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Competing on a level playing field.

What to do about designers who don't pay tax.

         

BeeDeeDubbleU

4:51 pm on Aug 1, 2008 (gmt 0)

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I am finding it increasingly difficult to compete with people who are obviously working on the side and not paying tax. Some of the prices they are charging are ridiculous but with no overheads or tax bill they can afford to undercut those of us who are full time at this.

Many of them have full time jobs and do this for a bit of extra cash but this is my livelihood. Is there anything we can do about this?

ronin

7:31 am on Aug 2, 2008 (gmt 0)

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That's a good question. The classic advice for small businesses and freelancers is always supposed to be: "Compete on value, not on price. Emphasise the value benefits for the higher price you are charging."

I'm from a journalistic rather than a business background but I took this advice to heart in my first year as an entrepreneur and it probably saved my business. Basically, I had a baseline price for my services which I wouldn't drop - but I was prepared to negotiate more service for the client for the same baseline price.

BeeDeeDubbleU

9:03 am on Aug 2, 2008 (gmt 0)

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I also have a minimum charge, which I strictly apply. This is set at a level where it's just not worth the hassle of going any lower.

As you say, I do try to emphasise the value of what I am offering and people often take this on board. I do get just about enough work but that's not the point. Some of these people are good web designers who also know what they are doing so to the client they can also offer good VFM. We legal designers have to compete with this.

Here in the UK we pay our taxes twice a year, 31 July and 31 January. I have just paid a large (for me) tax bill and it really pisses me off when I know that many of my competitors do not pay and have no intention of paying any tax.

ronin

10:57 am on Aug 2, 2008 (gmt 0)

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No point in feeling bitter. You are right to contribute your fair share towards social provision and they are wrong to dodge their responsibility.

It doesn't help that tax has such a bad image. Every year, Children in Need, Comic Relief, Sport Relief and others manage to drum up hundreds of millions of voluntary contributions.

I wonder if taxes were rebranded as: Schools in Need, Social-Housing-Relief and "Have you noticed how all our local community libraries and leisure centres have all become rundown and been replaced by shiny expensive fee paying gyms and Blockbusters?", then people might feel better about paying taxes rather than dodging them.

Of course, you'd still then need an administration which wanted to spend the money on helping people feel happier, healthier and more educated rather than using the money to kill people.

If you feel that strongly about it you can always take the radical step of anonymously tipping off Her Majesty's Revenue and Customs.

[edited by: tedster at 10:42 pm (utc) on Aug. 4, 2008]
[edit reason] prevent side-scroll [/edit]

Marcia

11:20 am on Aug 2, 2008 (gmt 0)

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To be honest, I don't think there's any such thing as a level playing field in this world. There are too many variables for there to be equality.

There might be a super developer/shopping cart guy in some small hick town who mainly deals with the locals, who expect (and need) super cheap pricing because they have to function within the local economy. That cheapo developer might be twice as capable as the big city guy who charges four times as much, but his pricing is focused on the bulk of his customer base.

You can also have a stay at home Mom or part time person with talent who *does* declare her income, but having a husband who's a more than ample breadwinner, she keeps her prices low because for her it's a labor of love and she doesn't need the money.

Unfortunately, sometimes the cheapo guy (I know one, BTW - highly skilled) has less of a perceived value because of his lower pricing so he gets the short end of the stick, which means that even for him it isn't a level playing field, in spite of pricing.

BeeDeeDubbleU

11:25 am on Aug 2, 2008 (gmt 0)

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If you feel that strongly about it you can always take the radical step of anonymously tipping off Her Majesty's Revenue and Customs.

Never mind anonymously, I would be happy to put my name to any such tip off if I was 100% sure that they were cheating the taxman. However this is not as easy as it sounds because we don't know which of them are not paying tax.

BeeDeeDubbleU

11:41 am on Aug 2, 2008 (gmt 0)

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I appreciate that there are many tax paying designers around who do good work on the cheap. Obviously I have no problem with them. But for every one of them there are many more anonymous people offering cheap deals through websites with no physical address whose only contact method is an online form. It is obvious that they do not want to be identified.

They know that the IRS have very little chance of catching up with them. What they should be doing is contacting the people behind these sites and checking that they are paying tax but they probably do not have the resources to support this.

Perhaps there's an opportunity for me here as a sub-contractor? :)

Marcia

1:48 pm on Aug 2, 2008 (gmt 0)

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no physical address whose only contact method is an online form. It is obvious that they do not want to be identified.

