Mobile Phone Shops Misleading Customers

When is your fixed price phone contract not fixed price? When the mobile phones companies
decided it’s time to raise the tariff
!

A report by consumer magazine, Which, has found that over 80% of mobile phone shops are
misleading their customers. Buyers are being supplied with incorrect information about the
price rises.

What does this mean for you? Quite simply, the “fixed” price on your monthly tariff can
actually rise. What’s worse is that you’re powerless to do anything. In fact, some
customers who decided to break their contract in protest at the rises ended up paying hefty
penalties.

The practise, which uses hidden contract clauses, is regularly used to bring in extra income for the mobile phone industry. Potentially, the industry can earn as much as £90 million a year from these clauses.

Over the past 12 months, at least four out of the five biggest mobile operators have raised their prices. Recently, Three raised the price by 3.6%. In October, Vodafone delivered a stinging price rise by doubling rates for internet traffic and rounding contracts up to the nearest 50p.

Orange and T-Mobile raised their prices by 4.34% and 3.7%, respectively.

Vodafone allowed customers whose bills rose by over 10% to terminate their contract free of charge. On the other hand, T-Mobile and Orange charged their customers an early termination fee.

Which, whose Fixed Means Fixed campaign aims to ensure pricing remains fixed, has called form greater transparency.

Mobile operators are being encouraged to tell customers that they face potential price rises.

The watchdog is also recommending that customers be allowed to terminate their contract freely is prices do increase.

Richard Lloyd, executive director of Which, said, “There should be no nasty surprises after signing a mobile contract. People must be confident that fixed reall does mean fixed.”

Which has also lodged a complaint with Ofcom who have confirmed that they have been investigating the pratis since January following complaints.

The Ofcom review will examine how providers handle changes to fixed price contracts and present a series of recommendations.

What Can The Banks Learn From Olympic Athletes

london olympics logo 2012

What does it take to be an Olympic champion? More importantly, could the UK’s banking sector benefit from a few lessons in fair play?

Now, and this is a personal opinion, if we were to compare the UK’s banking sector to Olympians, what would we see? A group of people determined to win at any odds even to point of gorging themselves on performance enhancing drugs.

So, what can the banks learn from Olympic athletes?

A Sense Of Fair Play

This had to be top of the list. I understand that banks are like any other business; they need to make a profit or they’ll go under. The issue that many people have is the way the bankers go about business. Billions of pounds have been injected into the UK’s creaking banks. Little, if any, of that money has seen it’s way back into the hands of the people that propped up the banks: taxpayers.

If the bankers really want to redeem themselves they need to start lending again. To some, awarding yourself a massive bonus from the money the taxpayers provided to prop up your bank may seem fair. To the investors flocking away from the traditional banking system, it’s actually a slap in the face.

The Unrelenting Pursuit Of Excellence

what is the opposite of excellence? Failure? Mediocrity? Indifference? I’ll side with the last option. Olympians cannot be indifferent. Have you ever heard a winning athlete say, ‘whatever’? Given the number and scale of banking cock ups over the last few years, it’s easier to envisage a champagne swilling trader uttering an apathetic word.

So what can the tainted financial institutions learn? It’s about more than just them and their huge piles of cash. Indifference to the pain of their customers leads to revolt. Revolt leads to you and I heading off to Dave Fishwick’s bank. Why? Because he cares. He’s not indifferent to the outcome just like Jessica Ennis relentlessly pursues excellence in order to win the Heptathlon.

Courage To Succeed

I could have easily highlighted a desire to succeed as an example of how Olympic athletes lead the way. But it’s not the right word. We all have desires but that doesn’t mean they’ll ever amount to anything. But courage is a different matter. Once an athlete has the desire to succeed it’s up to them to have the courage to push for the top. Desire seeds your ambition; courage sees it reach fruition.

But how does this apply to the banks? Surely they’re filled with people who have reached the top of the financial food chain? Yes, this is true but you have to consider the lack of courage this promotion process takes. Many bankers think that they should be highly paid because of the risks they take… with other peoples money! Instead of cutting and running at the first sign of trouble wouldn’t it be better if they were a little more courageous in the way they handle our money? Making a fat commission is less important than having the balls to protect what’s important – the customers money.

