Q) What does LETS stand for?
A) LETS stands for Local Exchange Trading System. There are many LET Systems countrywide. LETS groups also thrive in countries all over the world.
Q) How does LETS support the local community?
A) LETS encourages local people to trade with each other even though they have little spare cash. Free from the burden of interest rates and other charges, it allows the wealth created to remain entirely within the local area. LETS also helps local organisations and charities – allowing them to earn credits through their fund raising activities and ‘buy-in’ help from the wider community even though funds are tight.
Q) How does LETS support local businesses?
A) LETS helps small businesses and shops increase their customer base, and therefore turnover, and extends their cash flow. Many businesses already use barter networks to do this but with LETS the service is less expensive and, since the credit can only be spent locally, the customer comes back again and again. LETS also creates new demand since people who could not otherwise afford to buy at all can afford to pay partly in LETS. Other participating businesses and suppliers can also be paid in LETS. A number of new businesses, both full and part time, have started through LETS, assisted by the interest-free credit and supportive network it offers.
Q) If I start with no LETS credits, how can I trade?
A) You receive an initial trading credit and debit limit of 100LETS interest free. You are discouraged from earning or spending more than this to start with. Once you have shown that you can both spend and earn locally, your limit is increased automatically to 10% of your total turnover. So, if you have earned 2,000L and spent 2,000L, that’s a total turnover of 4,000L, your trading limit increases to 400L, and so on up to a maximum of 1,000L. Members’ balances and turnover are published in the Directory to encourage members to offer work to those who need it most.
Q) What exactly is a credit and what is it worth?
A) There are no physical tokens – the credits and debits you create only exist as figures recorded in the LETS accounts. They are simply a way of measuring the value of services given and received with others in your local community. When you receive a service you write a credit note for the agreed number of units. One LETS credit is loosely related to £1 Sterling. It does not have exactly equal value because its purchasing power is determined by what is available.
Q) Am I supposed to find a direct exchange?
A) Not at all. The reason for having an account is to enable you to earn LETS credits from any member, and spend them as you choose with anyone else in the group.
Q) Will LETS affect tax or benefits?
A) Most trading on LETS to date is well below taxable income thresholds. People are doing irregular odd jobs e.g. repair work for one member, gardening for another. This ‘social favour’ level of trading is not of interest to the tax authorities. When a member is conducting trade on LETS as part of a regular business, any net profits (after deducting business expenses and the personal allowance) will be tax deductible in sterling, the amount payable depending on each individuals circumstances. Self employed traders and shops must declare in their usual tax returns and declare any net profits in LETS from work in their normal line of trade (as with other retail credit schemes and loyalty schemes). They should give the amount a cash value. They can ensure that enough cash is available to cover both tax and VAT liabilities by making a percentage charge in sterling on LETS transactions.
The welfare benefit rules are more complex. The majority of claimants should trade below 16 hours per week to keep their benefit entitlements. Strictly speaking, claimants must be aware that they are available for work and are actively seeking work. LETS are unlikely to replace a full time job but are more designed for ‘occasional jobs between friends’ as they arise.
Many members however use LETS to explore and establish a market in a new field and go on to set up their own business as a result.
Q) How do I price my skills/goods?
A) Look in the directory to see what others are asking for their services. You could base your charges on an average hourly wage or leave them open for negotiation. Low prices may attract more trade. You are entitled to charge more for difficult jobs, or a high quality of service. Whatever rates you decide to charge, you can always revise them for the next directory.
Q) I still need cash
A) Most of us do! LETS can always be used along with cash. Ask for the cash required to cover the cost of materials, petrol etc. or for a proportion in cash (e.g. 25%). Only the LETS part is recorded on your LETS account.
Q) What if I’m not satisfied with someone’s work?
A) Minimise the chances of misunderstanding by agreeing clearly in advance the price, time-scale and expected standard of work. Ask about qualifications and/or experience. You can also speak to others who have used that persons services.
If you’re unsure about a person’s qualifications to do a job, either ask them directly or call another member for a recommendation. LETS, like any other service directory, cannot take responsibility for the quality of what is on offer, so if in doubt, check it out. If you have a problem or are unable to reach agreement, contact the LETS Admin team for help.
Q) I have no spare time. How could I participate?
A) You can earn credits and usefully support the system by offering the hire of equipment and assets which others may need, such as a washing machine, computer, photocopier, room for meetings etc. You can also sell all kinds of goods for LETS such as clothes, records, DVDs, unwanted domestic items etc. If you have money but no time you can exchange cash for LETS to help the system’s running costs. Most LETS offer all kinds of things you cannot get in the shops or through the national yellow pages. There may be jobs around your home that you cannot find time to do which someone on the scheme can help you with.
Q) Couldn’t someone run up a huge debit and then leave?
A) LETS has built-in safeguards. Most members are introduced by a friend who they would also be letting down, so there is a strong level of goodwill between members. Balances and turnover are published in the directory for all to see. If anyone has a large negative balance and no turnover they are more likely to be contacted by other members asking them to trade. If the administrators receive complaints that a member is unwilling to address their commitment, they will be removed from the system after returning their balance to zero by paying their balance in LETS or £s. If you ever wish to leave the system you simply return your balance to zero.
Q) I don’t feel I have anything to offer!
A) Many peoples’ reaction! One great advantage of LETS is that it helps people realise that they do have things to offer. Whether you are skilled or not, your time, energy or resources will be of value to someone. Just a few examples are shopping, answering the phone, cooking, cleaning, gardening, child care, car lifts, home equipment or tool hire. Start by asking yourself what you really enjoy doing. Or sit down with a friend and tell each other what you are good at. You will probably surprise yourself!
Q) It sounds great! How do I join?
A) Read the Members Rules, then complete the Application Form and send it to us. We ask that you nominate an existing member to be your ‘LETS buddy’, the person to help you. Just get in touch with any member of the Core Group if you don’t know anyone.
Complete it and send it with your lifetime membership fee of £10 (£5 for unwaged).
We’ll send your Members’ Directory and your personal LETS Chequebook so you can start trading straight away. You will also be invited to join our private Facebook Trading Group.