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Written by Kenneth Doyle - e*Analyst

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 asrepparttar income is drawn fromrepparttar 125129 company byrepparttar 125130 owners as dividends from their shares andrepparttar 125131 amount of dividends drawn is restricted belowrepparttar 125132 40% band rate (i.e. œ31,063 for tax year 2002/03). That way,repparttar 125133 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 withinrepparttar 125134 higher rate bracket of income tax (i.e. above œ34,515), they will be taxed at 22.5% onrepparttar 125135 excess, which of course will increaserepparttar 125136 tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates.

The most catastrophic scenario is whenrepparttar 125137 director takes his reward fromrepparttar 125138 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,repparttar 125139 tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is thatrepparttar 125140 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 increaserepparttar 125141 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 onrepparttar 125142 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 onrepparttar 125143 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 illustraterepparttar 125144 above, let's take a simple example. We have a limited company and a sole trader. They both make œ60,000 profits each inrepparttar 125145 tax year 2002/03. We assume thatrepparttar 125146 company director takes a salary equal torepparttar 125147 amount of his personal allowances (untaxed income) of œ4,615 andrepparttar 125148 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 thatrepparttar 125149 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 helprepparttar 125150 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 yearsrepparttar 125151 Inland Revenue has tried to reclassifyrepparttar 125152 self-employed. The 1% in NIC hike on staff salaries aboverepparttar 125153 NIC threshold from next April adds to bothrepparttar 125154 employees' and employers' tax burden and may more than offsetrepparttar 125155 saving fromrepparttar 125156 corporation tax zero rate onrepparttar 125157 first œ10,000 of profits.

Online Customer Service... Do it well or die.

Written by Kenneth Doyle - e*Analyst

Online Customer Service... Do it well or die.

There are some fundamentals in marketing anything, ONline or OFFline.

EXCELLENCE in customer service ranks very highly on this "must do" list... and digital marketers ignore this fundamental rule at their own their peril.

Why is it that some digital marketers think thatrepparttar basic rules of marketing only apply torepparttar 125128 OFFline world?

Excellence in customer service has ALWAYS been one ofrepparttar 125129 tenets of a successful business. It has always maderepparttar 125130 difference between an average business and an extraordinary business.

For example, examinerepparttar 125131 success of a major, international hamburger chain. Do they sellrepparttar 125132 best hamburgers inrepparttar 125133 world?

No, they don't. However, one thing they've got completely right - and this company spends huge amounts of money training its staff to get it right - is customer service.

This company treatsrepparttar 125134 customer service aspect of its business withrepparttar 125135 respect it deserves...and this is one ofrepparttar 125136 primary reasons its become an international chain.

It has a Customer Service FORMULA.

So, how does this piece of information about an International Hamburger Restaurant chain relate to you and your web based business?

MULTIPLE effects X 10

Very simply it's this. Webmasters need to pay very careful attention torepparttar 125137 elements that create business success in an offline world, and recognize that inrepparttar 125138 digital worldrepparttar 125139 critical aspects of offline business success have just compoundedrepparttar 125140 game tenfold.

So, is there a FORMULA for ONline Customer Service?

Well, yes there is... I've just made one up :-)

T.. R.. U.. T.. H

T=TRUTH creates trust. Tellrepparttar 125141 truth at ALL times. Unless you're an e-sociopath you'll forget your lies anyway. So, why bother?

R=RESPONSE, automatic. Always have an automatic - "Thank you for your query. We will respond in person within 24-48 hours" - type message in place. This is VERY easy and inexpensive to set up.

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