Also consider that some folks may not want wierdos, malefactors, stalkers and pervs showing up at their front door (or side door or window) in the middle of the night, or making profane crank calls that their six-year old may get if they happen to pick up the phone when it rings. My own household was plagued with calls like that when I was a child, forcing my parents to change their phone number to unlisted.

A need or desire for privacy or safety does not necessarily equate with *cheating* and IMHO narcing out the other guy isn't exactly the best and most ethical, honorable way to beat the competition and build ones own business.

BeeDeeDubbleU

3:30 pm on Aug 2, 2008 (gmt 0)

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wierdos, malefactors, stalkers and pervs ...

Apart from spam this has never happened to me and my business is 100% transparent. My phone numbers, address and even a picture of me are on the web site so everyone knows who I am.

Most legal business people are happy to provide full contact details. For many of us that is the whole purpose of advertising and having a website after all. Here in the UK there are also laws that make this a requirement for companies.

[edited by: tedster at 3:53 pm (utc) on Aug. 2, 2008]

Marcia

3:43 pm on Aug 2, 2008 (gmt 0)

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>>Most legal business people are happy to provide full contact details.

There are a HUGE number of legal business people who operate out of their homes, either independently or utilizing virtual teams on a national or global level.

No, many would certainly *not* be willing to provide full contact details, including whois, because there are far too many skeeves out there and they value their own and their family's safety above what some competitor might think about their legitimacy.

Added:

If you were a woman working out of your home, as many web designers do (or even a man for that matter, men love their kids too, don't they?) and had a couple of little daughters at home under the age of 8 or 10 or under 5, would you be willing to publicly publish your address and phone number publicly?

I think not.

Remember that there are a TON of web designers who don't have or want the burden of renting/leasing commercial office space, and the fact remains that everyone's business model is their own decision.

[edited by: Marcia at 3:59 pm (utc) on Aug. 2, 2008]

rocknbil

4:22 pm on Aug 2, 2008 (gmt 0)

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Well, if it's any help, it's not JUST taxes. Consider:

- I bust my tail to make ends meet, and watch overweight lazy people glide by on welfare.

- In the workplace, I can do my job but have to watch others get by on brown nosing.

- I watch people ascend through the ranks not because of skill or talent, but because of who they are related to or who they know.

- I watch helicopter parents giving their kids everything, basically teaching them how to work the world without just doing the job of managing their own crises.

You can put it in any context you want, in our world we pay for those who leach off the system in one way or another. The only real satisfaction, I suppose, is knowing we're Doing the Right Thing. Which is enough for me to turn away from the issue and concern myself with the problems at hand.

incrediBILL

4:56 pm on Aug 2, 2008 (gmt 0)

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They know that the IRS have very little chance of catching up with them.

If these designers are doing work for legit companies anything over a certain dollar amount paid out requires a 1099 to be filed.

U.S. tax law requires businesses to submit a Form 1099 for every contractor paid at least $600 for services during a year.

So if you know for a fact either side of the transaction meets or exceeds that amount then feel free to file a report against both parties.

watch overweight lazy people glide by on welfare

Just because some of us are overweight doesn't make us lazy or on welfare bucko.

Unless you mean Webmaster Welfare, aka AdSense and affiliate programs, then guilty as charged.

[edited by: incrediBILL at 4:57 pm (utc) on Aug. 2, 2008]

rocknbil

7:32 pm on Aug 2, 2008 (gmt 0)

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Oh good lord, zapped by the PC police again. :-)

The previous was in no way a negative comment toward large persons, of which I am apparently close to (the Wii Fit says I'm at 28% BMI with the "normal" ceiling at 25%, my Wii Mii is a bit . . . pudgy.)

I recently read an article, "The Chubby Faces of Welfare" interviewing several people on how difficult it is to keep food and basics in the house on a meager income of welfare and food stamps note the irony of "income" and "welfare" in the same sentence.. Said interviewees were all obese and it didn't make a whole lot of sense to complain how difficult it is to feed yourself when your physical stature was more horizontal than vertical. Sorry for the misunderstanding.

BeeDeeDubbleU

7:55 pm on Aug 2, 2008 (gmt 0)

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would you be willing to publicly publish your address and phone number publicly?

You mean like in Yellow Pages?

