Don't Pay for HMRC Tax Errors

UK workers are being told by financial experts that they have a legal right to avoid HMRC tax repayment demands.

The HMRC has made a huge number of errors in calculating the tax owed in previous years. Up to 5.7 million PAYE (pay as you earn) taxpayers are affected. About 4.3 million people have paid too much tax and will expect a rebate in their pay packets. A further 1.4 million have paid too little. It is this latter group who can expect a demand.

Essentially under a tax loophole it seems that if people have provided the correct information and the HMRC have made the wrong calculations and taken too little tax, the tax payer can ask to have any underpaid tax set aside.

UK Banks Skim £7 Billion from Savings

A report in today's Daily Telegraph claims that UK banks are skimming off an estimated total of £7 billion from consumer bank accounts.

The skimming is caused by a range of unecessary fees and hidden charges, making it very difficult for a UK investor to match stock market growth.

To read the full article, click on the post title above.

Payment Protection Market Takes a Turn

I have noticed an interesting turn in the payment protection market. This market includes search terms such as payment protection, income protection, mortgage payment protection and abbreviations such as MPPI (mortgage payment protection insurance) and PPI.

Until recently the paid search results were dominated by companies actually selling payment protection. Recently, however, I have noticed a growing market for people advertising their services over the issue of payment protection insurance. I assume that many of these advertisers are offering a reclaim service and will take a cut of any refunds secured. It seems the banks, mortgage companies, building societies and insurance companies over sold the benefits of payment protection to unsuspecting customers.

Payment protection is inherently high risk. People will only take out a policy if they feel they are at some form of enhanced risk, such as redundancy. Indeed, the demand for this type of policy has been growing as public sector workers feel they may well be victims of the new coalition government's spending cuts. If an employee believes he ot she is at risk of redundancy at the time of taking out the policy they must disclose the material facts. Or otherwise their policy is invalidated. Unfortunately, invalidation is often the case. So you can see why policy holders may well claim that they have been missold.

New Family Dental Insurance Website

The I Want Dental Cover website is now live. The I Want website offers an online family dental insurance product.

Apart from lower prices for dental insurance, a key selling point is the speed and convenience of the Quick Quote process.

Dental cover options are availabe for both private dentist and NHS dentist services.

Most UK dental insurance is sold through dentists or major insurance operations such as Simply Health or Tesco. I Want Dental Cover is backed by insurance industry specialists with experience of direct to customer insurance products.

As an online only product, I Want aims to undercut competitors on price and deliver a more customer friendly service.

The EU Cuts Spain's Public Sector Pay

The EU has stepped in and forced a 5% reduction in the pay of Spain's public sector employees. Spain has a UK-like public sector deficit of 11% of GDP. As a Eurozone member it is meant to adhere to a maximum deficit of 3% of GDP.

As well as pay, pensions and Spain's 2,500 Euro "Baby bonus" are also to be cut.

The EU has been forced to take the initiative given the fall out from the Greek financial debacle.

Will the Tory and Liberal Democratic dare impose such fiscal discipline on the UK economy?

Markets Incredibly Stable During Political Turmoil

I find it amazing how stable the Sterling exchange rate is versus the major gobal currencies of the US Dollar, Euro and Japanese Yen during this period of unprecedented political turmoil. If we take out the fluctuations due to the Greece crisis there has been very little downward movement in Sterling during a period when there is a real possibility of a Labour/Liberal pact.

Mortgage Payment Protection Insurance

I have always been fascinated by the average consumers obsession with insurance. Its a massive industry. People buy insurance to cover all types of risk. Some insurance cover is a legal requirement, e.g. motor insurance. Other insurance is a contractual requirement e.g. buildings insurance when you have a mortgage.

Mortgage payment protection is another entirely. It seems to me that people would only take this out if they felt there employment was vulnerable. Secondly, from experience MPPI comes with so many exclusions many people find that their cover does not extend to the circumstances that have brought about their loss of employment. People excluded include the self-employed, people aware of a redundancy risk and people who work abroad.

Despite this MPPI remains popular and the market is increasingly competitive.

Amex Card Problems Resolved

Things have improved with my American Express card. Back in March they offered me a refund. Despite this I still paid the late payment fee and monthly interest. The two charges were reversed in my April statement. I have also noticed a cashback rebate of £30. Things are looking up.

