Money News

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 and already pass one key test – the Revenue did not make use of information in what it calls a ‘timely’ manner.  So for a 2007/08 demand 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. Believing is not enough – your belief has to be ‘reasonable’. Of course, 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 demanding underpaid tax, the Revenue will be repaying any 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.

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 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 tax evasion which is a crime.

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. People who use a car for only part of the year should take care that they are not caught by these new rules. Check if your car is insured at www.askmid.com/ownvehicle.

The value of change
Many people habitually throw their loose change into a jar or vase and then cash it in when the jar overflows. But cashing it in can be difficult. Even your own bank may be reluctant to accept it unless you separate it, count it and bag it up. Some supermarkets have Coinstar machines which will convert change into vouchers but they now charge 8.9p for every poundsworth you process. The best deal is to use the self-service tills. Part pay for your groceries with your loose change and pay the balance by card. That way you get full value for your hoard.

Before you do that you may want to sort out your 1p and 2p pieces. Since September 1992, apart from a short time in 1998, ‘coppers’ have been made from copper coloured steel. Before that they were made from solid bronze which is 97% copper with a bit of tin and a touch of zinc. Copper is now worth more than £6 a kilo and the value of this metal alone is more than double the face value of these older coins. Add on the zinc – which is also at a record price – and the metal in these bronze coins is worth more than twice the 1p or 2p on the back. But – and it is a very big but – melting down coins of the realm in the UK is illegal as is exporting them. So even if you sort out your change with a magnet – keeping the coppers and spending the ‘steels’ – you can never realise the true value of your hoard of copper.

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