Discipline and Consistency

Olympic athletes not to be not only disciplined but they need to be consistent. They need to maintain both of these traits in training and competition. An athlete needs to push through fatigue, personal problems and personal difficulties so that create the right mindset for achieving their goals.

Certain jobs in the banking sector do require discipline. Without this personal trait, we’d see a lot more failed banks. What does let some institutions down is their level of consistency. Consistently earning massive bonuses may be important but delivering consistent returns for the customers is more important. Let’s look at it another way – it’s easy to be consistenlty crap but it takes real effort and dedication to be consistently good.

Coping With Adversity

Where does strength of character come from? It’s built up from many differing experiences but one of the key foundations is found in an athletes ability to overcome adverse conditions. To know what it’s like to lose with grace. To come back from failure with more determination to win. To finally recognise that it’s time to hang up their medals and take a job in TV!

This is the most dificult one for me to answer. I’m sure that any bank employee reading this will give me numerous examples of adversity in their job. I welcome your insights – please leave them in the comments – but the most important point to take away from this example is falling on your sword.

If you have any other thoughts or ideas then let me know in the comments section. Whilst your’re here I really do think you should follow us on Twitter ;).


Why Mervin Kings Helicopter Will Be Dropping Money On You

How would you like to see money being thrown out of a helicopter as it hovers over you house?

However unlikely it may seem, we’re edging ever closer to the realisation of Ben Bernanke’s 2003 speech in which he talked about dropping money from a helicopter. Since that day, he has had the dubious honour of being known as ‘helicopter’ Bernanke.

But could this fantasy be played out for real in the UK? Yes. In fact, it has already started to happen.

Ok, there’s little likelihood of your ‘favourite’ bank freely dishing out cash from a large brown bag. It’s even less likely that he’d hire a helicopter from which to dispense the cash. What is more likely is that the the Bank of England committee has already been operating a variation of this idea for quite some time.

Printing money has a similar effect. Instead of simply giving the money away to the people that need it the most, the Bank of England bought gilts from financial institutions. Buying these guilts raised their value (similar to the way a buying frenzy on the stock market causes share prices to rise). In turn, government borrowing became cheaper.

The intended outcome of all this quantitative easing was that the bankers would suddenly realise the world hadn’t ended. They’d realise they did still have customers to service. More importantly, they would start lending to those customers again. Sadly, the banks decided to do their own thing and, in effect, pocketed your money.



Can You See A Helicopter On The Horizon?

Ironically, the excesses of the banks might actually see money being quite literally dropped into customers waiting hands.

Way back before quantitative easing was even a twinkle in Mervin King’s eye, the banks were already treating customers with contempt. Outrageous fees for being overdrawn, mis-sold credit card PPI and the investment mess have made the banks look out of touch.

More recent cases such as the Libor fixing scandal have hurt the banks reputation. I have no doubt that, at some point in the future, the banks will be fined and customers will start to reclaim some compensation for this latest fiasco.

The first helicopter most of us will have seen is the one carrying the compensation from the PPI claims. In most cases, the awards given to customers reached a maximum of about £3,000. Yes, it is your money that was misappropiated and you’re entitled to it. But there’s more to come.

Mortgage PPI is being very closely examined and it seems likely that home owners mis-sold this type of insurance will be eligible to claim. How much is this going to cost the banks? A lot. Stephen Hester, head of RBS, has already said that the £9 billion put aside for compensation may not be enough.

Can you see the helicopter now? It’s the one loaded with cash put aside to cover the mortgage PPI payments and it’s going to land in your waiting hands.

To be fair, we deserve all the money we can get back from the banks. The financial institutions have a done a first class job of taking money from the tax payer to prop themselves up. We all understand that banks need to be protected, to a degree. But, at the rotten heart of it all, we don’t expect our money to fund bankers massive bonuses.

With that last thought in mind, it’s time to set your alarm clock and wait for Mervin King and his helicopter full of cash.


Cheap Train Tickets In 3 Easy Steps


Ever wish you could travel back in time to the great age of steam engines? Wouldn’t it be even better if we could drop the cost of a train ticket in the Victorian era?

Fortunately, there’s no need to expose yourself to the grime and destitution of the 1850’s. Here is the moneysavingzone.co.uk cheap train tickets guide.

