Wanna know how to *really* boost your website income?

Written by Chuck McCullough

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 102591 company byrepparttar 102592 owners as dividends from their shares andrepparttar 102593 amount of dividends drawn is restricted belowrepparttar 102594 40% band rate (i.e. œ31,063 for tax year 2002/03). That way,repparttar 102595 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 102596 higher rate bracket of income tax (i.e. above œ34,515), they will be taxed at 22.5% onrepparttar 102597 excess, which of course will increaserepparttar 102598 tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates.

The most catastrophic scenario is whenrepparttar 102599 director takes his reward fromrepparttar 102600 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 102601 tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is thatrepparttar 102602 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 102603 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 102604 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 102605 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 102606 above, let's take a simple example. We have a limited company and a sole trader. They both make œ60,000 profits each inrepparttar 102607 tax year 2002/03. We assume thatrepparttar 102608 company director takes a salary equal torepparttar 102609 amount of his personal allowances (untaxed income) of œ4,615 andrepparttar 102610 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 102611 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 102612 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 102613 Inland Revenue has tried to reclassifyrepparttar 102614 self-employed. The 1% in NIC hike on staff salaries aboverepparttar 102615 NIC threshold from next April adds to bothrepparttar 102616 employees' and employers' tax burden and may more than offsetrepparttar 102617 saving fromrepparttar 102618 corporation tax zero rate onrepparttar 102619 first œ10,000 of profits.

Changing faces of affiliate programs?

Written by Chuck McCullough

Its hard to have a discussion about affiliate programs without mentioning Amazon.com. They are considered to berepparttar pioneers of affiliate programs. And with over 300,000 affiliates, its hard to argue that point.

But affiliate programs are changing. Many, many companies are realizing thatrepparttar 102590 best way to sell products and services onrepparttar 102591 Internet is to recruit affiliates. Along with this comes a form of competition. Affiliate program managers want you to sell their products, notrepparttar 102592 products of their competitors. How do they make sure that you stick with them and not defect torepparttar 102593 other side? They do their best to make their program more attractive to you.

There are many ways to make a program more attractive to potential affiliates. They can offer a higher percentage ofrepparttar 102594 profits, and/or they can offer more benefits. Benefits can come in many forms, butrepparttar 102595 topic of this discussion will berepparttar 102596 benefits that come fromrepparttar 102597 way sales and visitors are tracked.

Let's bring Amazon.com back intorepparttar 102598 limelight for a minute. They are huge...everyone knows about them...everyone knows that you can create a site, add some good content, bring in a highly targeted audience, and sell them books! Simple enough...create a site with a good topic, drive traffic to it, send them to Amazon, and get rich. But...its been tried before...and guess what...not that many of those 300,000 affiliates even earn enough to getrepparttar 102599 minimum $25 check inrepparttar 102600 mail every quarter.

Why? Is it because you have 299,999 competitors out there selling Amazon.com books just like you are? I'm sure that plays a part, butrepparttar 102601 real reason isrepparttar 102602 way you are credited for a sale. You work hard to create a website full of content, and work even harder to promote it and bring visitors to your site. Then, what do you do with that coveted visitor? You wisk them off to Amazon to become their life-long customer, and never to return to your site again!

That may not seem fair to you, but can you complain? They give you a whopping 5% ofrepparttar 102603 sale, maybe even 15% on some ofrepparttar 102604 books if you are lucky. Or, worse yet, they bookmark Amazon.com, and go back to buyrepparttar 102605 books tomorrow and you don't even getrepparttar 102606 5%. Either way they are gone. That precious visitor that could have been a life-long customer of yours is now off to Amazon.com. They will buy a book or two to test outrepparttar 102607 process. Then after their books arrive, they will merrily open up their browser and type in http://www.amazon.com and spend their entire paycheck buying books.

How much do you get from this return visit? Well, it WAS your visitor after all, right? Unfortunately every penny of that visitor's paycheck will fall into Amazon's pocket. Of course you have to feel sorry for Amazon, though. They aren't making any money after all (violin music playing inrepparttar 102608 background).

What happened? The same that happens with many affiliate programs. You get paid per click, per lead, or per sale. From that point on, they own that customer.

But I'm happy to report that times are changing! Companies are starting to look for better ways to compensate their affiliates for referring customers to them.

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