary Dr Ndubuisi Anomelechi-Onyeodi Mike Houldershaw Treasurer T. 01205 280094 E. mike@sheafHF.com Elected members Philip Badger Tony Boffey Antony Holdsworth Stephen Milne Su Moore Kwasi Okanta-Ofori Alan Scott Kim Swarbrick Robin Tidd
And finally... (Tax) Tips and Tricks – PETs No, not the giddy heights of dealing with tax customers: ‘Potentially Exempt Transfers’ under inheritance tax. This note is perhaps more germane to all of us ordinary compliance MiPs that deal with the day to day tax affairs of people in business, especially the self-employed. There are three golden rules in tax planning: • claim it first. HMRC won’t volunteer it • what you can get off me, you can keep • it’s not what is in the tax law that is important, it’s what is NOT set out in the tax law that needs to be studied. Following on from the highly successful Claiming Home Office Expenses (published by the author at £50 and guaranteed to save tax customers at least £1,000 in tax deductibles) mention was made of a 2009 tax tribunal case. The HMRC tribunal finding confirmed that 60% of the costs of a pet dog could be treated as a business expense, re: security facility. Your guard dog can be a tax deductible expense. What? you say. Is that really relevant? Think about it: we beat our brains out trying to maximise the car apportionment, the home office claim, meals expenses, writing down allowances, clothing allowances, etc. So, if we can build another routine into our tax planning without too much effort, we can have another feather in our tax caps. So say: • I don’t have a dog, I have a security facility • I don’t have a cat, I have a rodent control resource. Anybody in business who has had a break in or seen their stock or business records chewed by rats and mice will perhaps relate to this. The cost of preventing these disasters will compare with expensive burglar alarm systems, Rentokil contracts, lost records and damaged stock: Security dog Rodent-suppressor cat £ p.a. £ p.a. Food @ £2/ £1 per day 730 365 Insurance 100 40 Vet bills and chipping 100 50 Holiday home (two weeks) 220 120 Leash, bedding, equipment, etc. 50 20 Total cost 1,200 595 60% tax deductible 720 357 As a tax customer said the other day: ‘better off in my pocket than theirs.’ EIM32430: Where a blind employee keeps a guide dog at his or her own expense in order to move from place to place in the performance of the duties of his or her employment a deduction under Section 336 ITEPA 2003 can be given. The deduction should reflect the reasonable cost of keeping and replacing the guide dog. You should not try to apportion the cost between business and private use. EIM68330 and EIM68160 allow equally generous deductions for the costs of carrying and caring for a working dog for prison and police dog handlers.
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