June 6, 2007

New blog at Blogger

Filed under: mumblings — NeilW @ 8:11 am

I’ve decided to move the blog across to Blogger for the time being. It allows me to alter the CSS on posts so that I can do syntax highlighting on code.

Make sure that you are using the correct blog address of www.3spoken.co.uk and update your feed subscription if you have one.

See you there.

April 10, 2007

There might just be a Silver Bullet

Filed under: Ruby on Rails,Software Development — NeilW @ 8:01 am

It is 20 years since the great Fred Brooks wrote Silver Bullet and since then we’ve managed to make the world of systems development a much more complex place without actually improving things very much. (Dave Thomas mentions that a web browser is little better than an 1970’s IBM 3270 terminal, except that the resolution is better when viewing porn).

Unfortunately having to deal with all these complexities takes development time away from solving the essential problems inherent in the application. Is there something that really takes these new pains away.

I’ve been using Ruby on Rails on and off for several months and it really does seem to help web application productivity. If you want to read why it successfully contradicts Fred Brooks assertion that there can be no more Silver Bullets, then there is an excellent article just published by 82ASK which states that Rails addresses the new problems inherent in Web application development and does it better than most.

February 13, 2007

Ignorance is like Cholera

Filed under: mumblings — NeilW @ 4:53 pm

Sir Muir Gray, director of the NHS National Electronic Library For Health, is speaking: “Ignorance is like cholera,” he says. “It cannot be controlled by the individual alone: it requires the organised efforts of society.” He’s right: in the 19th and 20th centuries, we made huge advances through the provision of clean, clear water; and in the 21st century, clean, clear information will produce those same advances.

From http://www.guardian.co.uk/food/Story/0,,2011095,00.html

The rise of pseudo-science, and its associated dogma is a threat to all of us – perpetuated by the 24-hour media’s obsession for ratings. Don’t be fooled by qualifications, impressive sounding words or backing by ‘prestigious’ organisations. Those are all marketing tricks. Understand the data behind it all and reach your own conclusions. It may take longer but you won’t be misled by layers of interpretation.

January 22, 2007

New ‘use of home’ rules for the self-employed

Filed under: Tax — NeilW @ 6:13 pm

HMRC have reinterpreted their rules on ‘use of home’ for the self-employed.

Now you can claim a proportion of the telephone line rental, council tax, insurance, Mortgage Interest/Rent and Repairs to the building (including decoration).

Full details of the rules here:

An excellent analysis of the rules by Nicola Ross Martin is on Accounting Web

Read and inwardly digest.

January 21, 2007

Don’t forget to pay your Corporation Tax – early.

Filed under: Tax — NeilW @ 1:46 pm

Tax doesn’t have to be taxing as they say. In fact it can be quite profitable.

If you run as a Limited Company and you pay your Corporation Tax ahead of time, then the government will pay you interest on your money. What’s more surprising is that the rate is really rather good – currently 5% and likely to go up after the latest Bank of England rate rise earlier this month. The latest rate is on HMRC’s website

So rather than squirrelling money away in a deposit account, or worse just hoping you have enough to meet the bill when it turns up, why not just pay a percentage of your turnover to HMRC every month that will cover your expected tax bill. It’s worth your while and gives you solid peace of mind.

 (Once again this facility is not available to the self-employed, but then you can simply use an individual high interest account.)

January 15, 2007

Expecting a happy event? 70% tax payer? Have £500

Filed under: Benefits,Tax — NeilW @ 10:54 pm

Here’s something else you may not know.

The government will pay you £500 (tax free) if you are expecting a baby and your family is paying a 70% marginal tax rate. This is because it is available to anybody receiving Child Tax Credit where the claw back is still in operation. As shown in my previous article this can apply up to a relatively high level of income – particularly if you are paying for childcare.

So don’t be under the misapprehension that the Social Fund is only for those at the bottom of the income scale. According to the Office of National Statistics over 3/5ths of households have income levels at a level where the 70% tax rate operates. It’s definitely worth filling in a form (even if it does weigh in at 16 pages). Don’t delay either – your window of opportunity is only 3 months either side of the baby’s arrival.

December 17, 2006

Basic rate of tax is 70% – bet you didn’t know that.

