The Great Tax Blunder

Posted on September 15, 2010 by Loanfinder

Nobody ever liked the tax man, but the recent tax muddle has been a disaster for many people. Up to 15 million people could be affected by the HM Revenue & Customs tax mistakes stretching back over six years. Many who underpaid are facing unexpected tax bills, while others are even owed money by the revenue as a result of the massive blunder caused by updating the computer system. (Source: Guardian Money)

Who is affected?

Lots of people! But if you have changed jobs many times, or have benefits paid through your earnings, you are especially likely to have been affected.

I have received a nasty brown envelope in the post. What should I do?

Firstly, you must check that the information is correct. This includes checking that the amounts are correct, and that you are on the right PAYE (pay as you earn) tax code. You can see your tax code on your wage slips or a P60.

One of the most common codes is 647L. This is the code you’re normally issued with if you’re under 65 and you’re entitled to receive the full personal allowance for the 2010/2011 tax year – which is £6,475.

You can check your code here:

If you find that your code is wrong, then you must write to HMRC and ask for it to be changed.

How is the money paid back to the taxman?

If a mistake has been made, and you owe under £2,000, you will pay it back in instalments. This will be done through the tax system, and you will be issued with a new code. If it’s over £2,000, you are expected to pay it in a lump sum. (Source: Guardian Money. September 7th 2010)

Do I have to pay?

There is a loophole, and some tax experts are recommending that anyone who has received an unexpected tax bill for the tax years 2008-09 (or before) to ask for the outstanding amount to be written off.

Their rule, is that if the revenue itself has been given all the correct information (by you) to work out a correct tax code, but hasn’t used it within 12 months of the end of the tax year, the tax payer is entitled to ask for it to be written off.

This can be done through something called a ‘statutory concession.’ In tax form language, this is called an ESC A19. For more information about this; click here. Or get  free advice from the Low Incomes Tax Reform Group.

To dispute the amount that has been requested, or make a formal complaint, the Guardian have published some sample letters on their website, which can be found here.

Once you have challenged them, the HMRC will give you a decision on whether to let you off the money.

Lovemoney (7th September) advise that if the HMRC will not let you off, they may offer you a review, or you can ask for one yourself. You must do this within 30 days – and they will pass your case to another officer. After a review, or instead of a review, you can appeal to an independent tribunal. But you can only do this if you did not request the review yourself.

The main thing is to keep in touch with the HMRC.  If they don’t agree with you, and insist you have to pay, you should at least be able to negotiate better repayment terms. This problem has affected so many people however, that things may change. Watch this space for any developments.

Loanfinder are a leading UK independent loan brokers, finding loans for customers by matching them to lenders without charging any upfront fees.  The loanfinder service is straightforward. We review everyone’s situation and search for loans across a number of different lenders (over 200 loan companies). Loanfinder are able to find the best loan on the market for the client.

To find out more or apply for a loan, simply visit our website or contact us by email at info@loanfinder.co.uk.

 

 

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Hard Times

Posted on September 10, 2010 by Loanfinder

If it seems as if everything is going up in price, you would be right. The economy is staggering along like a wheezy old horse, and it seems as if we’re digging ever deeper into our worn out pockets for the essentials of life.

But let’s not get too depressed. At the risk of sounding like a positive thinking guru, there’s always a silver lining to every cloud. Some things do actually cost less than they used to, so here’s a list of savings you can make, without doing all that much.

Credit Cards

The government has made an order to credit card companies about the way that debts are paid off, making the most expensive debts a priority in order of payment. This means that if you have made a purchase that costs you 14% interest and you have got a balance transfer on your card that is currently a 0% deal, any repayments you make will go towards the 14% purchase. http://bit.ly/bmQPKz

Before, most cards would allocate your payments to the 0% deal first, so that the card provider could earn more from your most expensive debts longer. Apart from some cards issued by MBNA, this will only apply to other cards from January 2011. But this move has upped the competition between credit card providers to extend 0% balance transfer deals, meaning that there are some good balance transfer deals to be had at the moment. Barclaycard currently offers the best deal with the Barclays Platinum card offering 0% on a balance transfer for up to 16 months.

More details here.

Mobile Phones

Mobile phone deals remain competitive, especially amongst the smaller providers such as Tesco and Asda mobile who contract to use the network from other providers. Tesco are offering a sim only rolling contract for £10 per month with unlimited texts and 250 minutes of talk time.

http://www.tesco.com/mobilenetwork/

For all the deals available, check out onecompare.

Personal Loans

Although the average cost of taking out a personal loan has risen overall, there are still some good deals to be found. For example, according to confused.com, Tesco’s and Sainsbury’s Finance are offering APR rates of 7.7% and 7.8%. confused.com.

You will have to have a good credit rating to be eligible for these rates, so if you want some other options, use our website for help finding a loan. Loanfinder.co.uk.

Energy Prices

Energy is expected to rise in price again this autumn, so use those comparison sites to make savings. Energy helpline and  Uswitch provide the best services for switching and saving. Remember that paying your bills by direct debit will help you save too, so make sure you set one up.