If you are in business you should have an address. This is a case of if you can't stand the heat get out of the kitchen. I would never, repeat NEVER, do business with a company that chooses to remain anonymous.

incrediBILL

8:30 pm on Aug 2, 2008 (gmt 0)

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If you are in business you should have an address.

I have an address, it's a DOT COM address, and that's all you need to know.

My business is virtual, I work from home, and I don't want people walking up out of the blue trying to ask me questions, sell me something or worse.

When you file a DMCA request you have to give all that information and putting someone's site out of business, even with stolen content, is enough to set off some loons to the point they show up at that address looking to exact revenge.

The 'net is full of loons, who needs that?

I would never, repeat NEVER, do business with a company that chooses to remain anonymous.

That's OK as I make a bunch of money from people that don't care.

They're more interesting in what I can do for them than they are knowing my address so they can drive by and watch me sit on the patio shirtless with a laptop (the business) drinking beer and scratching.

You can contact me by phone or email, both posted on the site.

Other than that, what else do you need to know?

I could post "1313 Mockingbird Lane, Munsterville, CO" or better yet, just give the address of the local Mailboxes Etc. (oops, the UPS store) and use my mailbox number as the suite number like many other sites and you'ld be no wiser than if it was completely anonymous.

[edited by: incrediBILL at 8:32 pm (utc) on Aug. 2, 2008]

Old_Honky

12:41 am on Aug 3, 2008 (gmt 0)

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In the UK it is now a legal requirement to have your name and company name (eg Fred Bloggs trading as Wizzo Web Sites), business address, registered company address, place of registration, telephone number, fax number, email address (not just a form) company registration number and vat registration number (if you are vat registered) on your website. You must also give details of your privacy policy and general site terms and conditions.

This has been the case since 1st January 2007.

There are also similar requirements for emails sent on behalf of a business.

So this side of the pond a dotcom address is not enough. As for the USA it is only a matter of time.

IMHO it is good business practice to give your customers as many ways to contact you as possible.

incrediBILL

1:10 am on Aug 3, 2008 (gmt 0)

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IMHO it is good business practice to give your customers as many ways to contact you as possible.

If you are a virtual business there is no valid reason to give anyone your physical address.

This can be dangerous to anyone, let alone work-at-home single women/mom's who are potentially even more vulnerable.

The simple workaround for possibly even the UK requirement is to get an account at a temporary/shared office space facility at some office park or business incubator and use that as your legal business address. Those places, at least in the US, offer offices and conference rooms by the hour/day/week and have telephone facilities with an answering service and voicemail for a reasonable fee.

If someone walks in without notice the secretary politely tells them "you're not in" and if you schedule a meeting with someone your temporary rental office space is conveniently available and waiting during that time.

Totally virtual, totally legal, at least in the US ;)

BeeDeeDubbleU

7:52 am on Aug 3, 2008 (gmt 0)

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U.S. tax law does not apply here.

I would never, repeat NEVER, do business with a company that chooses to remain anonymous.
That's OK as I make a bunch of money from people that don't care.

If it suits your business model then that's fine - whatever floats your boat. I will continue with my policy of refusing to do business with anonymous companies and openly advising other people to do the same.

Shady businesses (Internet or otherwise) that deliberately hide their contact details do so for a reason. I would not normally conclude that it is to keep their children safe. I am far from being alone in this conclusion.

loons - revenge - women working from home - skeeves -wierdos - malefactors - stalkers - pervs
Let's be reasonable here, this cannot be used as an excuse for anonimity. Many non-Internet, home-based businesses happily provide their full contact details. In fact they go to great lengths to publicise them. The majority of these are run by women.

Why should Internet businesses be any different?

I could show you dozens of home based business addresses from my local newspaper and thousands from the phone book and yellow pages. I can see their addresses but I don't recall reading about many of them having to put up the barricades against the malefactors.

Many millions of self-employed people who do have premises are also happy to publish their full contact details. Why is this any different from your home address? With respect, using this as an excuse for remaining anonymous is unreasonable. Why should "virtual businesses" be allowed to be different from the others? This is only playing with words - you are a business the same as any other.

As Old Honky says, it is only a matter of time until your US authorities realise that they cannot allow businesses to hide in this way.

incrediBILL

8:04 am on Aug 3, 2008 (gmt 0)

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I could show you dozens of home based business addresses from my local newspaper and thousands from the phone book and yellow pages.

And I can show you just as many or more that have nothing but a phone # and a business license shown because they simply don't operate directly out of their homes.

