|MARTIN LEVIN & CO|
|Taxation Practitioners Accountants & Auditors||
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NEWSLETTER FOR WINTER 2007 [Website hits: 14,000]
As promised, in the 7 September 2007 special newsletter, the “normal” letter follows. It is a conundrum whether to devote this letter to factual tax matters, or perhaps to be brave, and venture into predictions.
Tax Changes – It was not until perhaps the 9 October 2007, when a change of Chancellor resulted in controversial changes. The proposal to “simplify” Capital Gains Tax from 6 April 2008, provoked wide criticism. The Press jumped up with headlines of an 80% increase. (From 10% after business taper relief, etc) to 18%, was the simple arithmetic. Actual workings of those clients who asked for calculations resulted in the fact hat if an asset had been held for a long period of time, then the loss of indexation and taper relief, would set them at a disadvantage, but the overall tax payable change might not be so drastic. It is the very long term held assets that would lose the tax “benefits” that would be withdrawn on 6 April 2008. But should those clients sell their 2nd properties? Consider the simple economics law of “supply and demand”. Too many properties being offered for sale: result lower property prices. Fact: With the problems of Northern Rock and similar other banks and building societies that loaned money to those who really could not afford a mortgage debt, are we going to be faced with a glut of properties on the market thus further depressing house prices? With these banks tightening up their lending criteria, will we experience another “recession” type downturn. Back in the mid 1980s, I used to attend “business lunches”. I was seated next to a building society manager. As an icebreaker, I offered: “aren’t you worried about the amount of debt that you are creating?” The answer came: “It’s competitive; if we don’t lend it, someone else will”. By the early 1990s, we had negative equity, and re-possessions in the recession. It took until another generation to take their place in the employment world, until property, and some businesses (not all) recovered
Inheritance tax was also re-vamped. The conservative party conference a week or so earlier had announced figures. The not-so-new-labour administration then announced (on 9 October 2007) that spouses (and civil partners) could benefit from greater exempt bands. But, why did it take so long for either political party to act? Had both disregarded the voters so much, and treated them with such disdain over the past decade or so, to allow house price inflation to grow, and yield excessive sums of tax from people who have striven to provide shelter, and perhaps a better life, for their families, only to have sums confiscated by taxation? I also put the cost of long-term health care under this category. (Yes, again).
Royal Mail problems continue to affect us all. With the advent of as “larger envelope” fee, the cost of sending a set of Financial Accounts in a binder, which we like to send out marked “please do not bend”, becomes more expensive. Likewise there are several incoming items of post, that are under-stamped, and so we are left a “red-card” saying “so many pennies to pay PLUS a £1 handling fee”. As the sorting office is twenty minutes away, we never collect it. We always send the “red-card” back, asking “name of sender, please”, as all clients are asked to put their names (and addresses) on the reverse of all envelopes. We never get a reply from the sorting office. Although we have also written to the Chairman of the Post Office, the reply that we received was: “there is no space on the red card to do this”. Missing the point? And they are in the communications industry.
For most of our clients, this should not be a problem, as they are not tardy taxpayers. Our record of filing most returns by early summer continues. Thanks to your co-operation this should continue. If you have not had your Return filed by now, please look at our Checklist and letter sent to you in April, and let us have the full information, quickly. Our high class service is best served by clients who are prompt, and provide accurate documentation.
As clients, your co-operation, and promptness in dealing with our twice a year requests (Tax Return info, and Financial Accounts data) has been so very much appreciated. Thank you. An especial high-class service is always given to you. Long may it continue.