It’s official – we’re in a double dip recession. I have been telling people for a long time that it’s coming. I have been making forecasts correctly since 1995. How do I do it and how come I am better than the “experts”?  I use simple observations such as business start-up and buisness confidence, gleaned from speaking to my clients who are themselves accountants. Then I look around me and see what is going on in the real world. Simple but it works. always has done, always will do. Perhaps I should become a government forecaster? On 2nd thoughts I think I’ll give it a miss and stick to blogging.

Here we go again….. In my not for profit help to SME owners, and on my SME forum guidance the recurring bugbear that accountants are either failing to give good advice or are not meeting expectations has reared its ahead again. Will statutory regulation of the profession help? It certainly won’t make it worse but will it create a cohort of business-centric and proactive accountants or simply restirct those can want to act as complaince gatekeepers?

I must admit that whilst I think the profession should be on an equal footing as others in terms of protecting the word “accountant”, I doubt the intended ends will be me adequately unless the profession itself changes how it teaches the subject in the modern age. What I mean is, there needs to be far more emphasis on practical business advice and perhaps the profession needs further splitting into the nature of the qualification awarded in the same way that ISPs are trained separately.

Have you noticed that the number of upsells pushes from exisitng suppliers has increased? I can only put this down to the fact the as the economy remains in its fragile state (mustn’t use the “r” word) firms are seeking more ways to squeeze money out of their existing customer base. Marketing efforts have ramped up and companies are becoming ever more creative with their product and service offerings. Why does it take a recession (sorry government – I couldn’t avoid it) to bring out the best in our SME sector? Answer is simple. When people are making money they become content and ultimately complacent, then they drift downwards in the face of new start-ups and existing firms seekng more. If my hypothesis is correct, then it follows that good times foster new businesses and bad times favour the incumbent. I wonder if anybody is sitting on data that could corroborate this.

I thought I would pop over from Kirkby Lonsdale, where I have gone for the weekend, to Ulverston, where a tenant has gone into administration so I could check the local property vacancy scene. What better opportunity for a real life mpg test on the recently acquired Abarth 500c. I thrashed the wee motor with the roof down and returned a surprisingly high and respectable 35.8 mpg in glorious weather. On the return I drove almost as if on a driving test with the roof up and without Sport mode turned on. Weather was lashing rain and hail nearly all the way. Result 43.5 mpg. So, whilst we all know that official figures are bunkum it proves one thing. The Abarth 500c is a very aerodynamic machine. I only pulled off the sedentary return journey because the missus was left behind to study for her exams. Not has so much fun on the road since my Alfa 156 2.5 V6 – should never have sold it.

Okay, so we know that “rich” people give lots of charitable donations and bring down their marginal tax rate. I assume this is on a personal level but many of the so-called rich take the bulk of their earnings via dividends which means that their companies have paid corporation tax. Whatever the wider picture is the argument is now being presented as it being unfair for the rich to be able to choose where their tax money goes ie to charity . But anybody is free to do this by giving charity as well, not just the rich. What they mean is that since ordinary people have to spend a larger proportion of their income on living costs they don’t have the option to give 90% to charity, unlike our friendly “rich” person. Whatever the argument is I can sense another U-turn on the cards. This whole thing smacks of populist politicking but the paradox is that the people the government want to pander to are those who will lose when charity funding dries up. Hardly a good Conservative policy.

So, Mr Osborne is *shocked* at the efforts of the rich to mitigate their tax. I am shocked at his stupidity to go on the public record in such a manner. Avoiding tax is probably the second oldest profession in the world. Until  very recently nobody has really cared too much about what is or is not *fair* – it is a new agenda and to expect the rich to suddenly empty their wallets into the coffers of HMRC overnight is somewhat naive at best and disingenuous at worst. Poor politics Mr Osborne.

Also, how much of the tax is mitigated by means of charitable giving?  A lot more than you may think. For many wealthy people there is only so much they can spend and a lot of people get a kick out of charitable donations.

So perhaps we can have the *shock* restated after knowing how much is going back into the pockets of the rich and how much they are giving away, with tax benefits as a by-product.

We must remember that what they are doing is totally legal but we don’t seem to exercise the same righteous indignation on the front pages of our hallowed newspapers against tradesmen who take cash and fail to declare it. By the way it is not legal to do that or doesn’t it matter because they aren’t employing an accountant to help them do it?