As a matter of fact I once spent a few weeks tracking down a legal mailing address when suing a scam operation that had a bogus address in the yellow pages so I'm not sure what value you get from that false sense of security.

I would not normally conclude that it is to keep their children safe.

Maybe when you have a deranged loon that's just been shut down via a DMCA complaint show up on your property that has to be hauled away by the police you might change your mind.

Sad to say but your sense of security isn't the real world for everyone in every neighborhood. Those in safe little ivory towers naively think everyone else is in an safe little ivory tower and it simply isn't reality.

FWIW, I've dealt with businesses that were completely out in the open that were a complete scam so knowing an address and seeing an office space has nothing to do with anything.

You simply need to check the web for references and judge the amount of negative complaints before doing business with either an online or offline company, whether you know their address or not.

[edited by: incrediBILL at 8:05 am (utc) on Aug. 3, 2008]

BeeDeeDubbleU

10:25 am on Aug 3, 2008 (gmt 0)

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Shady businesses and those who have something to hide do not display their contact details. That is a fact.

Those who do not pay tax would not normally display their contact details. That is a fact.

A few legal businesses also do not display their contact details. If they are happy to be perceived as being shady then so be it. Many of the rest of us are happy to be fully transparent.

Maybe when you have a deranged loon that's just been shut down via a DMCA complaint show up on your property that has to be hauled away by the police you might change your mind.

Why keep mentioning this? It has absloutely no relevance and if it did happen to you it was clearly an isolated incident, one which could occur in any line of business, not just the Internet.

In business you must accept your responsibilities, which means that there is a chance of having to deal with people that you upset (whether you are right or wrong). How many small builders, electricians, joiners, plumbers or home improvement companies have had to deal with irate clients who were unhappy with their work?

But don't take my word for it. As has already been pointed out, the UK government has recognised the need for transparency in business. I am sure they would not be insisting that company details were provided if they considered that they were putting people at risk of facing Freddy Kruger by doing so.

The following is the minimum information that must be on any company's website (from OUT-LAW's guide, The UK's Ecommerce Regulations).

The name, geographic address and email address of the service provider. The name of the organisation with which the customer is contracting must be given. This might differ from the trading name. Any such difference should be explained – e.g. "XYZ.com is the trading name of XYZ Enterprises Limited."

It is not sufficient to include a 'contact us' form without also providing an email address and geographic address somewhere easily accessible on the site. A PO Box is unlikely to suffice as a geographic address; but a registered office address would. If the business is a company, the registered office address must be included.

If a company, the company's registration number should be given and, under the Companies Act, the place of registation should be stated (e.g. "XYZ Enterprises Limited is a company registered in England and Wales with company number 1234567")

If the business is a member of a trade or professional association, membership details, including any registration number, should be provided.

If the business has a VAT number, it should be stated – even if the website is not being used for e-commerce transactions.

Prices on the website must be clear and unambiguous. Also, state whether prices are inclusive of tax and delivery costs.

Finally, do not forget the Distance Selling Regulations which contain other information requirements for online businesses that sell to consumers (B2C, as opposed to B2B, sales).

jecasc

12:31 pm on Aug 3, 2008 (gmt 0)

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Maybe when you have a deranged loon that's just been shut down via a DMCA complaint show up on your property that has to be hauled away by the police you might change your mind.

You can't file a complaint anonymously, or sue somebody anonymously. As soon as you take legal action against somebody he gets to know your name and address.

In my opinion it is grossly negligent to do business with someone who wants to stay anonymously. If you close a contract you need to know who the contracting party is, you need to know who is liable if something goes wrong. And even the best can make a mistake one in a while and screw up for example a whole website. Reliable business people know that and have an insurance for those cases so their clients are covered if they should screw up. I wonder how anybody could have confidence in a business that chooses to hide its identity.

Demaestro

2:02 pm on Aug 3, 2008 (gmt 0)

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I really don't think there is much you can do.

It is like a landscaper dealing with those kids who every year go around with a lawnmower or a rake and offer to do people's lawn for $5

There are always going to be cheaper less worthy options. That is the nature of a marketplace.

Something I try to remind potential clients that are looking at cheaper alternatives...

"The bitterness of an inferior product remains long after the sweetness of a good deal is gone"

Being a professional is your greatest asset over these "spare time" guys. Show people why hiring a professional is the only way to go.

