upfront
The CurrenT Affairs Panel edgewater associates limited
I am a local business owner; how do I protect my profits against the loss of a key member of staff?
Q.
3. Q.
I noticed a lot of local restaurants have been closing lately: do you think there is a future for the restaurant sector in the Isle of Man?
I am in the retail sector; is this new FATCA agreement going to have an impact on my business?
A.
A.
A.
The absence of an important employee can damage the business in a number of ways. In a moment it could lose key skills, experience and contacts. This is why you should consider taking steps to protect your business now.
We see many Isle of Man eateries change hands and many people are prepared to ‘give it a go’, perhaps to fulfil a burning ambition to own their own restaurant having watched Masterchef for the last few years! In reality, and no matter how good they may be, some restaurants are doomed before they open the doors - even an historical stigma with the location can be a major factor.
Q.
2.
The death, critical illness, or disability of a key member of staff can have a detrimental effect on the performance of a business, in the short term at least, and protecting business owners’ earning capacity should be high on the list of priorities. Typically, key employees will be the senior management or partners, but there is also a case for personnel with fundamental roles in the business.
Key Employee Protection insures against the financial impact of such an event by providing a cash injection to the business if a key employee dies or suffers a critical illness. It can also provide a regular income for the business if the key employee is temporarily disabled and unable to work. The level of insurance can be calculated under different bases, such as multiples of business profits or salaries of the key personnel, and a proportion of the payroll cost, depending upon the type and structure of the business. Such cover won’t stop the unthinkable from happening, but it can make dealing with the financial consequences a little easier.
because quality matters
The Claremont Hotel
The issue is simply one of supply and demand. I hear many times that there is a need for more restaurants, expanded retail, more night life options etc, but the problem has always been the volume of trade needed to first invest in and then maintain these businesses.
Of course, the better run operations have more of a chance and there are a number of established restaurants on the Island that have traded for many years and enjoy a regular and loyal customer base. Ultimately, the only way to ensure there is a thriving and high quality dining scene on the Isle of Man is for the local population to get out there and support it. In effect; use it or lose it!
KPMG
4.
FATCA is a piece of US tax legislation designed to force financial institutions around the world to tell the US tax authorities about US citizens who hold money or investments with them. Other jurisdictions have since indicated that they also want to put FATCA style agreements in place so that their tax authorities know where their residents have their financial assets. The proposed FATCA agreements with the US and the UK are unlikely to have a direct impact on a business in the retail sector unless that business is conducting an element of financial services business. For example, if a supermarket was offering banking services then the banking arm of that supermarket would have to comply with FATCA. If a retail business is not offering financial services then the only likely impact on it will be that its bank and any other financial institutions of which it is a customer may ask it for information about its shareholders. This is because the bank has to categorise its corporate customers and, for certain corporates, the bank will have to look through to the underlying shareholders to identify whether they are citizens, or residents, of the US and/or any other country which implements FATCA.
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