HMRC: Still hopeless

October 9th, 2014 No Comments By Mof Gimmers

TAX MONKEYS HMRC: Still hopelessThe folks at HM Revenue and Customs are doing a wonderful job aren’t they, trying to work out which is their arse and which is their elbow.

They have privately admitted that, even after sending out millions of notices for overpaid and underpaid income tax last year, the whole thing still doesn’t add up, so they’re doing what they do best and sending out a load of letters again.

They probably say: ‘Can you work this out for us? We’re at a loss here.’

Fact is, the tax office is now having to recalculate everything all over again and has stopped any further repayments until they sort this mess out. Assuming of course, that they manage to get to the bottom of their ineptitude.

You may recall that, last summer, they confessed that they had collected the wrong amount of tax from 5.5 million people, even though they introduced a “real time information” programme which is supposed to get rid of errors. Those affected by the cock-up were sent letters and, on average, issued a £300 refund.

Sadly for the HMRC, a leaked email showed that they’re still messing everything up with staff advised to tell those querying their tax bills “not to repay any underpayment”. Those who have already got a cheque have been told not to cash them. Obviously, if you have one, you should absolutely try and cash it. This isn’t your error.

The email said: “We are urgently investigating these cases and will look to resolve the matter in the next six to eight weeks. We currently do not know the scale of the issue but some large employers are involved, so several thousand of employees may be affected.”

The thing is, this error could run into hundreds of thousands of pounds and one mole in the ministry said: “HMRC refuses to admit the system doesn’t work, and it’s scandalous that there is no politician holding them to account as the whole programme of welfare reform could be put at risk because of this.”

Slow hand clap for all concerned.

Amazon to be probed about their taxes

October 7th, 2014 No Comments By Mof Gimmers

amazoninstant Amazon to be probed about their taxesThe European Commission (EC) are going after Amazon over their taxes.

The EC is all set to launch a probe into allegations that Luxembourg, where Amazon’s European headquarters are based, enabled the internet retail behemoth to benefit from state subsidies, illegally.

According to the Financial Times:

“Investigators believe Luxembourg gave Amazon favourable terms in a 2003 tax ruling, which caps its tax exposure to the Grand Duchy and helps limit its overall bill to less than 1 per cent of the retailer’s European income, according to people briefed on the case.”

This comes after the EC going after Apple for their ‘sweetheart tax’ deal.

In both cases, the commission could well ask Luxembourg to recover any taxes that they consider unpaid and the probes are set to be spread much wider after the EC was provided with “information on a number of cases”.

The EU’s rules on state aid prohibit governments from giving selective advantages to individual companies.

tax disc New system means those trying to renew car tax, cantYou won’t believe it – after ditching tax discs for cars and setting up a new online system, the whole thing has buggered up.

Thousands of drivers haven’t been able to renew their car tax online, after the DVLA sank under the huge amounts of traffic. The high volume of people accessing the site was predictable and as clear as the nose on your face, however, it looks like the DVLA weren’t prepared.

According to reports, some people have spent up to 13 hours online trying to sort their car tax out. At some point, they should’ve stepped away from their computer, but there you go. Some people are crackers.

The DVLA said the site had seen “an unprecedented volume of traffic”. Feel free to make your own ‘DVLA unable to deal with traffic’ puns.

Our pals at the DVLA said that an extra 30,000 people had visited the site and apologised for the farcical situation and said that, if you are desperate to get your tax sorted, you should go to the Post Office instead. Of course, with Post Offices being closed all over the country over the years, you might have to drive there as well.

The AA aren’t happy either. They reckon that this new system could see some cars being taxed twice. Nice little earner for the government that, eh? You see, someone buying a car will no longer be able to benefit from an unused period on a tax disc, which means there’ll be a lot of crossover with two drivers paying tax on a vehicle at the same time.

“Someone driving a car that costs £500 a year to tax would lose £41 if they sold it at the beginning of the month,” said Edmund King, the AA’s president. Likewise a buyer purchasing a car mid month would have to pay Vehicle Excise Duty for the entire month.”

Osborne announces pension changes

September 29th, 2014 2 Comments By Ian Wade

pensions 300x187 Osborne announces pension changesGeorge Osborne is to announce plans where he will abolish ‘death tax’.

The new move will allow thousands of pensioners to leave more money to their families, or cat homes.

Next April, coincidentally a month before the election, the Chancellor will scrap the “punitive” 55% on drawdown pension funds due when the holder dies.

