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Beware of the Milkmaid

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The milkmaid...
No, this is not another edition in the series of Halloween excitement here at Froodee. However, this article can be scary if you find yourself counting the last few pennies in your pocket. It was way back in elementary when I first heard her story. My uncle had given me a collection of Aesop’s Fables and one of the stories that struck me was the tale of “The Milkmaid and Her Pail.” Of course, back then, I was more fascinated with the illustrations rather than the story itself.

If you haven’t read the story, drop by here for a while and indulge yourself in a short fable.

However, for those who know what story I’m talking about, let me continue.

I often find the milkmaid emerging in me. In the story, she dreams about what she could have in exchange for her pail of milk. She thought of buying eggs. Said eggs would eventually grow into healthy, young chicks which would consequently become fat chickens and so on and so forth…

While there is nothing wrong with day dreaming, the milkmaid became too lost in her own fantasies that she accidentally dropped the pail of milk and with it spilled all of her dreams… My own version of the milkmaid often makes herself known when I am dealing with money.

I find myself unconsciously spending more than what I really should because at the back of my mind, I know I’ll receive more soon. Unfortunately, soon is not enough and I often end up having only a few bills left in my pocket. I don’t even get to save anything anymore. I also fantasize a lot about the material things I could gain and I get too involved with these thoughts that the word “budget” doesn’t even exist in my vocabulary anymore.

A lot of people don’t even realize the milkmaid in themselves. As for me, I am much more careful with my money now. According the the milkmaid fable, “Don’t count your chickens until they are hatched.” In my case, “Don’t spend your money until they are actually in your hands.”

System reforms can solve the problem of tax avoidance

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Based on what a group of business leaders have discussed in a recent gathering, a comprehensive reform in the tax system is the most effective solution to the problem of tax avoidance.

According to a recently conducted comprehensive study on tax avoidance, the Institute of Directors (IoD) has signified its advocacy for the redesign of the entire tax system in order to remove the current artificial boundaries between things that are considered as close commercial substitutes.

The employers’ organisation has been insisting that a swift action on the problem is absolutely needed what with taxpayers getting more and more creative with regards to finding ways around the anti-avoidance legislation and the Government formulating an increasingly complex legislation as a response to these methods.

According to Richard Baron, IoD’s Head of Taxation, “Reforming the tax system would obviously not be an easy task. It would mean some drastic changes. However, the task may still be worth undertaking as the current approach is leading to an impossibly complex and confusing tax system.”

The IoD report emphasises the kind of moral ambiguity that is associated with the commission of tax avoidance. The report also acknowledges the arguments that are forwarded against avoidance like competition distortion (this is when a person who performs extensive tax avoidance pays less taxes than a person who does not). But even though it may be true that a business can present more avoidance opportunities compared to others the real fault still lies with the tax system.

Flat tax pushed by small businesses

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A large majority of entrepreneurs are calling for single flat rate to replace Britain’s tax regime, which business owners said is outdated.

According to a study done by business advisor Tenon, seventy-five per cent of company directors said that they back the adoption of a single flat tax in the UK as a replacement to the incumbent system and its many fees.

Only 18 per cent of business owners said that they were happy with what the government is offering, while more than seven in 10 felt that it has become too complicated.

Company formation and business solutions experts said that the numbers indicate an overwhelming call for change and should be seriously looked into by the government.

Start-ups firms now have easier access to loans

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Many start-up businesses will now have an easier time getting access to finance as changes to a government loan scheme has resulted in the expansion of the eligibility although the access to young businesses have been limited.

Based on the new rules, applicants to the Department of Trade and Industry’s Small Firms Loan Guarantee may now qualify for a loan with an annual turnover of up to £5.6m.

But the new rules will also limit the funding to businesses under five years old as a way of boosting the growth rate of start-up businesses and young firms.

Company formation and business solutions experts welcome the new rules saying that it will surely boost the number of individuals who might want to go into business on their own.

Government to probe cheque clearing

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The amount of time it takes for cheques to clear could possibly be shortened following a declaration that the Office of Fair Trading
(OFT) will investigate to find out the demand for cutting the three-day process.

The probe will involve banks, building societies, consumer group and trade groups with the aim to determine whether there is a clamor and significant benefits for businesses and individuals if the cheque clearance time is hastened.

Although paper-based payments has been steadily declining in recent years, cheque payments still remain a popular mode of payment by and from small businesses for the transaction of goods and services.

The UK payments association APACS has confirmed the lowered cheque volumes because of the increased use of plastic cards, direct debits and e-payments. But the association also said that cheques still remain popular among the enterprise sector for paying suppliers. Consumers also still use their cheque books to pay for one in six regular bills.

All over Europe, the growing acceptance of debit cards followed by credit cards has further decreased the market share of cheque payments. The drop has been most notable in Germany where only one per cent of the population prefer cashless payments.

France and the UK have remained dominant issuers but both countries have been suffering from marked declines. The Netherlands, Spain and Portugal are also experiencing a slump in paper payments.

Company formation and business solutions experts hope that with the OFT’s investigation any changes in the system will only benefit the country’s entrepreneurs and businessmen.