Category Archives: Economic Indicators

Lambert Chapman LLP’s Paul Short considers the death knell for Child Benefit

There has been much press coverage of the Coalition’s intention to end child benefit for higher rate tax payers from 2013.

 It is likely to be sudden death.  If you are a higher rate tax payer in the relevant year, you will lose the relief.

It is worth over £1,000 per child, so it will be very useful to some of our clients with 2, 3 or more children qualifying.

Lambert Chapman LLP will be reviewing the position for our clients over the next year and will advise of any possible actions which might be taken to retain the benefit.

This may, for example, be the transfer of capital for one spouse to the other spouse or partner to prevent higher rate tax exposure on one of them.

Owner/managers may be able to accelerate income into 2010/2011 and 2011/2012 to avoid higher rate exposure in 2012/2013.

The devil is, of course, in the detail so we will be watching developments closely to see what the Government do put forward and we will be amending our strategies accordingly.

We are also seeing a restriction in the relief available in respect of childcare vouchers, restrictions on the amount of qualifying pension contributions one can make in a year and also national insurance increases.  Again we will be shaping our advice as the precise measures are established.

We are keen to hear from business owners, in particular, who are concerned that they may be affected by the changes and need to recalibrate their income but may not yet have received advice on this point.  Equally we would like to hear from other professionals who might need advice themselves or who have clients needing advice. Please call Paul Short on 01376 326266 in the first instance.

Mary Portas Secret Shopper sends out important message

The latest Mary Portas series “Secret Shopper” carries on from past series looking at how the retail industry can improve itself by acting upon Mary, the Sir John Harvey-Jones of shopping, recommendations. The only difference is that Sir John tried to win over his subjects through discussion and reasoned argument whereas Mary normally relies upon two falls and a submission!

The Secret Shopper formula began with a look at a chain called “Pilot” and arrived very close to home at Braintree Freeport where disillusioned staff were secretly filmed discussing throwing a sickie and walking around the store in an effort to avoid customers. 

Having shown the footage to the Managing Director Mary was despatched back to Braintree to tidy up their act and did so reasonably easily proving that motivation and staff training always pays off. From there Mary offered a makeover of the chain in an effort to bring in extra sales and provide a reason for the chain to want Mary to rip them open in front of the Nation.

Week two saw a visit to CSL a sofa chain currently based in Lancashire and Yorkshire where Mary redesigned the store to give it an “Apple feel” and tried hard to make the sales staff understand that probing questions would be better than overpowering each customer.

These episodes contrasted the difference between the two workforces. The CSL team were relatively successful in making sales and therefore earning commission and motivated to do what they could to sell whereas the Braintree staff were lacking of love and just needed some attention and direction from the management.

In an effort to make the CSL team understand her point Mary took them out to the homes of people they had sold to and asked for feedback. In both cases we saw the customer was not entirely satisfied mainly because the sofa overpowered the space and the visual example started to make sense to many of the team telling them that they needed to think about their tactics. 

That point was a little lost on top salesperson Habib. Here was a confident individual who was earning large commissions doing it the way he had either developed or been trained to use. As the programme developed you could see the confidence flood from him as he either pondered how he could continue to earn a similar amount or just understand the enormity of the change.

Mary did him a grave disservice. She asked him how much he earned and to keep it confidential he whispered it in her ear. Unfortunately the programme makers displayed the sum on the screen and it has been printed in a National newspaper. This is the bad side of Mary’s show. You can’t do that to a participant and though Mary’s team will argue he should have kept his mouth shut if he did not want it revealed you have to think he was mistreated. 

By the end of the show Habib appeared to have become one of the group rather than its leader and this might point to others growing in a less hard sell environment rather than the champion slipping away. Amazingly takings were up 30% on the same day 12 months before. 

The third show looked at “fonehouse” the Mobile Phone chain of Clive Bayker, described as a former member of the rock band Yes. Mary, Clive was a member of Mabel Greer’s Toyshop, of which other Yes men were members, and co wrote some of the tracks on the first two albums but a member of Yes? No!     

Clive owned some of the shops and had also franchised a number. Mary visited both type of store and found some staff members undertrained, lacking in confidence and motivation plus franchisees who had performed really well and made some decent money. 

Like Habib at CSL the franchisees did not fancy any change in tactics as they were successful and knew what they were doing. In fact they presented the store make over as unnecessary and costly for them to the point where it was rejected. Clive went ahead for one of his stores and invited them to visit after which they agreed that maybe it was better and they would go ahead. 

The outcome was that customers preferred sitting down and talking over a table whilst looking at real phones and not the dummy models the high street currently offers. No real surprise there, but it also showed that by changing things around and offering some guidance to the staff that those previously lacking in ability and motivation grasped the opportunity and blossomed. 

After three shows the following is clear:

  • Staff need to understand the new concept and be able to buy into it and that those who might have most difficulty will be the high earners who might see their earnings disappearing in the short term and panic,
  • All staff need to feel wanted and part of the organisation to prosper. That was shown by the Braintree girls when put into a different environment serving in a busy breakfast restaurant,
  • Mary whilst extremely enthusiastic about her topic finds it difficult to stand back at times and let the situation play out. She is always right but can try to beat people into submission rather than win them over.

A one hour programme might need more “beating” than “winning over” to get a result and for this Mary is the person. As a top retail consultant the makeover she provides is worth a lot of money to the business owner receiving it and most agree with the findings and implement them. The costs of the changes can be considerable. Pilot, for example, will need to spend in excess of £1m to bring the new fitting room into all of their stores but if they are successful will hope to recover this in future profitability.

From a business perspective Mary Portas Secret Shopper is like the Charity Shop and Queen of Shops series before it good week night entertainment. But it also has a serious message for all business folk.

Take your staff seriously, provide them with good training and an understanding of what the business requires of them so that they can do their job. If the staff then deliver the customer should receive good service providing them with a delightful experience rather than just plain old satisfaction.  

Well done Mary for bringing business owners this message at an important economic time but please try and respect the confidence of the staff for the remainder of the series.     

Lambert Chapman LLP’s January 2011 Poll

Our previous poll has closed and the result showed that 83% of you felt that the Coalition would be a success. Let’s hope that we don’t have to modify our view as their term of office develops.

This month we ask you to tell us what your biggest financial concern is as we enter 2011 and there is room to enter your own suggestion if it is not one of the examples that we have suggested.

What is your biggest financial concern as we go into 2011?

(polls)