Money News

Pension age rises
Millions of men and women who thought they knew when they could claim their state retirement pension will find that date has been put off by up to two years. The delay affects every woman born on 6 April 1953 or later and every man born on 6 December 1953 or later. Women get the worst of it. They will have to wait between one month and two years longer – the average delay is about 65 weeks. That could cost them more than £6000 in lost pension. The very worst time to have been born is March to May 1954. Those women will face a delay of around two years before they get their pension which could cost them £10,000 or more.  Men will have to wait on average about 25 weeks longer which could cost them an average of £3000 in lost pension.

Men will also suffer from the delay to women’s pension age. The qualifying date to get winter fuel payment, free bus travel and to claim pension credit are all linked to the female state pension age. So the entitlement of men and women to those benefits will also be delayed for anyone born on 6 April 1953 or later. The Department of Health has also said it will link free prescriptions in England to the female state pension age when it can find an appropriate time to do it.

The full table of the new pension age dates and how much longer men and women will have to wait is on our website [link?] Check out if you’re a loser – there are no winners.

Fake VAT
With VAT now at 20% the temptation for non-registered traders to add 20% to your bill is bigger than ever. Doing that is illegal but very unlikely to be challenged by most of us. First, check that the bill is on printed paper with a VAT number clearly shown. If it is not then ask what the VAT number is. If you are given a VAT number it should have nine digits normally grouped as three, four, and two  like this 123 4567 89. Even a number that looks right may not be genuine. And even a genuine number may belong to someone else.

You can check the validity of a VAT number from anywhere in the EU on this website http://ec.europa.eu/taxation_customs/vies/vieshome.do. All you have to do is enter the country and the number without spaces in the top two boxes. Ignore the third and fourth rows and click on Verify. It will immediately tell you if the number is valid or not and, if it is, the name of the company to which it is registered. If you have an iPad or an iPhone you can get an app which will let you do this without going to your computer. It is called Calc VAT by Aaron Wardle and costs 59p.

If the VAT number is not valid then you are within your rights not to pay the VAT. And I would recommend reporting the trader to the local Trading Standards office too.

And please do not be tempted to pay someone in cash to avoid VAT. If you do that you are colluding with a crime – tax evasion.

Insure that car!
Anyone who keeps a vehicle, even on a drive or in a garage, will have to insure it unless they register it as officially off the road. At the moment the police can only fine motorists or seize vehicles which are being driven on public roads without insurance. But the new rules, which are expected to begin in April, will make it an offence to be the keeper of a vehicle which is not insured unless it has an official Statutory Off Road Notice (SORN). The SORN – which can be obtained free – is already needed to avoid being fined for not paying Vehicle Excise Duty (car tax) if a vehicle is not used. In future a SORN will also be required if you have a vehicle which is taxed but not insured. Anyone with a vehicle that does not appear on the Motor Insurer’s Bureau database as insured will be written to and warned that if they do not insure the vehicle or take out a SORN they will be fined £100. If they still fail to insure the vehicle it may be seized and destroyed. The Government estimates that about 1.4 million people drive uninsured vehicles and the insurance industry says that the cost of their accidents – which it underwrites – adds £30 to the bills of all insured motorists. Check if your car is insured at www.askmid.com/ownvehicle.

New tax fiasco
Nearly half a million taxpayers are to be told they must pay an average of £400 each in tax the Revenue failed to collect three years ago. This demand for tax from 2007/08 comes just months after the Revenue wrote to 5.8 million people telling them it had got their tax wrong in 2009/10 and 2008/09. Nearly 1.5 million of them had to repay an average of £1400. Despite advice in the press and here in Saga Magazine only around 20,000 challenged those demands (technically called P800s) and just over 6000 got the tax written off.

These new demands should be easier to challenge as they are for much older tax. All you have to show is that you have told the Revenue everything it needed to know about your job and pension and you reasonably believed that the tax you were paying was correct. Most people who are told by HMRC what their tax is ‘reasonably believe’ that the Revenue got it right! So if you get a P800 challenge it on those grounds under Extra-Statutory Concession A19. Many Saga readers already have and got bills for well over £1000 written off.

As well as overpaid tax, the Revenue will be repaying overpaid tax right back to 2004/05. If you are owed tax you will get a written letter and then a cheque in the post. If you get an email that seems to be from Her Majesty’s Revenue & Customs which says you are owned money it will ALWAYS be a fake. Delete it, however convincing it seems.

e-mail Paul Lewis on paul@paullewis.co.uk