Filed under: Tax — NeilW @ 8:39 pm

Friday afternoon. It’s raining cats and dogs. You can’t go anywhere because the Christmas madness is in full swing. What can you do?

Knock up a computer program to understand the ‘what if’ scenarios in the Tax Credit system – obviously.

The results were fascinating – to me if nobody else.

What I wanted to understand was how the thing worked when you built scenarios that excluded the edge cases of single parents, disabled people and people over 50 called Fred but used to be called Jim that may have worked sometime in the past six months but then might not for which you might get an extra £50 per week if you manage to roll a six on a d20.

Let’s cut to the chase I thought. What’s the real deal for that ‘hard-working family’ you hear these policiticans trot out whenever somebody sticks a microphone near their nostrils.

So I ran through the calculations, rubbed my eyes and ran through the calculations again. But no the numbers weren’t lying – they were real.

The hard-working family earns 30p for every pound of income they generate. The government takes, or takes back 70p – 22p tax, 11p national insurance and 37p tax credit claw back.

Not quite 1 for you 19 for me, as The Beatles ‘Taxman’ puts it. Its actually 6 for you, 14 for me. So there’s a little bit of growth room if he should need it once he has the keys to Number 10 in his mitts.

Let’s consider a few examples of a hard-working family. Let’s start with the traditional one income family, stay at home mum and a couple of kids. Let’s say he works a full 37 hour week at minimum wage (£5.35 ph).

  • Net family income including tax credits is £15,000
  • The family is already suffering full income tax, full national insurance and £1,877 of the working tax credit has already been clawed back.
  • This family has a marginal rate of tax of 70%.

Now let’s say mum gets the perfect part-time job – 2 x 8 hour shifts that perfectly coincide with childcare again at Minimum Wage (£5.35). Let’s assume that you can actually get childcare for 2 kids at £30 per session.

  • Net family income including tax credits rises to £16556
  • Child care for 4 sessions is paid for with Working Tax Credit (80% WTC – the rest covered by the Child Tax Credit individual element).
  • The marginal rate is still 70%, and the clawback has risen to £3524.
  • Essentially mum has worked the entire day for less than £15 in her hand (£1.87ph) – and that’s before the cost of travel, subsistence and clothing is taken into account.

Now, as anybody who has looked for a part-time job knows, there is no such thing as a job that gives 16 hours in two neat shifts, but which co-incides perfectly with childcare. The more typical case is 20 hours per week over five days and a commute just long enough so that you have to pay for the entire day’s childcare.

  • Net family income rises to £15,275
  • Clawback rises to £3935
  • Mum works for 26p per hour, or £1.06 for the day’s toil.

And that’s why she doesn’t bother.

Perhaps you’re thinking that is to be expected at that level. But it’s not just at minimum wage that these disincentives arise.

Consider the same family, but this time with hubby earning £12.50ph (£24K per year). Again let’s start with stay at home mum and two kids.

  • Net family income including tax credits is £19,127
  • This family still has a marginal rate of tax of 70%.
  • Tax credit clawback is running at £6,967

Now let’s give mum a part-time job – 20 hours as before, but this time at £8.00ph. full childcare at the prescribed rates (£30 per session).

  • Net family income including tax credits rises to £20,423
  • The marginal rate is still 70%
  • Tax Credit clawback is now £10,045
  • Mum is working for £1.25 per hour or £5 for each day in her hand. The rest goes on childcare costs, tax and clawback. And we haven’t even considered the bus fare, or the lunchtime butty.

Now let’s throw in childcare vouchers. Let’s say the marketing men have done their job thoroughly and childcare vouchers are on offer. The couple sacrifice £55 of their respective weekly salaries (permanently!) for £55 of childcare vouchers (remember they go to school at age 5). That’s £110 tax free to offset the cost of childcare. Got to be an improvement now surely.

  • Net family income is now £19,644 (yes really!)
  • The Clawback has dropped to £7929
  • Marginal rate remains at 70%.
  • Mum is now working for 50p per hour in her hand.

At this point she would be advised to give up and develop a taste for Trisha.

