How do you know when to trust a Brand? (or An Economy Too Far!)

August 17, 2010 in Health & Safety, Reference, The Unexpected, UK

As this story unfurled I was reminded of James Hammond’s presentation at an O4RB Meeting on the subject of Brands or Branding  (business brands that is as distinct from those applied with hot irons).

For something like 30 years I had been protecting myself from the stresses and strains of uncertain motoring dilemma with my membership of the Royal Automobile Club.

Any car can break down or suffer unforeseen problems no matter how well it is serviced and, in truth I came to regard my RAC membership as more important to me than my statutory car insurance policy. The good old RAC and its devoted team never once let me down, and would always go that extra mile to get me back on the road as soon as possible.

On one occasion, after a broken metal aerial had been flung up from the road to spear my car’s fuel tank, the patrolman even went so far as to make a repair by cutting an unused rubber duck aerial from the roof of his own vehicle, and using it, together with (I think) some epoxy resin, satisfactorily plug the hole. That repair was still holding strong when some time later I had the fuel tank replaced under a claim on my comprehensive insurance policy.

However the RAC are not the cheapest bunch to belong to, and as many of their rivals advertise strongly, and appear to have a good and happy following I switched horses for one of the others last year to save some money. I mean why not! They all offer the same service don’t they?

Just short of a year later I am here to tell you that nothing is further from the truth.

Just a few weeks ago, while in the Lake District with my wife, our caravan and trusty old land Rover Discovery we discovered a broken exhaust pipe hanging dangerously below the Landy.

No problem I thought, I’ll just ring my trusty break down service and ask them to send a man to safely secure the pipe so I can drive to an exhaust centre and have a new one fitted. You may imagine my surprise when an hour later I was visited by a man with an enormous recovery vehicle but hardly a tool kit to his name. All he was able to produce was a screwdriver and some cable ties (plastic cable ties) with which he tied up the exhaust pipe and drove off into the midday sun. (Oh yes we were in Coniston during the first rainless week for 6 weeks – it wasn’t all bad luck.)

When very shortly afterwards I again rang the breakdown firm they acknowledged the shortfall in their service, and agreed that if I located an appropriate exhaust centre they would provide recovery of our Landy to that centre the following morning. This was done but meanwhile we needed to request a hire car. No problem with one being provided but it had to be brought to us so we could be taken in it to the hire company’s office many miles away to complete the hire agreement before we drove it back to Coniston

All this wasted a day and a half of a one-week holiday!

So there is a lesson here. Just because the RAC has a proven and reliable brand it is a mistake to assume that any similar organisation can even hold a candle to its level of service. I have been extremely happy to rejoin the RAC and pay them whatever they ask.

Now if I can generate for my business the sort of Brand that the RAC has!!

Emergency Budget – ‘Tough but fair’

June 23, 2010 in Budget News, Finance, SME to SME

A ‘tough but fair’ budget was delivered by Chancellor George Osborne on Tuesday 22 June 2010. He described the spending cuts and tax increases as being ‘unavoidable’ due to ‘the years of debt and spending’ by the previous Labour government.

The Chancellor tried to reassure us that he was being ‘fair’ and that ‘everyone will pay something but the people at the bottom of the income scale will pay proportionately less than those at the top’.

The key announcements included:

  • VAT Rate rise – As anticipated the VAT rate will increase from 17.5% to 20% with effect from 4 January 2011.
  • Personal Allowance increase – The personal income tax allowance is to increase by £1,000 in April 2011 to £7,475. This is worth £200 a year to a basic rate taxpayer.
  • Capital Gains Tax increase – The Capital Gains Tax rate for higher rate taxpayers will increase from 18% to 28% from midnight tonight. It remains at 18% for basic rate tax payers.
  • Entrepreneurs Relief extended – Entrepreneurs relief has been extended to a rate of 10% on the first £5m of gains as opposed to the first £2m.
  • Corporation Tax Rate cut – The Corporation Tax rate will be cut by 1% each year over the next four years until it reaches 24%. The Small Companies rate is to be cut to 20%.
  • National Insurance rise to stay – The National Insurance rate increases announced by labour remained intact and will still take place however the threshold at which employers start to pay will rise.
  • No change to Cigarettes, Alcohol and Fuel – No changes were made to duty on cigarettes, alcohol or fuel and the plan to increase the duty on cider from July was scrapped.
  • Freeze on Child Benefits – Child benefit is to be frozen for the next three years.
  • Changes to Tax Credits – Tax credits will reduce for families earning over £40,000 next year but for low income families they will receive more Child Tax Credit with the amount per child increasing by £150 above the rate of inflation.
  • State Pensions – The state pension is to be linked to earnings from April 2011 and is guaranteed to rise in line with earnings or 2.5% whichever is greater. The increase in the state pension age to 66 is to be accelerated.

For further details on the key announcements visit our website www.georgehay.co.uk where you can download a copy of our budget summary.

March 2010 Budget

March 25, 2010 in Budget News, Finance

Budget or a pre election broadcast?

The Chancellor, Alistair Darling gave his final budget before there is a general election on Wednesday 24th March. He made very few announcements as the majority of tax rates and allowances had already been released in previous Budgets and the Pre Budget Report given in December. The key announcements were:

  • Annual Investment Allowance increased to £100,000 for capital expenditure by businesses
  • Entrepreneurs Relief doubled to £2 million
  • Relief for first time buyers from Stamp Duty Land Tax on residential transactions up to £250,000
  • VAT Registration threshold increased to £70,000

Our commentary on the budget is available on The George Hay Chartered Accountants’ website at www.georgehay.co.uk which gives further information on announcements made.