[edited by: Demaestro at 2:03 pm (utc) on Aug. 3, 2008]

incrediBILL

5:17 pm on Aug 3, 2008 (gmt 0)

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You can't file a complaint anonymously, or sue somebody anonymously. As soon as you take legal action against somebody he gets to know your name and address.

That's why I said it was related to a DMCA request which is where the exposure lies.

So why expose yourself to those wackos when you don't have to?

No reason whatsoever.

Do you do business with the WordPress site?

I found a phone # but no other contact information whatsoever unless I'm just overlooking it and they have paid options where they take money for services.

Same with Drupal, nothing I've ever found on that site.

Maybe I'm just missing there contact data, but if you do business with either then you're being hypocritical.

BeeDeeDubbleU

7:41 pm on Aug 3, 2008 (gmt 0)

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Maybe I'm just missing there contact data, but if you do business with either then you're being hypocritical.

IncrediBILL have you had a few beers? ;)

As it happens I don't use either Drupal or Wordpress but I would have no hesitation in doing so. Both of these are open source - an entirely different ball game from when you pay an anonymous person for a service.

But then you already knew that didn't you? (If not you should have.)

incrediBILL

9:37 pm on Aug 3, 2008 (gmt 0)

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As it happens I don't use either Drupal or Wordpress but I would have no hesitation in doing so.

So you'll take code from anonymous strangers, people you have no clue you can trust?

OK, if you were using that code for a client and something went horribly wrong, where's the difference in the outcome of whether it's their code or service or someone that maintains anonymity on their site?

FWIW, back when I was still doing client work I didn't post all my details on the site, just a contact us form and phone #, but all that data was disclosed in all my quotes. contracts and outbound emails. I just didn't see any reason to provide those details to people that weren't my clients since I was operating out of the house.

The only thing I sell online now is advertising for a pretty popular site and I don't provide a physical address either since it's a virtual company that's been online forever.

I do provide a phone number and email address which is more than a few of my competitors provide that also have almost the exact identical service.

Probably a bit different than buying SEO or web design services from an anonymous source since you can already see my site and all the other advertisers on the site.

Demaestro

3:31 pm on Aug 6, 2008 (gmt 0)

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Hey hey hey.... lets not drag open source into this.

"thems fightin' words"

Having a physical address is always nice and gives one the warm and fuzzies, not really required though, but if I can't call someone then I usually stay away.

That being said, I know where Microsoft is, I have their number, I spend money with them and I can't get much satisfaction from them at all. On the other hand with a lot of the open source stuff I use I can often get the actual person who checked in the code I am having issue with to talk to me in a forum, no address or phone number required.

I think it was Chris Farley who said it best in Tommy Boy.

"Why would someone put a guarantee on a box? Hmm lets think about that, Because they know all they sold ya was a guaranteed piece of crap. That's all it is, isn't it? Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time. But for now, for your customer's sake, for your daughter's sake, ya might wanna think about buying a quality product from me."

Your best bet is to be professional and good at what you do. Spending time on what the other guy is doing is a waste of your energy. Don't be a busy body watching what everyone else is doing... make quality products and give good service and you will be fine.

[edited by: Demaestro at 3:31 pm (utc) on Aug. 6, 2008]

BeeDeeDubbleU

6:38 pm on Aug 6, 2008 (gmt 0)

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OK, if you were using that code for a client and something went horribly wrong, where's the difference in the outcome of whether it's their code or service or someone that maintains anonymity on their site?

The difference is that my clients know who I am and where I am. My clients have my telephone numbers, my fax number and even a picture of my ugly mug! My clients know that I will put things right or give them their money back. That is the difference and that is the guarantee I provide.

In many cases the shady characters who have not provided any contact details disappear at any mention of a problem. I know this because I have clients who have experienced it first time around. A few years ago one of my clients here in Scotland paid a company in the USA almost £3K which they took then disppeared without doing anything for him.

Your best bet is to be professional and good at what you do. Spending time on what the other guy is doing is a waste of your energy. Don't be a busy body watching what everyone else is doing... make quality products and give good service and you will be fine.

Thanks for the advice Demaestro but I will be 60 years of age this year so I think you could safely say that I have been around the block a few times. :)

I am not a busybody and I don't care what anyone else is doing as long as they are doing it legally. This is about fair competition. Call me what you like but I do not like to be undercut by people who are stealing an unfair advantage.

engine

7:23 pm on Aug 6, 2008 (gmt 0)

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OK, I think this topic has run its course. Thanks for all the contributions.