Perhaps I’m being stereotypical. Let’s try another example both partners earn the same income. Let’s be very generous and give them both a salary above that of the median male (£448 per week at last count). £12.50 per hour for a 37 hour week does that for us, and therefore we already have the figure if only one of the partners is working (£19,127 per annum).

What happens when the second partner goes back to work full-time. Let’s be exceedingly generous and assume that the necessary extended childcare for the two children is available for £300 per week.

  • Net family income including tax credits rises to £25,142
  • The Working Tax Credit clawback is up to £15,866
  • The marginal rate remains at 70%
  • The second partner is working for £3.13 per hour or £23.45 per day.

These families are very hard-working, and probably wonder why after all their hard work they don’t appear to be getting anywhere.

2nd person plural imperfect tense of the verb ‘to con’.

December 10, 2006

CPU ‘Steal Time’ – the new statistic in top and vmstat

Filed under: mumblings — NeilW @ 8:35 pm

In between dying quietly from acute viral nasopharyngitis (as supplied in various varieties by my three year old daughter) and trying to earn a crust or two I’ve been playing with the Amazon Elastic Compute Cloud (EC2).

One of the things you notice when you run up a relatively recent Linux distribution is that there is a new CPU %age shown when you run ‘top’. The mysterious ‘st’.

It turns out that this stands for ‘Steal Time’ and is the amount of real cpu that the Xen Hypervisor has allocated to tasks other than running your Virtual Machine (such as somebody else’s VM…).

So if your AMI doesn’t have this statistic in ‘top’, and isn’t reporting ‘Stolen CPU ticks’ in ‘vmstat -s’, then you need to upgrade your ‘procps’ tools to a later version.

November 9, 2006

EC2 & S3 – I’m in!

Filed under: mumblings — NeilW @ 9:15 pm

I’ve just been given the keys to the candy shop. I’m so excited I can hardly speak.

About what? you may ask.

The next generation of utility computing, going by the snazzy titles of Elastic Computing Cloud and Simple Storage Service, or their more succinct acronyms: EC2 & S3.

These two facilities allow you to have data centre computer power and data centre storage on demand – all backed by one of the big names on the Internet: Amazon.

Now to do something special.

October 24, 2006

Getting It Out

Filed under: Running a Limited Company — NeilW @ 10:00 am

How do I get money out of my company?

The answer to this question is surprisingly straightforward

  • Treat your company like a bank

And yes it really is that simple. You have a deposit account with your company and any transaction you make on behalf of your company goes through that account.

But like all deposit accounts you need to make sure there is some money in it before you try and draw anything out!

Setting up the account

You have one personal deposit account with the company for each individual who has one or more of these roles:

  • officer (ie. director or company secretary)
  • member (ie shareholder or guarantor)
  • loan creditor

(Where you have an employee that has a lot of expenses, you may want to set one up for them).

I name these accounts after the individual. So mine is “Neil’s account”, but you can be more descriptive if you want, e.g: “Fred’s personal account”.

Classically these accounts are called “Director’s current accounts” or “Director’s Loan accounts” or simply “DLA”. But I find the personal descriptive names more useful.

Drawing money out

Once you have an operating personal account with the company, drawing money out becomes very simple:

  • If the account with the company is in credit, you can withdraw money for personal use whenever you like up to the amount that is in there.
  • If the account isn’t in credit then you need to fill it up first.

Putting money in

To get the account into credit you have to pay something into it, and this is where the accounting and tax planning comes in. Whereas for employees you have just net salary and for sole traders/partners you have profit, a owner-managed company has to decide from a whole host of payment types.

All the payment types have one effect in common – an amount of money is paid into the personal deposit account.

In rough order of tax efficiency you have:

(Click on the links for more details)

And on top of these regular payments you have the ad hoc contributions to the personal account

  • whenever you pay for something personally the company has contracted for (services or goods).
  • balancing loan credit when you incorporate a sole trade/partnership
  • any other time you loan money to the company for any purpose (as opposed to subscribing for shares).


By using a personal account with the company, you uncouple the drawing side from the paying in side. The two need not occur at the same time. So although you draw money once a month, for example, you may pay into it only once a quarter, once a year or twice a week depending upon how you administer the company.

The value of the personal account shows you how much of the company’s cash is yours.

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