 

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Managing credit cards

Posted on September 6, 2010 by Loanfinder

The Perfect Storm

The invention of the credit card was an inspired move by the banks. Our love affair with credit cards has transformed the way we shop and manage our finances. Whether you’re buying a holiday or a handbag, the temptation to ‘stick it on the card’ and worry about it at the end of the month, is easily done.

The very convenience of the credit card remains a big factor in getting into uncontrolled debt. Spending on a card can look dangerously like free money. Proof of this can be found in a recent report by the Bank of England, stating that banks and building societies wrote off an eye-popping 2.1 billion of credit card debt in the UK. (BBC news website)
Yet while this figure is down on the previous year’s write-off of 4.1 billion, it still represents a massive amount of people unable to pay off their debts.

So what can we do to make sure we don’t get caught out by credit card debt? Read our guide to the do’s and don’ts of using credit cards.

1) It sounds obvious, but never forget the banks are in the business of making money out of providing credit cards. With average interest rates of around 19%, a credit card debt is an expensive form of borrowing money. So first of all, ask yourself if you really need to make a purchase on a credit card. Often, you are far better off taking out a personal loan to fund a large purchase.

2) Don’t start buying things such as food items with a credit card. This leads to a cycle of debt that will be very hard to pay off. If your finances are so tight you’re using a credit card just to survive, look at ways of increasing your income, such as applying for benefits or get professional finance advice. Otherwise you are just storing up debt problems for the future.

3) Keep your credit balance low. It should be no more than 30% of your maximum personal amount. A good part of your credit score takes into account how much of your credit line you’ve used. Any more than 30% suggests a Paris Hilton approach to spending.

4) Don’t just pay the minimum amount – you should aim to pay off the entire debt every month. Otherwise, you will start to pay compound interest – which is the Rottweiler of the credit world. Compound interest, means that you pay interest on your interest, as well on the amount you have actually spent. And, of course, the higher the APR on your credit card, the higher the compound interest.
Compareandsave.com, have a very handy credit card calculator, which shows you how long it will take you to pay off your debt. Just click here.

5) Never ever miss a monthly repayment. Research by the price comparison site confused.com, found one in four (26%) credit card holders have been charged at least once in the last 12 months for missing a late payment. (Finance Markets, July 18th 2010). Not only will you be charged £12, you will also cause serious damage to your credit rating. If, like me, you have a memory like a sieve, set up a direct debt to make the payments. This way, you don’t have to try and remember to pay. Remember though, that you shouldn’t be paying only the minimum – this is just to cover yourself in case you do forget. You can always pay more when you get your statement.

6) If you have a reasonable credit rating, consider a balance transfer to a card offering a 0% APR introductory rate to clear an existing debt. But check how long you have to clear the debt, and NEVER spend anything on a credit card transfer card. The idea is to clear your debts, not accrue more. Remember, there is a fee for transferring your debt – normally 2 – 4% of the amount you owe.

7) Beware the fees. If you take cash out on a credit card, don’t pay on time, use a credit card cheque, or spend money abroad on your card, you can be charged hefty fees. Avoid at all costs.

Finally, if you have serious credit card debts, and cannot pay or transfer your existing debts, you must contact your creditors to tell them you’re having trouble paying. They may allow you to make a repayment arrangement. Alternatively, consider a personal loan (unsecured) with a lower interest rate to pay your credit cards off once and for all. Just make sure you can afford the repayments – if you have a poor credit rating, it may not be possible to borrow at a lower rate of interest than your credit cards.

Loanfinder are a leading UK independent loan brokers, finding loans for customers by matching them to lenders without charging any upfront fees. The loanfinder service is straightforward. We review everyone’s situation and search for loans across a number of different lenders (over 200 loan companies). Loanfinder are able to find the best loan on the market for the client.

To find out more or apply for a loan, simply visit our website or contact us by email at info@loanfinder.co.uk

 

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Financing a new car

Posted on September 3, 2010 by Loanfinder

September 1st is the day that the new car registrations were released. But buying a shiny new car doesn’t come cheap. According to the Society of Motor Manufacturers and Traders, (SMMT) new car registrations fell by 13.2 % in July of this year. Yet the VAT rise in January means that if you are thinking of swapping your banger for something better, then now is the time to buy.

So, with new and used car dealers keen to attract customers, we’re taking a look at car finance, and the different options available for financing a new set of wheels.

Hire Purchase

A hire purchase agreement is normally arranged through a dealership. The buyer puts down a deposit and pays a fixed monthly installment for a period of usually three to five years.

However, you don’t legally own the car until you’ve paid back all the money you owe. This means that you can’t modify or sell it without the lender’s permission. So adding alloy wheels or go faster stripes to your new motor, is a big no no!

Your contract is with a finance company (not the retailer) who can take the car if you don’t keep up the payments. However, this means that it’s also possible to get a reasonable interest rate because the lender knows they can always repossess the car if you fail to pay. It’s also worth knowing that the car salesman is on a commission for the loan they sell you, so always haggle to get the finance repayments down. Check price comparison websites before you go, so you have some idea of the rates available. You can use this information to get the best deal when you start to negotiate. As always, remember to check the small print for hidden fees and costs such as arrangement fees.