More than 400,000 have drawdown pensions, which are invested in the stock market. When they retire, they draw an annual income.

Drawdown pensions are seen as more attractive than annuities, which lock people into a fixed annual income.

The move is to be announced at the Tory Party conference this week, which is jizzing all over Birmingham.

It is hoped that elderly people will take more advantage of these measures, which is pretty much designed with driving them to vote Conservative at the next election. George Osborne blahed out that these moves will help those who “worked and saved all their lives will be able to pass on their hard-earned pensions to their families tax free”.

That bloody ‘hard-earned’

Currently pension pots are taxed at 55% when someone aged 75 or over dies. But they are taxed at the marginal rate in the case of those who die aged under 75. In future, when someone older than 75 dies, their relations will have to pay income tax at only the marginal rate — normally 20%. No tax will apply to the relations of people who die aged under 75.

Him again: “Freedom for people’s pensions, a pension tax abolished, passing on your pension tax free. Not a promise for the next Conservative government, but put in place by Conservatives in Government now.”

Wetherspoons: tax-free boozing on Wednesday

September 22nd, 2014 5 Comments By Ian Wade

pint of beer 300x180 Wetherspoons: tax free boozing on WednesdaySeveral Wetherspoon pubs will be dropping their prices by 7.5% on Wednesday.

The pubs will taking part in national Tax Equality Day, which highlights how everyone would benefit from a VAT  reduction in the hospitality industry.

It’s been part of an ongoing palaver between the company and the Government over their tax battles.

More than 900 Wetherspoon pubs are taking part in the campaign.

The company paid out £275.1m in VAT last year, which took their total tax bill to £600.2m, which is 43% of the company’s sales.

On average, each Wetherspoon pub pays £12,700 a week in tax.

UK supermarkets pay no VAT on food, whereas pubs pay 20%. The company said this economic disadvantage has contributed to the closure of many thousands of pubs.

You can see their point.

While this may be a political point by the pub chain, you don’t need to be interested in this jostling. Basically, head to your local Wetherspoons this Wednesday and enjoy a cut-price piss-up. Hurrah!

Goodbye Scotland? Hello duty-free whisky?

September 18th, 2014 6 Comments By Thewlis

whisky Goodbye Scotland? Hello duty free whisky?It’s independence day! Or stay the same day! We won’t know until the early hours of tomorrow morning, and everyone is awaiting the result with baited breath. Not that we are trying to change the minds of any last minute swing voters or anything, but some folks have calculated that whisky, and indeed potentially other forms of alcoholic beverage even if they aren’t made in Scotland, might actually be cheaper if Scotland were to go its own way.

The reason is, of course, that the UK levies massive amounts of excise duty and VAT on alcohol, which can comprise up to 80% of the actual retail price. A free Scotland would be at liberty to set its own rates of duty and even (assuming it wouldn’t be part of the EU. Sore point) make up whatever rate of VAT-equivalent it chooses. Given that Scotch whisky is a Scottish product, canny lawmakers could choose to set lower duty on whisky than other types of drinks which would, presumably, stimulate consumption, and therefore the economy behind it. And if the duty/VAT on other drinks was lower than in the UK, there would be an increase in cross-border demand too.

And that’s what accountant’s Baker Tilly envisage. A frozen North, white with transit vans, as cheeky bootleggers pop over the border on booze cruises to stock up on cheap alcohol. Forget Gretna being a place where you can elope, soon it could be the place you met your perfect match in a single malt.

“The sale of whisky from an independent Scotland to retail customers in the rest of the UK would no longer be a UK domestic supply subject to UK excise duties and VAT,” said a Baker Tilly spokesperson, nodding sagely. “Currently, total UK consumption taxes – excise duty and VAT – can be as much as 80pc of the consumer price of a bottle of whisky.

The firm added: “We’ve seen similar cross-border pricing anomalies between the UK and France, resulting in the so-called ‘booze cruises’ to hypermarkets in northern France. A price differential arising from changes in excise duties and the Scottish equivalent of VAT to the consumer price of a bottle of whisky as Scotland leaves the UK and transitions to EU membership could result initially in a new cross-border market with the rest of the UK for duty-free goods.”

So what else could Scotland be a duty-free haven for? Fuel perhaps? UK fuel duty (with added VAT) is also scandalously high, so a lower duty rate would bring down the price of fuel. Although the savings would probably outweigh the costs, unless you live in Carlisle or Berwick upon Tweed.

