Paul Smith Explains what is Touchstone

Just to give us a little bit of a background about Touchstone, about when it was started, about the reasoning behind starting it, and what you're currently doing right now to help people sort of avoid those pitfalls and how they can have a successful property career.

Well, the forerunner of Touchstone, we had a really imaginative name. Before we called it Touchstone, it was called Smith llp. How about that for an imaginative name? So I was going to call it the Smiths, but that's already been taken. Apparently.

Some nomarch, right.

Some singer, someone. So Touchstone has been. So it morphed into. But that's just a name change. So we've been doing this for. About doing this, as in teaching other people for about five years now. And Touchstone's ethos, Touchstone's vision is to be the UK's premier wealth creation company. So everything about wealth, I believe, is either not taught or mistaught in our schools. Now, let me just dismantle that a little bit for you. Warren Buffett says, poor people invest in things, wealthy people invest in time. And my interpretation of that is the true cost of anything is not measured in money. The true cost of anything is measured in the amount of your life you're prepared to exchange to achieve it or to do it. And a huge part of what Touchstone is about is 100% compliance. We're not about getting away with it, we're not about winging it, we're not about getting around, we're about learning how to do it properly. For me, there's a right way and a wrong way to structure most businesses. There's a tax friendly way and there's a tax unfriendly way. Many, many people that come on my courses are just amazed at how you can use the tax legislation to benefit you. So to give you an example, there's a guy called Nigel and his wife Wendy from Kent. This is a couple years ago now, they had four holiday cottages around their house and they had a lovely house in Italy, place called Lake Garda. And they'd said to their accountants, can we get any tax breaks? And the Councillor said, no, absolutely not. You can't. What you're doing, you can't get any tax break. They'd heard about capital allowances. I don't want to drill deep into this because this is a bit technical for this time of night especially, but here's the bottom line. I reinforced their knowledge that they could go and claim capital ounces, which bear in mind, Mark, their accountant, has specifically told them they couldn't and with a little bit of simple paperwork, they reclaimed £650,000 in tax. Now, how the hell can you afford to ignore that if you're a business person? You know, for me, I'm a business person first and I'm a property person second. And when you've run companies and big companies, you know how to structure things, you know that tax is important. I mean, for Christ's sake, the amount of money you can make in service departments means that you very quickly can put yourself into the high rate tax bracket, the highest rate tax bracket, which is 45%. You lose all your allowances if you don't know what you're doing, you'll be paying 53% of your income will be taxed. So you're not actually an entrepreneur at that point, you're a government employee because you're giving more of your money to the government than. Than you keeping yourself. So the whole tax structure, for some people, it's going to be boring, but I think it's essential. And I don't think you can assume that your accountant can keep you straight, because in my experience, most accountants can't. They don't know it well enough. And then the third aspect, specifically to do with service accommodation, that I'd want to pick up here, so we've got compliance, we've got tax. The third aspect is vat. So many people out there are committing VAT fraud and they're not even aware because they don't know that they're supposed to be paying VAT on their service accommodation income. So they just don't. They just take the money and don't pay any vat. We can't do that. That's not legal. So, I mean, that's like, you know, bed and breakfast owners taking pound notes and stuffing it under the mattress or something, you know, at least they know that cheating, so they like to get caught. Service accommodation people don't even know that they're liable for VAT on service accommodation. I just see horror story after horror story and people generally that come to me, they've had some other experience of service accommodation training somewhere else. And they will routinely tell me that what you do, Paul, is. And I don't want to classify everybody in the same boat because they're not. But there are some people that will teach people just like the practical operational side. You know, this is how you should look after a guest and this is how many towels you should have. And, you know, this is. I'm not saying it's not important to have towels, of course you need bloody towels. But for me, if you're behaving illegally, you're not compliant, you're not paying vat, you're paying far too much tax. Those things are a bit more important than. Should you have one towel or two tails for me? Because that bit is kind of common sense. I don't know if I'm answering your question, but our whole ethos, our whole mentality is about professional, compliant, tax efficient wealth.