Research Your Train Journeys

The word ‘research’ might conjure up images of dome-headed scientists experimenting on a cure for all mankinds ills. I applaud them. Whilst they’re fixing the world you’re going to be doing some research on your train fares.

The most comprehensive list of train times and fares that I’ve found comes from www.thetrainline.com. The website does charge a £1 fee for online booking but the potential savings are huge.

I did some research on a one way ticket from London Euston to Manchester. The cheapest the First Class ticket came in at £62.50. Not bad. But then I looked at the sidebar that indicated there were 3 more deals on the day I am going to travel. The cheapest option? £12.50!!

Ok, it’s not first class but it’s a huge saving.

crosscountrytrains.co.uk is another great source of deals. Some of the train tickets have been reduced by up to 75%. The cheapest ticket for the same route was £73. More expensive than thetrainline.com but still cheaper than buying on the day.

The National Express East Coast actually covers more than just the East coast. The London to Manchester journey costs as little as £12 but only if you travel at 0100!! Cheapest price for normal hours of the day is £62.50.

Buy Your Train Tickets Early

Cheap train tickets are in big demand. No sooner are they advertised and they’re gone. Is there a way to ensure you get the best deals? Yes; you need to book in advance; well in advance. In fact, if you want the very best deals you’ll need to book 12 weeks in advance.

That is quite a long time to book ahead and you may find it’s only really suitable if you’re going on holiday or taking the family to visit relatives. It’s easy to forget the planning and book a few days before you travel but, before you do, check the prices of your train journey. Do you really want to pay £100’s more because you didn’t do a little planning?

Break Your Journey Down

It goes without saying that you’re going to pay more for the convenience of a journey without train changes. But, with a little planning and a change, or two, you could knock a hefty chunk off you ticket price.

Known as ‘split-ticketing’, this method can save you up to 60% off advertised prices (and that includes the already massively discounted tickets). Instead of buying a ticket on, say, a Virgin train that takes you from A to B in a single journey, you buy tickets for different stages.

Let’s take the London to Manchester example and factor in ‘split-ticketing’.

Instead of travelling direct to Manchester, you book a ticket to Birmingham. The lowest price I found was £6. Next book a ticket from Birmingham to Manchester. The lowest price I found was £6.50. So, for a total of £12.50, you can get from London to Manchester without having to travel in the wee hours.

Is split-ticketing legal? Yes, it’s perfectly legal.

Why is split-ticketing so cheap? Because you’re taking advantage of the prices set by each individual train company rather than relying on a single operator.

What could go wrong? The biggest problem you could run into will be delays. If your connecting train departure time is close to your arrival time you may miss your connection. Plan ahead.

Travel Cards

Contrary to popular belief, travel cards aren’t the preserve of students and pensioners (although they do get the best deals and rightly so).

Rail travel cards cater for just about every group you can think of. Here’s a quick rundown of the entitlements:

16 – 25 Railcard

To be able to buy one of these cards you need to be:

Aged 16-25 or a full time student. You also need to hold either a valid passport or UK driving licence.

How much does it cost and what do you get? The 16 – 25 railcard costs £28 for a 1 year subscription or £65 for 3 years. For this rather small sum of money you get 1/3 off UK rail fares for a year.

Friends and Family Railcard

To be able to buy one of these cards you need to be:

Travelling with at least 1 child. Children must be aged between 5 and 15 years old.

How much does it cost and what do you get? The Familay and Friends railcard costs £28 for a 1 year subscription or £65 for 3 years. Adults save 1/3 off ticket prices and childrens tickets are discounted by 60%. You also get some great discounts on hotel bookings, days out and meals in selected restaurants.

Senior Railcard

To be able to buy one of these cards you need to be:

Over 60 years old. You also need a valid passport number or UK driving licence. These will be used to prove your identity.

How much does it cost and what do you get? Senior railcard prices cost the same as the others we’ve talked about so far – £28 for a 1 year subscription or £65 for 3 years. In return, you’ll get 1/3 off Standard and First Class fares. There are additional perks and you can get the latest offers here: http://www.senior-railcard.co.uk/cardholders/offers

Disabled Persons Railcard

To be able to buy one of these cards you need to be:

In receipt of disability-related benefits, have epilepsy, be deaf or a hearing aid user or be registered as visually impaired.