Of course, the full benefit of a lower duties Scotland would have to be tempered by the exchange rate, given we’re not letting them keep the pound…

tax disc £167m   the cost of tax evasion now the tax disc has gone?Now that the tax disc for cars is being sent to the giant incinerator in the sky, people are getting a bit worried about the whole thing.

From October 1st, cars that have a tax disc in the window will either look a bit daft or they’ll be the kind of people who get old motors and renovate them so they look all shiny and they can pretend they’re living in the sixties.

The RAC aren’t finding this funny though. They’ve been pacing around and nervously wringing their leather driving gloves.

They think that the lack of tax discs could lead to tax evasion which will cost the economy £167 million a year. They’re worried that the number of drivers dodging tax could equal the number who try to avoid paying motor insurance. We’ll let them explain.

An RAC spokesman said: “We could be looking at about £167m of lost revenues to the Treasury, far exceeding the £10m saved by no longer having to print tax discs and post them to vehicle owners. The big question has to be whether enforcement using only cameras and automatic number plate recognition will be sufficiently effective.”

Currently just 0.6% of cars do not have road tax, which equates to something like £35 million in lost revenue from the 210,000 cars concerned. The RAC are worried that the same number of drivers won’t have insurance either.

The DVLA aren’t having it: ”There is absolutely no basis to these figures and it is nonsense to suggest that getting rid of the tax disc will lead to an increase in vehicle tax evasion,” said a spokesperson.

sugar is a drug New sugar tax to double the cost of your favourite snacks?Sugar. Yummy, delicious sugar. It tastes nice, so we like to eat it, even if we are all obese and getting fatter/diabetes/rotten teeth. But what can we do about it? Well a new report into tooth decay recommends slashing the maximum recommended intake to almost a quarter of WHO limits, with a bonus ‘sugar tax’ to help us all decide not to eat sugary treats anymore.

The World Health Organisation (WHO) recently lowered the recommended sugar limits to a maximum of 50g per day for the average adult and ideally no more than 25g, but a new report from doctors at University College London and the London School of Hygiene & Tropical Medicine warns this is still too high, calling for a limit of just 14g per day.

The study, which looked at rates of tooth decay in comparison to average sugar intake, found that people who eat little or no added sugar had little or no tooth decay. As a result, the authors want to impose a maximum sugar intake of five per cent of total calories per day and ideally less than three per cent. Three per cent of total calories would be around 14g for the average adult – less than half a can of fizzy drink or four blocks of Cadbury’s Dairy Milk chocolate. For children this would be even lower, with seven-year-olds munching no more than 11g of sugar, or three squares of Dairy Milk.

Now, before anyone starts ranting that no-one, let alone a seven year old, should be munching bars of dairy milk everyday, the sugar limit would also include all sugar added to food by manufacturers (ever checked the sugar content of a ready meal?) or at home, but also natural sugars present in things like honey and fruit juice.

Co-author Professor Philip James, Honorary Professor of Nutrition at the London School of Hygiene & Tropical Medicine and past President World Obesity Federation, said  “A sugars tax should be developed to increase the cost of sugar-rich food and drinks.”

“This would be simplest as a tax on sugar as a mass commodity, since taxing individual foods depending on their sugar content is an enormously complex administrative process. The retail price of sugary drinks and sugar rich foods needs to increase by at least 20 per cent to have a reasonable effect on consumer demand so this means a major tax on sugars as a commodity. The level will depend on expert analyses but my guess is that a 100 per cent tax might be required.”

A 100% tax seems quite hefty, but he might be right. Demand for sweet treats is fairly inelastic- meaning that if you want one, you will buy one, without worrying too much about the cost. In order for a sugar tax to have an actual effect, and not just be absorbed into rising costs of living, it needs to be a doozy of a tax, doubling the cost of the ‘bad’ items.

But would it work? If you really want a Mars bar would you pay £1.20 for a Mars bar if you really needed to work rest and play? Or 84p for a can of coke? And let’s not forget that once upon a time Freddos were 10p. Look at them now even without a sugar tax surcharge.

Let’s face it, we probably have all paid similar prices for these products at airports or motorway service stations in the past. But would we just happily keep on paying this amount or would such a high price make us cut down our consumption? Or should the Government just naff off and leave us to enjoy whatever we want to fill our faces with in peace?

Car sales are on the up!