Personal Contract Purchase

It’s a bit complicated, but a PCP is a way of borrowing money for a car, without committing to keeping it, so it’s useful if you change your vehicle regularly or are easily bored. You pay a 10 – 20% deposit, and then make monthly repayments, typically for 24 – 42 months. The repayments are lower than a HP contract because you are deferring some of the purchase cost of the car until the end of the term. When the contract ends, you can then either choose to hand the car back, or pay the slice of money you deferred to complete the purchase.

PCP contracts have fairly strict rules such as limiting your mileage, and you’re not allowed to sell the car, so you need to check the terms and conditions carefully. Some will also include maintenance of the car, but again, you will need to check.

Leasing

Basically, a leasing plan means you are renting your car, but they are becoming increasingly popular. Also known as contract hire, lease hire allows you to drive away in a brand new car and it can help you avoid the problem of your car losing value. It can also often work out to be as cheap as borrowing, once you take into account interest repayments on a loan.

For example, carleasing.uk are offering a Toyota Aygo hatchback at £147 per month inclusive of VAT for 35 months.

It’s important to note however, that lease hire will include a limit on the mileage, and a financial penalty for every mile you do over the limit. And if the car isn’t returned in good condition you will be charged. There is also a one-off initial charge for delivery, set-up costs, and commissions.

Personal Loans

There are hundreds of personal loans on the market for borrowing money for a new car, so as always, shop around for the best interest rate, or use a loan broker to help you find one. You’re not borrowing from a dealer, so you have more chance of getting a lower interest rate.

The advantage of taking out a personal loan to finance a car, is that you own the car, and so there are no restrictions on its use. The car is yours to do what you like with, and you can always sell it on.
This is Money quote a typical deal for purchasing a Ford Focus. If you put down a £3,000 deposit and borrow £12,750, monthly loan repayments with Santander are £402 over three years and £261 over five years. Tesco Bank quotes £397 and £255 per month respectively.

A word of warning

Finally, before you actually go ahead, remember that 1 in 3 cars have some sort of hidden history, such as having been stolen or a number plate change, so it’s always best to make sure the vehicle you’re buying doesn’t have some kind of gruesome history. If you’ve been unlucky enough to buy a stolen or dodgy car, it can be seized, so you could wake up one morning to see your beloved new motor being towed off by the police. To be sure you’re not buying a hot potato, the AA run a really useful data checking service for £19.99, which can find all this out for you. To go to their data check site, click here.

Loanfinder are a leading UK independent loan brokers, finding loans for customers by matching them to lenders without charging any upfront fees. The loanfinder service is straightforward. We review everyone’s situation and search for loans across a number of different lenders (over 200 loan companies). Loanfinder are able to find the best loan on the market for the client.

To find out more or apply for a loan, simply visit our website
or contact us by email at info@loanfinder.co.uk

 

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The big climb for Julia’s House

Posted on August 31, 2010 by Loanfinder

Raising money for the Julia’s House Hospice is an ongoing project close to our hearts here at Loanfinder, so we’re very proud and happy that our all of our team managed to raise so much for them by climbing Kilimanjaro. Our sixteen climbers, which included our very own MD James Benamor, are now back at their desks nursing their blisters. So how did the trip go?

Kilimanjaro is roughly 7 km high, but it took our intrepid team only seven days to make it to the summit. On the way up, they endured extreme freezing temperatures, hallucinations of hoola girls and frogs, and a lack of sleep. Which makes even camping in Wales seem like a five star experience.

While the temperature averaged -10 to -20, the wind chill factor made it even colder – feeling more like -40 at times. But not only did they have sub-zero temperatures to cope with, some of the team were also badly affected by mountain sickness, and suffered from hallucinations, difficulties sleeping and breathing. Because of the mountain sickness, the team arrived at the summit in different stages, with the people who were suffering from the worst of the sickness hampered by the punishing effects of lack of oxygen. But they battled bravely on, and reached the summit fifteen hours after setting off on the final day.

Jon Adams described his final push for the summit to me. ‘We had just one hours sleep before the last stage of our journey. We had to get up at midnight, and climb until we reached the top. I arrived at the edge of the crater and had a ten minute break, before carrying onto the summit at the very highest part of the crater, arriving seven and a half hours after setting off. It was the most amazing experience of my life – I’ll never forget the views.’

It’s a spectacular achievement for them all, and all the punishing hours of training finally paid off. But best of all, people are still donating and Julia’s House stand to gain over £10,000 from the climb. So once again, on behalf of our incredible team, thank you to all who donated.
And if you would like to help, there is still time to donate. Just go to James Benamor’s Just Giving page.

For more information about Julia’s House, click here.

Loanfinder are a leading UK independent loan brokers, finding loans for customers by matching them to lenders without charging any upfront fees. The loanfinder service is straightforward. We review everyone’s situation and search for loans across a number of different lenders (over 200 loan companies). Loanfinder are able to find the best loan on the market for the client.

To find out more or apply for a loan, simply visit our website or contact us by email at info@loanfinder.co.uk

 

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