How much does it cost and what do you get? £20 for one year or £54 for
three years. The disabled person railcard lets you save 1/3 on most rail fares across Britain. Make you check your are eligible before yo book. Your travelling companion is also entitled to the same discount.

Network Railcard

To be able to buy one of these cards you need to be:

Travelling in the network railcard area.

How much does it cost and what do you get? For a 12 month subscription that entitles to one third of rail fares on most of the London and south east network you’ll pay £28.

Claim Back Rail Costs

It’s not the best piece of advice for rail travellers as we know you just want to get to your destination with no fuss. But, if your journey is subject to delays, you can claim back at least some of the cost of your ticket.

Your train will need to be delayed by 30 minutes for overground journeys and 15 minutes for Tube journeys for you to be eligible to claim.

Claims forms are available at your local train station.


Why We Should Pay More For Carrier Bags

How much are your carrier bags costing you and the planet? Can raising the price you pay at the supermarket make you more environmentally aware as well as helping others?

Making them more expensive might seem extreme but my proposition isn’t simply madness. Raising the cost of a plastic bag for your shopping makes sense in many ways.

Saving the planet

Waste from the UK is routinely transported to other countries for disposal. In some cases the waste disposal process consists of simply dumping the rubbish in places liks India. As a responsible shopper, the thought of my rubbish polluting someone elses countryside makes me sad.

What’s worse is the impact on wildlife. A recent report highlighted the death of a sperm whale after its stomach had been blocked by a plastic bottle. And it’s getting worse. Do you really want you children to learn about the bygone beauty of our planet
through history books?

Helping the eco industry

All around the world, there’s a growing eco industry. The problem is that, for some of you, the prices they charge are simply too high to contemplate. As we reject the accepted use of plastic carrier bags we force the supermarkets and shops to source their bags and containers from ethical sources. As the demand on these industries grows the price of production starts to fall. This means the cost to you, the consumer, starts to fall as well. Green and cheap – who can argue with that?

Supporting charity

How does supporting charity fit in with paying more for your plastic shopping bags? Rather than filling the supermarkets tills as extra profit, all the money raised will go to charity. Every month, the newly appointed ‘Minister for plastic Bags’ will randomly select 10 charities from his big book of good causes. The proceeds raised from carrier bags sales over the last month will then be split between them. Bonkers idea? Not really, the National Lottery is doing it so why can’t we do it again?

You save more money

How much does a carrier bag currently cost? In many cases, they’re free. Some of the larget chains of shops and supermarkets are making customers pay 5p for a bag. Let’s say we use an average of 6 carrier bags per week and multiply that by 50 (not 52 as we do need to go on holiday sometime :)).That’s £15 per year. I reckon we could fit in about 40 years of shopping in our lives which means you’re going to spend about £600 on shopping bags in your
lifetime (not including inflation). Now compare that to buying a £3.99 reusable shopping bag for that lasts for 5 years.

Job creation in sustainable industries

Jobs will be lost in the industries that supply the carrier bags and the materials neeeded to make them. As sustainable industries start to fill the gap left by the demise of existing carriers bags then jobs will be created in this new, sustainable industry. It’s win-win for everyone – killer carrier bags are dead and the greeen industry gets a boost – consumer and manufacturer alike.

Lower taxes for manufacturers

This might seem counter intuitive but let’s look at this a little more closely. Manufacturing industries need to keep production costs as low as possible. If the cost is too high then nobody will buy hence forcing the price up to encourage shoppers to bring their own reusable bags. For the new industry to gain a foothold the government will have to reduce the taxes on the raw materials and finished products. It’s a long shot but a well
place ‘petition in the nuts’ might spur the Chancellor into action.

Improving your memory

How often do you go out with good intentions? The boot of your car is filled with environmentally friendly bags. The problem comes when you get to town. Instead of heading straight to the supermarket you visit the newsagent. As you’re walking, taking your own bags is a hassle. From the news agent, you head directly to the supermarket – without your shopping bags. Familiar story? I think I may have just invented a new way to improve you memory!

How To Avoid Inheritance Tax With Little Effort

We’re all going to die one day but have you made arrangements for the day you throw off your mortal coil?

It’s been said many times before but there really are only two certainties in life: death and taxes. To add insult to the ultimate injury you’re even going to be taxed for having the audacity to die.