September 8th, 2014 No Comments By Ian Wade

car scrap Car sales are on the up!People are still buying cars, even more so, for the 30th month running!

The number of cars sold so far to August 2014 in the UK is now over 1.5 million. Probably because people can’t afford to catch trains and if you’re going to get rinsed for cash, you may as well do it in the  comfort of your own company.

August also saw car sales jump up 9.4%, which is unusual for a traditionally quiet month, seeing 72,163 cars being registered, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

Also, it’s unusual as its September, when it all gets busy as cars sell when there’s the new number plate season and buyers want to look really ahead and attractive.

2014 sales are also 10.1% above the same period last year. The UK are ahead of the rest of Europe as far as growth in car sales are concerned.

It can’t last, apparently, as the SMMT reckon it will cool off in the next few months.

School premiums driving up house prices

August 27th, 2014 3 Comments By Ian Wade

beacky high 300x200 School premiums driving up house pricesHouse price news now, and if parents want their nippers to go to the best state schools in England, they’re looking down the barrel of half a million to buy a home in the right area.

According to a report from Lloyds, it reckons the average premium to live nearby to a top school is £21,000

The most extreme example was Beaconsfield High School in Buckinghamshire (pictured) where the average house price is £797,000, compared to an average price of £314,000 in the rest of the county, giving it a ‘school premium’ of £483,031, the largest one in England.

Researchers looked at the top 30 secondary state schools in England as well as the top ten performing secondary state schools in each region, based on last year’s [2013] GCSE data.

But it’s not all demented premium news, as Heckmondwike grammar, in West Yorkshire, has results that place it among the top 30 state schools in the country, but house prices nearby average just £99,000.

For that lot in London, Barnet also stands out as an area with some of the best state schools. But house prices are lower in the area than the average for the capital.

A mortgages director at Lloyds, who we’ll call for this purpose Marc Page, said: “Although property values can be significantly lower in neighbouring areas, many parents don’t appear to be put off from paying a premium to ensure their child has the best possible chance to attend their chosen school.”

Shall we look at the Top Ten of where the biggest house price ‘school premiums’ are?:

1. Beaconsfield High School, Buckinghamshire, £483,031, 154%
2. Bishop Vesey’s Grammar School, West Midlands, £131,656, 79%
3. Clitheroe Royal Grammar School, Lancashire, £86,857, 62%
4. St Olave’s and St Saviour’s Grammar School, Kent, £152,680, 59%
4. Sir William Borlase’s Grammar School, Buckinghamshire, £184,058, 59%
6. Altrincham Grammar School for Girls, Cheshire, £117,439, 56%
7. Colyton Grammar School, Devon, £53,309, 24%
8. Newport Girls’ High School, Shropshire, £23,432, 12%
8. Wolverhampton Girls’ High School, West Midlands, £20,195, 12%
10. Nonsuch High School for Girls, Sutton, £23,380, 8%

Mostly Girls Schools too, the pervs.

Interest rates: no need for rise

August 20th, 2014 No Comments By Ian Wade

British high street 300x180 Interest rates: no need for riseThanks to supermarket price wars and sales on the high street this summer, there’s been no need for the Bank of England to go ahead with early interest rate rises. Hurrah!

The consumer prices index, or CPI, went from 1.9% to 1.6% last month, which means it is still below the Bank’s 2% target for the seventh month on the trot.

The Office for National Statistics reckon this is down to a third month of falling food costs, which is due to the supermarkets scrambling for what customers they can get with all manner of discounts and offers.

The July RPI figure, which they use to set next year’s regulated rail fares, came in at 2.5%, which hopefully is good news for commuters expecting a massive price increase in the new year.

The City was a bit freaked out by the drop in CPI. Experts said the lack of evidence of inflation would stay the hand of the Monetary Policy Committee from a first rate since 2007.

There’ll no doubt be more exciting news like that when the Bank publishes the minutes of its August meeting, but otherwise that’s all quite optimistic news isn’t it?

Please say it is.

smily death 300x200 You might have to pay inheritance tax while still aliveThe Government have been messing around with inheritance tax and one of the things that is stirring up interest is that those who who try to reduce their inheritance tax bill might have to pay the levy up front.

Thanks to people using complex schemes to cut what they pay in taxes after their death, HM Revenue & Customs want those suspected of avoiding inheritance duty to pay it in full up front.

This is the latest idea the Government have had with the problem of tax avoidance.

