Welcome to Yeovil & South Somerset LETS
Our Local Exchange Trading System has been formed by a group of local people to exchange or barter goods and services without the use of money.
How does a LETS system work?
Each member makes two lists. One of services and goods they have to offer, and the other of those that they want. A Yeovil & SS LETS Directory is compiled from all these 'offers' and 'wants' and a copy is circulated to all members, and individuals then contact each other to take up a service offered or to offer their services in response to a 'want'.
Each transaction is recorded at a central accounting office so that direct exchanges between two people, as in traditional bartering, are not necessary. For example Ann can paint Bob's windows, and Bob can help repay that 'debt' by baking bread for Jill, who in turn may baby-sit for Andy who is already in credit for doing Tony's accounts, whilst he has been building a garden shed for Fay, who has been dressmaking for Tracy ... etc.
What do I use instead of money?
Every LETSystem has its own unit of transaction. In Yeovil & SS LETS transactions are valued in Scrumpies.
A Scrumpy is a unit of local currency with a value based on one pound sterling. It exists as information only - there are no notes or coinage.
How is a transaction paid for?
Each member has a Yeovil & SS LETS system A4 Master sheet from which cheques are photocopied; these are used to record the numbers of Scrumpies to be credited/debited, for any given service. At the accounts office, the Scrumpies value of the cheque is subtracted from the account of the person receiving the service and added to the account of the person performing the service.
How does the Accounting System work?
The basic system of accounting is superficially similar to a cheque account with a bank. However, there are crucial differences with a LETSystem, which because of the apparent similarity, can be confusing to new members.
With a traditional bank account you are expected to have a credit balance before you spend, and if you do not you are penalised with high interest charges ... So the 'healthy' bank account stays in credit.
The new LETS account always starts at zero. It then immediately goes into `debit', because the administration fee is charged to it. This is often a nasty shock for the new member, keen to trade, but conditioned to the concept that an overdraft is 'bad news' or even unethical. The debit is uncomfortable and there is a desire to get into credit first before using anyone else's services. This inclination remains with many people and is difficult to shift. In fact, in practice, it has been found to be one of the major obstacles to trade flourishing within a LETSystem.
However, sparing a thought for how the system works can often shift this block:
Every account always starts at zero
Each transaction credits one account and equally debits another.
Therefore, when the balances of all accounts are added together at any one time, the results will be zero. There will be an equal value of accounts in debit to those in credit at any one time.
It is impossible for everyone to get into 'credit' before they start `spending' and if too many members are trying to do this, the whole system grinds to a halt
But if everyone tries to go into debit, half will inevitably fail (and will achieve a credit balance instead) and then the whole system is up and running, not to mention buzzing with trade!
The system is therefore actually a debit driven economy. Furthermore, because it is a closed system, your debit creates credit elsewhere in the network, which will then be spent on someone's services, who will then be credited for that, and they vill spend the credit with someone else - and so on. Even your initial debit, for the administration charge, will be credited to the members performing the administrative tasks, who will then spend that within the system. Maybe with you!
Every time someone trades it creates the opportunity for further trade. Every time you write a cheque you create Scrumpies and those Scrumpies go on circulating. Even your debit Scrumpies represent the value of the potential of the services you will perform for others in redeeming them.
The healthy LETS balance constantly moves up and down between debit and credit. The account which just moves further and further into debit creates earning for others but deprives the system of that person's services (because ultimately wealth is valued in actual services received not numbers written on paper). But the account which moves further and further into credit, which isn't spent, can actually slow the system down, because it is tying up Scrumpies, which should be circulating and creating wealth for others.
All LETS accounts are totally open and unconfidential! You will be sent a copy of your account every 6 months plus a list of all other members turnover and trading balances. You are free to contact the accounts office to check your own or any other member's current balance. Open account balances mean that it becomes obvious if anyone is amassing large credits without using other's service or who is deep in debit and wants to trade (maybe you can use their services?), or is just using services without wanting to give anything in return. (This last case rarely happens because in practices, the emphasis in LETS is on giving rather than taking).
When a member decided to leave LETS, which is unusual except for moves out of the area etc. It is expected that they will not leave their account with a debit balance. Each member should take responsibility to ensure this does not happen.
What do I put on my offers list?
It is useful here to let go of conditioned ideas of what may or may not constitute an earning skill, and think about the things you most enjoy doing and your own particular talents, even if they might not seem to be 'money earners' in the conventional world. LETS can be about opening up our horizons instead of just reproducing the narrow spectrum of possibilities most people feel constrained by. For instance, you might have a passion for trees and your knowledge shared on a woodland walk with a town dweller would be a: delight and a revelation. Likewise, your spare time may be precious, but how about sharing an afternoon of your favourite hobby of bird watching with someone who has always wanted to try it? Some people love ironing, some people loathe it. Some people's idea of heaven is spending an afternoon up to their elbows in grease, taking an engine to pieces, others become paralysed with incomprehension as soon as the bonnet opens. One person is eager for their wilderness to become a garden, but doesn't know where to start, another may live in an upstairs flat and is dying to get those green fingers dirty. One person's chore is another person's recreation, so don't list the things you think people will want, but that you don't' really want to do, or won't have time to do. LETS is about having fun as you trade, not dreading the phone ringing!
Risk it! Put down what you'd love to do, even if you can't imagine that anybody will ever want it. You may be surprised. Don't forget, people can 'afford' to do things in a LETS system that they might never be able to do in a money system.