I’m not trying to make death sound like a joke but you do need to consider this fact: up to 10 million homes are liable for inheritance tax. With this in mind, I decided to put together some useful information to help ease the burden on your family.

Contents:

What is inheritance tax?

Is inheritance tax fair?

Is there a tax free threshold?

How to avoid inheritance tax

Getting married to avoid IHT

Give your money away

What is a gift?

Where can I get IHT advice ?

What is inheritance tax?

As you go through life you build up what’s called an estate. This consists of all the money you have in the bank, your home, investsments and any business you may own. Not surprisingly, it’s all liable for tax. Currently, your family will pay tax of 36% for an estate that breaches the Inheritance Tax threshold (as long you leave at least 10 % to charity. If not, the liability rises to 40%.

Sadly, many families don’t deal with matters very effectively and end up paying thousands more than they need to. I understand that it can be a sensitive subject even to the point that some memebrs of your family may be embarassed to bring up the subject.

If you want to make sure your relatives get the most from your estate, Inheritance Tax needs to be firmly dealt with.

Is inheritance tax fair?

Probably not. We spend our whole lives paying tax only to be taxed again when we die. The basic idea behind tax is to prevent the children of the rich staying rich. IHT helps to channel some of the money back into the state’s financial system. From there is can be redistributed to help other, more needy people.

If you leave your family a reasonably sized estate and minmise your liabilities you stand a good chance of leaving them a tidy sum in your will.

Is there a tax free threshold?

Yes. Regardless of who you are, you can leave a certain amount in your will without having to pay any tax on it. Called the ‘nil rate’, the current figure is £325,000. Once you go over this threshold anything you leave behind is subject to 40% tax (or 36% if you donate 10% of your estate to charity).

The ‘nil-rate’ is currently fixed until 2014. If you look at it in real terms, this means that, with inflation, you’re actually going to pay less tax.

Example: your estate is worth £400,000 but you pay nothing on the first £325,000. That leaves ou £75,000 which is liable for tax at 40%. If you don’t donate 10% to charity, you inheritors will have to pay £30,000 to the Treasury.


How to avoid inheritance tax

Fortunately, there are quite a few ways you can reduce the amount that’s paid out. In fact, one really move will save a huge amount of money. What’s the sceret?

Getting Married

If you’re married when you die and you leave your assets to your spouse or civil partner then ther’s no tax to pay. As long as they’re living in the UK. As an added bonus (to your partner), their IHT allowance rises by the amount you didn’t leave to anyone else. This means that, currently, a couple can leave up to £650,000 tax free.

Confused? Ok, here’s an example of how it works:

Bob and his wife, Louise, have assets of £900,000 when Bob dies. He leaves £300,000 to his children. The remaining £25,000 of his ‘nil-rate’ is automatically transferred to his wife. This means his wife now has a ‘nil-rate’ allowance of £350,000.

When Louise dies she has an estate worth £600,000. Because Bob’s nil-rate was carried over to her, she is now liable for 40% on £250,000. This means her family will have to pay the tax man £100,000 leaving £500,000 to be shared out amongst the family members.

The ‘nil-rate’ is a fairly new ruling. Prior to 2007, joint assets were liable for tax. This resulted in many people giving away tax free sums as gifts in order to avoid the liability.

If your partner died before the government changed the law you don’t need to do anything. The new rules have been backdated indefinitely.

What else can you do to reduce IHT?

Give your money away

This one is a little tricky. You can give money away but if you die within 7 years of handing out this gift then it’s still classed as part of your estate. This means it could still be liable for tax. Now, to be fair, the tax man would have to track down the money but that’s another story.

If you give away a large sum of money it is possible for the recipients to take out an insurance policy against IHT. If you’re intending to do this you’ll need to see expert advice.

Points to note:

The first £3,000 you give away each year will not be classed as part of your estate nor will it be taxed. This amount can be carried over into the next tax if unused.

Donating your money to your preferred political party or charity is also exempt from tax.

Giving £250 a year to friends and family. You can give anyone you want up to £250 per year, tax free. The rule applies on a per person basis which means that if you have 7 grandchlidren you can gift each of the £250 per year.