Problems Closing American Express Account

I have just tried to close my American Express account. Apparently nobody at American Express' UK head quarters in Brighton is trained to close accounts. I tried to explain to the poor agent on the phone that she should get a supervisor but they're not trained to close accounts either. Or, when I asked, was their boss. And there are no escalation procedures in place to deal with the problem.
To me it seems another obvious ploy to stop people closing accounts.

American Express Dispute

I've just got into a dispute with American Express. I was a day late making a payment of £403.75 against an American Express Platinum credit card. They've charged me £23.52. By my reckoning that's 5.83% for one day!!! On an annualised interest basis the charge is preposterous. Even if I ignore the £12 late payment fee, the interest fee is still £11.52, which works out at 2.85% for 1 day's delay.

This is the first time I've missed a payment with them. Needless to say I have told Amex I'm cancelling their card. Obviously American Express must factor in the sort of response I've made. Good luck to them. They won't get my custom ever again.

Obama's New Tax Costs UK Banks £11 Billion

Barack Obama has announced a new $90 billion tax on the US banking industry that will have massive repercussions in the UK. UK banks will apparently be forced to pay £11 billion as their share of the cost of repaying US tax payers for their support of the TARP programme.

Mortgages - Fix Rate or Not?

I have a had a New Year present from Bank of Ireland Mortgages. My mortgage rate has fallen from a fixed rate 5.99% to a variable rate 2.99%.
My original fixed rate mortgage was taken out with Bristol and West back in 2002. Bristol and West charged me 4.39% for a 5 year fixed rated mortgage. This original mortgage expired in 2007 and was repaced by the new fixed rate of 5.99% for two years. Bristol and West has been acquired by Bank of Ireland and rebranded. Due to the wider financial problems of Ireland - the country - Bank of Ireland have withdrawn most of their attractive fixed rate deals.

The question I now face is whether to fix my mortgage rate again - at around 4.8% for 4 or 5 years with another mortgage provider - or to carry on taking the benefit of a lower variable rate mortgage.

Getting a Dentist

Living in the fastest growing town in the UK has its problems. Government spending tends to be based on census data from 2001 when the population was much smaller.

Getting access to public services tends to present real problems as a smaller budget per person tends to be allocated than for other parts of the country. In addition, a growing population tends to have a higher proportion of children. And these tend to absorb disportionate amounts of heath and education spending. This problem is extremely evident when it comes to accessing a dentist. Children get priority and therefore ordinary adults have to go to the back of the queue.

NHS dental treatment is extremely scarce in the local area and many people are driven by necessity to private dental treatment. The interesting thing is the contrast between optician and dental services. Dental treatment gets more and more expensive and yet competition between opticians is driving down the prices of spectacles and sight testing.

Darling to Target Tax Increases at High Earners

UK Chancellor Alistair Darling appears ready to announce a whole range of tax increases targeted at higher earners.

According to the Telegraph Darling is expected to use the Pre-Budget Report to increase the rate of tax on company profits and levy additional taxes on the super rich such as bankers. These tax increases are on top of the increases announced last year that will come into effect in April 2010. Already in the pipeline are increases in national insurance plus a 50% tax rate for those earning more than £150,000 per annum.

Sadly for the socialists in charge of UK government finances, they do not seem to recognise that these sorts of taxes will just drive higher earners away. They are the sort of tactics tried by the Labour governments of the 1960s and 1970s. The public sector deficit is expected to top £175 billion in 2009/10 as tax revenues fall.

Estate Agents Regularly Lie

A study by the Office of Fair Trading (The OFT) has found that estate regularly misdescribe the homes they are selling.

The report shows that 24% of estate agents are not complying with consumer protection laws. Despite this, it seems that consumers still prefer to deal with a high street estate agent rather than rely entirely on the Internet.

The Internet is perhaps no more impartial than the high street agent. However, at least you are not subject to a hard sell. Given my local interest in the Kent housing market, I have noticed a new blog has started up that covers new homes in Kent.

The Kent housing market is a thriving on the back of improved transport links. The most significant being the high speed rail service that connects Ashford, Canterbury and Folkestone to St. Pancras International station in London.

House Price Rise of 4% in 2009

Savill's the upmarket estate agent is forecasting a year-end rise in house prices of 4% for 2009. This follows a fall of 8% in 2008.

The overall picture is very patchy, with the south generally outperforming the north. The bad news is that Savill's is forecasting a 6.6% fall in 2010. Why would anybody buy a house now if its going to be substantially cheaper in 12 months time?

One factor driving current demand is cheaper mortgages. With base rates still at 0.5% the mortgage lenders are making tidy margins. A rise in base rates is factored into most fixed rates. But there's still a wider margin than in previous years.

