Can you count to 13?
One.
Two.
Three.
Four.
Five.
Six.
Seven.
Eight.
Nine.
Ten.
Eleven.
Eleven.
Er?
Well, the Inland Revenue thinks that what comes after eleven is eleven. I am just doing the workings for my self assessment tax form and there is box W11 at the bottom of page STRG 21. Then there is box W11 at the top of the next page, with the rubric: "complete boxes W12 to W14".
I can't . There is no box W12. Just another box W11.
Fortunately, on a closer reading of the form, it appears I don't need to bother with this since if higher rate tax is payable, I need to fill in boxes W15 to W22 . That isn't terribly obvious either as the rubrics are very poorly drafted.
But what amazes me is that this form could go out with such an egregious error. The tax authorities have very extensive powers over citizens, sorry, SUBJECTS (and that is another sore point, but it certainly feels like it this year), of the United Kingdom. You would expect them to be rigorous in ensuring that their computations and the documentation issued to make these computations is correct.
I have completely lost faith in this government department. I do not believe they are capable of levying fair taxes. I have no faith in their computations.
I have an accountancy training. I keep good records for my business. I used to be pretty hot on business taxation and still cover it for a number of magazines and journals. And the process of filling in my fairly simple tax form (employment, self employment, dividends and bank interest) this year has reduced me to tears and taken nearly two weeks.
And this is 'simplification;'.
Ha ha bloody ha.
Monday 27 October 2008
Thursday 23 October 2008
More Revenue madness
Now someone from the Inland Revenue has finally got back to me, and explained the difference between a dividend and a capital gain.
Yes, I am aware of the difference. I trained as an accountant. I have filled my own tax form in for ten years or more. I have worked as an investment analyst. I sort of figured out that there's a difference between a dividend and a capital gain.
"So which one do you need to know?"
Both!
Said person seems unable to grasp that if you sell part of the way through a year, you may have dividends paid on an investment and make a capital gain on it....
Somewhere deep in the innards of the 17 pages of notes to the CGT form there is apparently a mention of OEICs... but nothing on the notes to the short tax return.
Oh yes, the notes to the short tax return by the way aren't visible on the Inland Revenue site. It links to a page telling me what a PDF file is.
Frankly, Guy Fawkes was right. I feel like taking my remaining money out of the stock market and investing in as much gelignite as I can buy. Anyone want to join me on November 5th?
Yes, I am aware of the difference. I trained as an accountant. I have filled my own tax form in for ten years or more. I have worked as an investment analyst. I sort of figured out that there's a difference between a dividend and a capital gain.
"So which one do you need to know?"
Both!
Said person seems unable to grasp that if you sell part of the way through a year, you may have dividends paid on an investment and make a capital gain on it....
Somewhere deep in the innards of the 17 pages of notes to the CGT form there is apparently a mention of OEICs... but nothing on the notes to the short tax return.
Oh yes, the notes to the short tax return by the way aren't visible on the Inland Revenue site. It links to a page telling me what a PDF file is.
Frankly, Guy Fawkes was right. I feel like taking my remaining money out of the stock market and investing in as much gelignite as I can buy. Anyone want to join me on November 5th?
Tuesday 21 October 2008
Interest rates and the price of risk
An interest rate is the price of risk. That's an economic truism.
Obviously, with stock market volatility at high levels, and the economy tanking, there are significant risks involved in lending or investing.
Therefore, the interest rate needs to be high.
Oh no it doesn't, say voices including the CBI, estate agents, politicians and rent-an-economists in the national papers. Reducing interest rates is the only way to get us out of recession.
Reduce interest rates, and force the banks to lend, so people can once again borrow stupid multiples of income, pay very little for borrowing it, and send house prices rocketing again so everyone will be happy.
Ummm... little bit of a problem. First of all, now consumer confidence is low and unemployment is rising, it's not going to work. People are cutting back. And the bet they're making is that if they hold back now, the house they're looking at today will cost them 30 percent less next year. Reflating the housing market in this environment? Impossible.
Secondly, though, the banks aren't buying it. The banks take their own view on risk - and have made their own views very clear. They are not reducing mortgage rates. Their view is that the Bank of England can do what it likes to its own interest rate - but they will take their own view on risk, thank you very much, and that view is that it's a bigger risk and they need a bigger price to take it on.
Look at the way equities like BT, Cable & Wireless or Enterprise Inns are trading on yields as high as 13%. Guess what - that reflects the perceived risk. The dividend might get cut. Enterprise might not be able to reschedule its loans. BT might not be able to fund its pension scheme without slashing the dividend. The yield (equivalent to the interest rate) is the price of risk - and it's the perception of risk which determines the yield.
So whatever happens, I suspect the credit crunch is going to continue. Because frankly, why would you lend money right now? Especially if someone's going to use it to buy an asset whose price is going down.
Obviously, with stock market volatility at high levels, and the economy tanking, there are significant risks involved in lending or investing.
Therefore, the interest rate needs to be high.
Oh no it doesn't, say voices including the CBI, estate agents, politicians and rent-an-economists in the national papers. Reducing interest rates is the only way to get us out of recession.
Reduce interest rates, and force the banks to lend, so people can once again borrow stupid multiples of income, pay very little for borrowing it, and send house prices rocketing again so everyone will be happy.