Dowery or consideration of marriage. Although it seems antiquated, the dowery is still in use and, more importantly, it’s tax free – up to a point. If you’re a parent you are allowed to hand over £5,000, £2,500 if it’s your grandchildren getting married and £1,000 for the rest of us.

Do run a farm, own woodland or run a heritage site as a business? Working farms with agricultural property could be exempt from tax. If you own woodland, the trees, but not the land, is exmpet.

What is a gift

The Oxford dictionary defines it as, ‘unconditional’. For the purposes of the law and taxation rules, you should not gain from gifting money. For example, you gift ‘some guy’ £3,000 and he repairs your roof. That’s tax avoidance on a Jimmy Carr scale.

Where can I get IHT advice?

Your first point of contact should be the IHT section of the HMRC website.
The information is fairly straightforward but, if you’re in any doubt, you may need to seek help. A financial advisor will be able to help you.

Likewise, if you have a large estate then it’s worth paying a few hundred pounds to let someone else deal with all the paper work.

One final note: make a will! Whilst your aim is to enjoy your old and the money you’ve earned you don’t don’t want family bickering over your estate.


3 Painfully Simple Ways You Lose Money Every Month

Losing money is painful but how much have you unknowingly paid out in the last year or so?

I can be quite forgetful but I’m not alone. With the day to day pressures of work and family it can be easy let money slip through your fingers. I recently did a audit of my finances and quickly realised that, over the past year, I’ve let about £1500 pounds simply ‘disappear’. Here are a few of the blackholes that sucked up my money and what I did to put my finances in order.

Expired Direct Debits

When it comes to making repeated payments, direct debits are fantastic. I have a number of them set up but I haven’t always tracked where my direct debits are going. Looking through my bank account, I notice my home insurance policy for my old mortgage was still being paid out even though the policy had been cancelled about 6 months prior. The grand total I’d unwittingly paid out was just under £500! In the current economic climate I dare anyone to say that losing that amount of money means nothing.

Solution

The first thing I did was to go through my paperwork and make sure that I no longer needed the insurance policy. Once confirmed, I simply deleted the direct debit. But it didn’t end there. I’d paid out quite a lot of money so it was time to see if I could claim it back. I called the insurance company and explained the situation. The lady on the phone was very helpful and took me through the process of getting a refund. Two weeks later the money was refunded to my bank account. It’s always worth chasing things like this up – if you don’t ask you don’t get.

Essential Repairs

Why is it so easy to let things get out of control. The phrase, “I’ll fix it tomorrow” recently cost me a lot of money. Abou 4 months ago I noticed water dripping from the ceiling in my living room. It wasn’t a huge amount and didn’t go anywhere near any of the power sockets or electrical goods. After a quick look round the attic I noticed a couple of tiles out of place. Instead of doing the sensible thing and caller the roofer straight away, I left it for about three days. Actually, I didn’t call him on third day. Instead, half of my living room ceiling came down. Cue a bill for £600 to put it right!

Solution

This one is pretty easy – get it fixed straight away. I know it’s easy to grumble about paying out a couple of hundred pounds for preventative work but it beats paying out £600 for repair work. If you’re considering claiming on your insurance – be careful – some insurers won’t pay up if they find that you already know of an existing problem and did nothing. To make matters worse, they could even revoke your insurance policy. This action on their part could leave a black mark against your name making it harder and more expensive to get cover from another provider. In the most extreme situations, you could find yourself liable for damages or injuries to other property or people.

Impulse Buying

This is one of the biggest money killers I’ve come across and I’m sure I’m not the only person guilty of it. Basically, it all boils down to being just a little bit greedy. I had a nice little 24 inch TV. Not flat screen, just a plain old box (remember those?). There was nothing wrong with it. The picture and sound quality were fine. The problem was that I’d seen a very nice flat screen television and I decided that it was a must have. I have to point out that this flat panel TV was nothing special – made by LG and only cost about £270 in the sale. So I bought it and send my trusty CRT to the charity shop. Was it worth it? Not really. I’d bought on impulse and ended up with a television with a bigger screen and some fancy connectors that I haven’t used to this day!