Living in Ashford, Kent the local housing market has been distorted by the arrival of the high speed train service to London. The market for new homes in Kent has been deflated for the past 18 months. So buyers are straining to access the housing stock. A neighbour recently put their house in the market for £75,000 more than they paid for it 2 years ago. It seems the house is now sold subject to contract. So maybe Ashford is performing better than other areas.

Nationwide Cuts Mortgage Rates

The Nationwide Building Society has cut mortgage rates by as much as 0.84% in a sign that competition is finally returning to the market for housing finance. The average cut across about 30 mortgage products of Britain's biggest building society is 0.23%. This is a welcome sign for those people who took out fixed mortgages 2 years ago when the LIBOR interest rate went above 6% following the near-collapse and Government take over of Northern Rock. At the time, bankers were unable to source funds on the wholesale markets.

The Nationwide's rate for a 4 year fixed mortgage will fall from 5.78% to 4.94%. Both HSBC and Abbey have recently tweaked their mortgage products. Various house price indices have indicated that the housing market is now past its bottom encouraging lenders to re-enter the market for 90 and 95% loan to value mortgages. The best deals remain for those borrowing less than 60% of their property's value.

Halifax Credit Cards and Inertia Theft

Why are The Halifax so useless? I started dealing with them 8 years ago when I took out a Halifax credit card and I've regretted it ever since. Now that their parent company HBOS is largely owned by the tax payer I'm ever angrier with their incompetence.

I fell out with them about a year ago over a dispute with a supplier. Halifax told me that I would have to pay the sum involved. In order to prevent that happening I told them I would close the account. Halifax said I couldn't do that because there was a £9.90 balance that wasn't due for 3 weeks. I paid the balance immediately and asked for the account to be closed. I was referred to several people before that accepted my request. However, they never closed the account. At the end of the month, £9.90 was taken from my bank account. This left a positive balance. But I'd stopped using the card and, as far as I was concerned, had closed the account.

Six months later I received a letter saying that as I hadn't used the card for some time, my credit limit would immediately be reduced from £15,000 to £500, then closed 4 weeks later. As far as I was concerned the account was already closed!!!

Any how I phoned Halifax, told them the facts and asked for my money. The £9.90 balance outstanding. According to the person on the phone this couldn't be returned unless I put my request in writing. Which I duly did. Today I've received a letter - a standard one - from an Angela Taylor who styles herself Senior Manager, Customer Services, that explains all manner of restrictions relating to future charges but no mention of the money they owe me. Given the effort I've put in to get my money I can only put this down to a deliberate policy of inertia theft. Its only a small sum. But the Halifax are driving me mad.

Interestingly, my business holds a current account with Bank of Scotland. I am so p****d of with them I'll be transferring that to another bank. Preferably one that isn't in hock to the tax payer.

Why the 50% Tax Rate Should Be Abolished

Philip Johnston of The Daily Telegraph uses an extremely amusing example of why the proposed 50p rate of income tax should be abolished. The example uses pints of beer. Where the drinkers are charged according to how much they earn. The poorest pay nothing and the rich pay the most. Everything goes well until a tax cut means the richest drinker gets the biggest rebate. The other drinkers take exception and in response attack the richest drinker. He promptly leaves the drinking circle, forcing up the price of beer for everyone else.

The moral of the story is that it doesn't take many rich people to drop out of the tax system before everyone else ends up paying more. Interestingly, in the real world, Britain has done a good job attracting tax payers from all levels. It is the richest ones who are the most mobile - take top class footballers and celebrities as recent and newsworthy examples. Just a few of these tax payers may well end up leaving in the short term. But in the long run not only will large numbers leave but fewer of the highest earners will come to Britain in the first place.

For the full story click on the post title.

Is Car Advertising Deliberately Dodgy - Seat Ibiza?

I am increasingly frustrated with car advertising. That's whether I'm intending to buy or lease. My latest frustrating experience concerns a SEAT Ibiza Sports Coupe. This was advertised at a lease price of £138 plus VAT per month.

When I contacted the company, the colour I wanted was an extra £12 per month. £12 per month equates to 8.7% of the original price. So after considerating that the colour didn't matter that much I asked the salesman for any colour that could be supplied at the £138 price being advertised. Sadly, the salesman was unable to locate any car for that price. Meanwhile, as I make this posting, the car is still being advertised at £138 per month on both the company's website and through Google Adwords. The website even has a labe of "in stock" next to price. Apparently, as I've found out, no stock exists at the price quoted.