If modesty, or lack of self recognition, is telling you that you have nothing to offer, then sit down with a friend and tell each other what you are good at. Or, you could refer to the "skim list". This is a compilation of all sorts of things that have been traded in LETSystems world-wide, and may serve to trigger ideas. Don't forget, you can always put your name down for the labouring and working part section.
When you have compiled your list, cost your services in Scrumpies where possible (or mixed currency, see below.) This is not essential, as you can put `negotiable' after the price if you are prepared to haggle or negotiate at the time of transaction (but some people feel shy of phoning if a price is not shown). If you want to add or remove an offer, let the Scrumpy accountant know, it will be noted in the next newsletter and amended in the next Directory update.To keep amendments, and thus costs, to a minimum, place 'one off offers, e.g. items for sale, in the Newsletter, not the Directory.
Income Tax, VAT and Social Security Benefits
Many LETS transactions are of the domestic/social exchange type, which are not taxable. In general if you are earning Scrumpies in the same line of business as you normally earn your living in sterling, or you begin to offer -a particular service on a regular basis, you should declare this on your tax return (ascribing a cash value to your Scrumpies and not forgetting to deduct any allowable expenses paid out in Scrumpies).
It is suggested, if you are mixing 'business' and 'domestic' transactions and find it difficult to account for them separately for tax purposes, that you have a separate LETS account for each one (there would be extra charge for this at present, as once it is set up, it should not greatly increase the book keeping).
VAT registered businesses should remember to apply VAT where applicable on LETS transactions (and charge a percentage in sterling to cover it), also the same sterling rate of P.A.Y.E. will be applicable to wages paid in Scrumpies.
Social Security payments are not a clear-cut issue at present in relation to LETS `earnings'. There has been a dialogue between various LETS groups and local authorities in parts of the country and the national co-ordinating body "LETSLINK" is collecting information on this.
Broadly speaking, most regulations would appear to apply to LETS earnings as if they were money, but the interpretative ruling will be up to the local authorities. If in doubt, ask for their advice.
TAX, VAT AND SOCIAL SECURITY BENEFITS ARE THE RESPONSIBILITY OF THE INDIVIDUAL AND NOT THE LETS ORGANISATION (whose books are open for inspection in any case).
A LETS SCHEME IS NOT A TAX EVASION SCHEME. It is designed to help people help themselves and has incredible potential to overcome the crippling effects of economic recession for many, especially in areas of high unemployment; this will be far more easily achieved in mutual amicable co-operation with local authorities. Trying to use it as a tax haven won't work and could risk bringing the whole LETS concept into disrepute.
So if 'moonlighting' is on your list of offers, please don't use LETS.
Does Yeovil LETSystem take responsibility for goods and services offered?
Sorry folks, the answer is NO.
A LETs System is set up purely as a means for members to tell each other about their needs and services. Yeovil & SS LET System operates as a sophisticated notice board, but it is not responsible for any offers, claims or promises pinned to it - or their legal implications apart from censoring any that might obviously appear immoral or illegal!!
As when using any notice board or advertisement, or when employing a trades person, it is up to you to check the credentials/qualifications of the person offering the service. The advantage of a LETSystem, being a network where people get to know each other, is that news - good or bad - gets around, and personal recommendation is more easily available.
As all accounts are open, you may contact the accounts office, and ask them for the name of anyone your potential supplier has already traded with - and ask them for a reference.
If you receive a good service ... tell people! If you receive bad service, it is your responsibility to sort it out with your supplier. If it was really bad, it might be better to inform LETS accounts than broadcast it around. They may then after discussion at the next meeting suggest that particular service be withdrawn from the directory.
Members are also reminded to check any legal requirements that may arise (e.g. child minding regulations) or insurance cover (e.g. somebody working on your roof).
Social Events/Trading Days/Community Building
When the Totnes Group sent out a questionnaire to their membership, they asked what most people liked best about LETS. Most people put the social aspect - Community Building, top of their list, (above economic benefits, although these were voted important too!!).
So we've left the best bit til last.
LETS is a great way of meeting people and having fun!
When trading, people often meet other people in their area that they haven't met before. Because of the informality and common ground of LETS, making friends over a cup of tea (or coffee) is far more likely to happen!
Another sociable aspect of LETS can arise from people joining a work party to get a job done. A good example would be a group of members planting a hedge in just over an hour, and having fun doing it, when it would take the landowner a couple of days arduous toil. This is bringing back the 'barn raising' tradition - which built communities as well as barns ...
Social events are a vital feature of LETS groups. Not everybody may want to take part in these, but for those who do, they are a great opportunity for getting to know people and offer another way to trade. Their format will be created by the membership and their particular interests, but examples might be: potluck suppers, barbecues, clothes trading parties - for exchanging all those clothes you are tired of, picnics, ceilidhs, car boot sales, music nights, fun quiz nights, craft fairs, Christmas fairs, etc. Every one from bread bakers and candlestick makers, to potters and plant growers, woodworkers, artists and stitchers can trade their wares for Jacks. The list and possibilities are endless. So, if you have any ideas or requests for social events, or would like to organise/host one please do. Hosting an event earns 10 Scrumpies. It can then be advertised in the newsletter sent out monthly. Which by the way pays 5 Scrumpies for articles submitted and printed.
For more information on Yeovil & SS LETS