Ummm... little bit of a problem. First of all, now consumer confidence is low and unemployment is rising, it's not going to work. People are cutting back. And the bet they're making is that if they hold back now, the house they're looking at today will cost them 30 percent less next year. Reflating the housing market in this environment? Impossible.
Secondly, though, the banks aren't buying it. The banks take their own view on risk - and have made their own views very clear. They are not reducing mortgage rates. Their view is that the Bank of England can do what it likes to its own interest rate - but they will take their own view on risk, thank you very much, and that view is that it's a bigger risk and they need a bigger price to take it on.
Look at the way equities like BT, Cable & Wireless or Enterprise Inns are trading on yields as high as 13%. Guess what - that reflects the perceived risk. The dividend might get cut. Enterprise might not be able to reschedule its loans. BT might not be able to fund its pension scheme without slashing the dividend. The yield (equivalent to the interest rate) is the price of risk - and it's the perception of risk which determines the yield.
So whatever happens, I suspect the credit crunch is going to continue. Because frankly, why would you lend money right now? Especially if someone's going to use it to buy an asset whose price is going down.
Specialists? Don't make me laugh
The Short tax form has been lauded as vastly simplifying taxpayers' lives.
Really? I wonder why there is no reference anywhere to what to do with unit trust dividends.
There is a box for "company dividends".
On the old tax form, of course, corporate and unit trust dividends were separate. You'd expect the notes would tell you whether unit trust dividends should be entered into this box. Nope. No reference to one of the commonest forms of investment in the UK.
Ring Inland Revenue. After giving extensive identity information I'm told the person picking up the phone can't actually answer any questions. He will put me through to someone.
I am put through to someone, after listening to Pachelbel's Canon (a piece of music I now loathe. I used to like it.)
This person says she can't answer any questions but I can talk to a 'technical specialist'.
I hold on for five minutes.
The specialists are all busy. Someone will phone me back WITHIN THREE DAYS. What?!!!!!
"You shouldn't leave it to the last minute then."
Er, this is not the last minute exactly. This is two weeks before the deadline for paper filings. And it is a simple question.
"Yes, but we aren't qualified to answer anything. You can ring back if you like."
Will I actually get hold of anyone who will answer the question?
Maybe. Maybe not.
What exactly is going on? No one I have spoken to at HMRC can actually answer any questions at all about the tax form and how to fill it in.
They just pick the phone up, take a load of information off you, and then tell you they can't help.
It's a con. My taxes go to pay for this 'help' line.
Some help.
This seems to be common across the whole civil service now. But I honestly despair of the tax office. I'm not asking for anything difficult here; I am simply asking WHICH FUCKING BOX DO UNIT TRUST DIVIDENDS GO IN?
You'd think I was trying to find out something very, very abstruse relating to trusts or inter-company transactions, or the foreign exchange rate I should use for imports from Botswana.
Call centre hell. And at the end of it, if they can't be arsed to answer the phone, guess who pays the fine for late filing of a tax return?
You guessed it. Me.
I do wish the bunch of overpaid and well stuffed idiots who inhabit Westminster - a place about which I am increasing coming round to Guy Fawkes's somewhat pyrotechnical views - would actually get their heads round the idea that we would like some service out of the civil service.
Really? I wonder why there is no reference anywhere to what to do with unit trust dividends.
There is a box for "company dividends".
On the old tax form, of course, corporate and unit trust dividends were separate. You'd expect the notes would tell you whether unit trust dividends should be entered into this box. Nope. No reference to one of the commonest forms of investment in the UK.
Ring Inland Revenue. After giving extensive identity information I'm told the person picking up the phone can't actually answer any questions. He will put me through to someone.
I am put through to someone, after listening to Pachelbel's Canon (a piece of music I now loathe. I used to like it.)
This person says she can't answer any questions but I can talk to a 'technical specialist'.
I hold on for five minutes.
The specialists are all busy. Someone will phone me back WITHIN THREE DAYS. What?!!!!!
"You shouldn't leave it to the last minute then."
Er, this is not the last minute exactly. This is two weeks before the deadline for paper filings. And it is a simple question.
"Yes, but we aren't qualified to answer anything. You can ring back if you like."
Will I actually get hold of anyone who will answer the question?
Maybe. Maybe not.
What exactly is going on? No one I have spoken to at HMRC can actually answer any questions at all about the tax form and how to fill it in.
They just pick the phone up, take a load of information off you, and then tell you they can't help.
It's a con. My taxes go to pay for this 'help' line.
Some help.
This seems to be common across the whole civil service now. But I honestly despair of the tax office. I'm not asking for anything difficult here; I am simply asking WHICH FUCKING BOX DO UNIT TRUST DIVIDENDS GO IN?
You'd think I was trying to find out something very, very abstruse relating to trusts or inter-company transactions, or the foreign exchange rate I should use for imports from Botswana.
Call centre hell. And at the end of it, if they can't be arsed to answer the phone, guess who pays the fine for late filing of a tax return?
You guessed it. Me.
I do wish the bunch of overpaid and well stuffed idiots who inhabit Westminster - a place about which I am increasing coming round to Guy Fawkes's somewhat pyrotechnical views - would actually get their heads round the idea that we would like some service out of the civil service.
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