Solution

Calm the lizard! Many of our big purchases are based on impulse. It doesn’t matter how many times you write down the pros and cons you’ll probably still ending up buying your next big purchase because of some subconscious trigger. I’ve done it several times but, hopefully, I’m a little more savvy now. Once I’ve weighed up the cost, advantages, etc I stick to my guns. With this in mind, can anything go wrong? Yes; there’s always a crafty salesman waiting to pounce. Buy the bigger, more expensive model and get all these funky incentives… STOP! You’ve made your mind up. Don’t give in. If you don’t need it don’t buy it (or your wallet will end up a lot lighter).

Conclusion

I do like to think I’m pretty money savvy but, as you can see, it’s easy to get caught out. Whatever you do, however you do it, don’t do it!

Why it’s Morally Right to be Morally Wrong

cash in hand

Are you morally bankrupt? If a certain MP is to be believed, trying to help people in need makes you morally wrong. But maybe it’s time to stop listening to certain ‘authority’ figures.

So the Treasury wants to name and shame tax dodgers? So what? We all have a responsibility to pay tax. Roads need to be repaired. Nurses have to be paid. MP’s pensions have te be topped up.
But at what point does it become right to be morally wrong? Should we pay tax on every single transaction or should it only be the rich that are unmasked?

Conservative MP, David Gauke, seems to think that, by paying a tradesman cash in hand, you are morally wrong. For a moment, let’s put aside some of the very fishy smelling expense claims that Gauke made and answer his statement.

Who sets the moral standards?

MP’s? Yes, I know there are some passionate MP’s out there who sincerely believe that politicians can make the world a better place. The problem is that, for every one good politician there are probably 10 with their snouts in the trough.

You might think that HMRC would be a good place to start. Actually, they’re no better. There’s been lots of talk about how the rich and famous have been dodging tax by using service companies to minimise their contributions. HMRC has promised to clamp down but the problem is that even some of their own employees were up to necks in it. That’s them out of the moral running stakes.

Maybe the Church could help shine a light on the best path through the moral maze? No, that’s probably not a good idea. If they really knew anything about finance and taxation all the priests, vicars, etc would be working in banks.

What about you and me? Sounds mad, I know, but, as a group, human beings make a pretty good job of doing the right thing. Yes, there have been some past failures in the ‘do-good’ stakes (Ghengis Khan, Ponzi schemes, etc) but they’re just blips! My question to Gauke is, “Why not let the people decide what’s morally acceptable?”

Which leads nicely on to…

What is morally wrong?

It’s all down to your own interpretation. Paying a builder cash in hand for a job that costs thousands is not only wrong but it’s probably illegal. Like it or not, we should all be paying our taxes.
But what about paying a cleaner or the person that washes your car cash in hand? Is it morally wrong?

You need to weigh it up for yourself. Let’s face it, cleaners aren’t going to be doing a moonlight flit to South America with a huge pile of cash. But anyone working for more than a few pounds per hour e.g. your cash in hand builder, well, that’s a different story. They should be paid through the books.

Now, I know I said everyone should pay tax but I would to add that not…


All Wages Are Equal

But we all know they’re not. That’s why we have different rates of taxation. The problem is that some people think the rich should be taxed even more. Even the 50% upper end tax on anyone earning over £150,000 failed to make as much money as the ‘experts’ calculated. Taxing high earners even harder will result in the leaving country and taking their skills with them.

In truth, the bulk of government tax revenue comes from you and I: the average earners. This revenue is used by the government pay for keeping UK PLC on the road and this is where the problems start. The reason why so much money is needed to run the country is because of the inefficient nature of many of our public services. Some of them are just a money pits.

Take the example of unemployment benefits. If you have no job you get the bare minimum you need to live on. Most of the useful stuff such as getting help paying for transport to a job interview has gone. When times get a little desperate then you start taking on…

Jobs That Pay Cash In Hand

Window cleaning, collecting golf balls for cash, working in a car wash, brick laying, etc. So, when you think about it, sometimes it might just be morally right to be morally wrong.

Just a quick note for anyone that didn’t know: David Gauke, the MP who said it’s morally wrong to pay cash in hand has no right to be holier than thou. In 2006/7, Mr Gauke used his parliamentary expenses to pay for the stamp duty on his second home. In total, he claimed back over £10,000 (a combination of Stamp Duty and solicitors fees, land registry and property searches.

Normally, I would have a problem with anyone using their expenses for a house purchase. In this case, he was effectively using your taxes to better himself!