 

Basically, the HMRC thinks that people who are suspected of using tax avoidance schemes should be liable to an ‘accelerated payment’ of inheritance tax during their lifetime. If they’re innocent, then they’ll get the money back after investigation.

A spokesman said that this only affects “very small numbers” of rich people, but you can imagine that the wealthy have the kind of accountants clever enough to get around any new rules, and added: “We are seeking views on tackling inheritance tax avoidance schemes. This is an ongoing consultation and no final decisions have yet been taken.”

“The proposals in the consultation paper will only affect a small minority of wealthy individuals who actively seek to avoid Inheritance Tax. Couples would still be able to leave up to £650,000 tax free to benefit their children or grandchildren.”

Tax credit crisis as claimants miss deadline

August 11th, 2014 No Comments By Ian Wade

tax credits 300x221 Tax credit crisis as claimants miss deadlineA load of people have failed to renew their tax credit claims, and now face a world of palaver as they could be cancelled.

According to figures from the HM Revenue and Customs (HMRC), some 455,000 claimants haven’t renewed their claims, even though the deadline for renewals was delayed after strike action buggered things up.

A three-day walkout by Public and Commercial Services union (PCS) members, meant that the deadline was pushed back by a week.

Households up and down the UK rely on tax credit payments, helping families and the like with basic needs and childcare.

Claimaints who do bother, can now also do it online thanks to a new service from HMRC.

Approximately three million people did renew in time for the deadline, and while the 455,000 who didn’t do it in time, this is lower than the 650,000 who were tardy last year.

If the deadline has completely passed you by, get in touch with the UK Tax Authority sharpish.

grandparent 225x300 Pensions likely to be cashed in after new rules, claim taxmen The taxman reckons a third of the workers who retire with private pensions next year, will cash in their pot immediately.

Due to new rules introduced in March’s Budget, retirees are allowed to dip into their pension savings at normal tax rates.

Of the 400,000 retirees, HM Revenue & Customs is expecting approximately 130,000 will do it.

After the quarter of a pension pot which can be accessed tax free, from next April, workers will pay their normal income tax rate on further cash released, instead of the 55% tax that is currently charged if someone aged over 55 stops work.

This crystal balls thinking also suggest that due to George Osborne’s shaking up of the system,  the Treasury look set to gain around £3.8 billion over the next five years.

It’s expected these changes will lead to fewer people using their pot to buy an annuity, which pays out a guaranteed yearly income once they’ve retired.

An annuity tends to last for the rest of a retiree’s life and acts as an insurance against the possibility of them outliving their savings.

Although annuities haven’t had the best press of late, what with sinking rates and people not being arsed to find the best deal for themselves.

A man named Paul Green, speaking for Saga, said that a survey it had recently carried out among 2,400 over-50s about the new pension freedom found that one in six (15%) of those still working plan to cash in their full pension pot.

“It is vital that people are properly advised about the tax implications of withdrawing more than 25 per cent of their pension pot before they do something that they may live to regret.”

Take heed of his wise words, or you may as well run into traffic now, dear reader.

All hail the superboomers!

August 4th, 2014 1 Comment By Ian Wade

breastfeeding 300x226 All hail the superboomers!The Superboomers are here and they’re buggering everything up cliche-wise

According to a new report by Huawei, the over-50s are embracing a second stab at being youthful, and changing what it means to be aged.

This section of society are weathly, healthy and driving the economy with over 1.7 million entrepreneurs over 50 and one in five of them registered as self-employed.

They’re also one of the wealthiest generations, generating 89% of disposable wealth.

A spokesperson, pushed forward to come up with thinky reasons, said: “Superboomers are embracing the fact that they will be living for longer and are having a second go at being youthful. No longer does their age define them: their hobbies, interests and passions move them.”

“Boomers represent a quarter of the population in the UK and are spearheading the longevity revolution. As the retirement age rises and life expectancy grows, news of changes in the state pension age is contributing to a wider shift in the Boomer generation’s attitudes towards their older years.”

“A second life awaits them and they have the financial security, health and vigour to make the most of it.”

The report also says the women over 50 in the UK account for 41% (£2.7 billion) of the annual spending on clothing, shoes and the like, while another report claimed that gym visits peak at the age of 66.

There are around 2.9 million people aged between 50 and state pension age out of work and the Department for Work and Pensions estimates in the next 10 years there will be 3.7 million more, with 700,000 fewer people aged 16 to 49 in the UK labour market.

Well done you, the older people!