NEWSLETTER FOR WINTER 2008  [Website hits: 16,510 – last 12 months]

What a year.  We appear to have lost confidence in anything foisted upon us.  It has to be accepted that we are powerless to do anything about it, as we live in a democracy, and that seems to be the way that this era functions.  Admittedly we are told that we have a choice: to put a cross every four or five years, to exercise our democratic right.  But, where does that get us, as individuals?  Legislation is passed on to us, and we are, as citizens, expected to “obey”.  As self-employed and business persons, we are obliged to function within these changes, and it is this that our practice’s clients turn to us.

Financial circumstances – mean that we are presented with a massive deficit that will be passed on to future generations.   Lending by banks to allow people to buy homes that they could not afford to buy, is accepted to have got out-of-hand.  The American banks appear to be more culpable, but it took around a year before we were more fully informed. As a result of this, lending has been cut back, and on a personal front, our “junk mail” advising us that we have been approved large sums of credit, dried up for a few months.  However, Her Majesty’s Government’s attempts to “stimulate” the economy, by reducing interest rates gives borrowers with mortgages an opportunity.  Back in the early 1980s when Mortgage Interest Relief was being phased out, this practice advised its clients to make, where they could, overpayments of monthly mortgage repayments.  An example was quoted showing that a then modest additional monthly amount, would reduce the mortgage period quite appreciably.  This meant that instead of a mortgage period being that of a standard 25 years, that perhaps, between 10 to 15 years of mortgage repayments could be saved.  This would thus leave funds in the hands of the “borrower” enabling them to spend it in whichever way they wished rather than have it “pledged” to the mortgage company.  Such advice then was derided by the building societies (banks were not so much in the mortgage market yet) and the media.  Maybe the situation arises today, so that those who can afford to, ought to take advantage.  As ever, with a “wealth” warning, that it should not be done at the expense of other essentials.  A mortgage “holiday” can always be taken if necessary.  In a recession, cash is king so it becomes a buyers’ market.  For us as business people, to sell our goods and services, we have to be flexible, and often have to “add value” to make our goods and services more attractive to those who pay us.  This practice still prides itself on providing free ABC Accounts Books to enable its clients to keep simple records to enable us to represent you in the best possible way.  Keep using these tools, and our current  great business partnership can be maintained.      

Tax Changes – Two “budgets” caused consternation.  The removal of the 20% starting rate of tax finally kicked in, and what a rumpus it caused.  This practice called for its abolition as long ago as 2005, but stated that the Personal Tax Allowances should be increased.  Parliament eventually forced the Chancellor (whose ever hand it was) to do this.  Then in October 2008, we had more controversy.  Proposed Inheritance Tax changes mean that more of our hard-earned “wealth” could be passed on.  Each of the two main political parties claimed this, but any measures were overdue.  The problem with Long Term Care Homes still persists, and careful tax planning is needed.  Please feel free to contact us on this.

Royal Mail problems continue without any positive response from that body, although letters have been sent to the Chairman.  Please do continue to write your names (and addresses) on the back of correspondence. While we appreciate that it is rarely practical to weigh outgoing post, and to check the enigma of the postal rates, we tend to over-stamp all outgoing post by a few coppers to attempt to avoid those infernal “red-cards” and penny-pinching surcharges. 

Filing of tax returns  – the date for paper returns passed on October 31.  Our practice has filed “on-line” for the past two years, but if yours has not been filed, please look up the information requested of you in May, and let us have the information, in full, immediately.  The filing date is 31 January 2009