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not do is borrow long term on your credit card: while
borrowing is very easy, the cost is high, as Matt Barrett
of Barclays pointed out: at the interest rates they
charge, your debt will double in only a few years.
This warning is not meant to exclude the occasional
unexpected dip into the red. What is at issue is a
significant level of medium- or longer-term borrowing.
If that forms part of your financial requirement, then
you should go to your bank and arrange an overdraft
or a personal loan, for which you will pay half or less of
the credit card rate.
Or you can arrange a low-cost balance transfer, which
will at least buy you up to a year s breathing space. And
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7 Ways For Anyone to Boost Their Income
if you are looking to pay off credit card debts along
with other amounts you owe, there are the options of
re-mortgaging or equity release.
Example: How £100 Compounds
RATE% AFTER 3 YEARS AFTER 5 YEARS
18 £164 £228
20 £172 £248
22 £181 £270
25 £195 £305
Summary
f&
Two golden rules  pay on time and stay within
your spending limit. Otherwise, it will cost you!
f&
If you always pay off your bills, think about 0%
purchase offers  but you will have to pay the
card minimum each month and stay within your
spending limit.
f&
Balance transfers at 0% are an attractive way
of borrowing. Cost in the transfer fee; will you
pay off at the end of the deal or do you hope to
keep rolling over?
f&
Credit cards give you protection under the law if
your supplier goes bust. This also applies abroad
 charge cards and credit card cheques excluded.
f&
Pay off store cards in full: in general, their
interest rates are relatively high.
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The Third Way  Sort Out Your Credit Cards
f&
Choose your card when you go abroad: if you
want to avoid a foreign currency charge, think
Nationwide, Post Office or Saga in the EU.
f&
Loaded cards can be useful if you want to set
a budget or if you have a backpacking son/
daughter. But allow for the operating costs.
f&
ALWAYS shred or cut up your bills and
statements and any letters which refer to your
financial situation.
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Chapter 4
The Fourth Way  Keep
Your Tax Bill Down
Are You Paying Too Much Income Tax?
According to the official National Audit Office, several
million people may have overpaid their tax because of
deficiencies in the pay-as-you-earn (PAYE) tax system.
The tax system has become complex, which means that
it can be prone to errors -with a number of key points
for likely mistakes, such as when people move from
basic to higher-rate tax.
So what do you do? You could go to an accountant, for
which you will pay. Many people, whose tax affairs are
fairly straightforward, will handle their own tax direct
with the Revenue. For both sets of taxpayers, there are
a number of basic rules to follow  even if you decide to
go to an accountant, he will depend on you for full and
accurate information.
Tell the Revenue
Your first step has to be to tell the Revenue all they
need to know about you and your family. This means
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The Fourth Way  Keep Your Tax Bill Down
your date of birth, your marital status, where you live,
what work you do, your National Insurance Number
 and the same, if it applies, for your partner and your
children.
The next thing you have to resolve is to keep records,
and keep them for at least six years. You have a legal
responsibility over record-keeping; just as important,
you will need these records if you get into a dispute
with the Revenue or when they make a mistake.
Remember that they are not infallible, and you may be
the unlucky one who suffers.
Read What They Send You
For the same reasons, you should read with great care
whatever documents you receive from the Revenue.
You should get an annual coding notice early in the
year and you can expect them to send you assessments.
Pay particular attention if the Revenue changes the
District which handles your tax affairs: this is done for
reasons of internal staffing and organisation, but there
are obvious possibilities for error if your files are moved
from say, Leicester to Cornwall.
Your coding notice is a must for you to read and
check. This shows all the allowances and deductions
to which you are entitled and this information is used
to work out your tax code. Pay close attention to your
coding notice when you reach age 65 and 75 when
your allowances increase, subject to your income.
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7 Ways For Anyone to Boost Their Income
People who have had changes to their working lives are
reckoned most likely to be paying the wrong amount.
You could, for example, be put in an emergency tax
bracket if you failed to hand in your P45 when you
changed jobs. If you had a company car but no longer
have one, you should check that your code reflects your
current situation.
When you read what the Revenue send you, be on the
alert for any deadlines. It is a very bad idea to be late
 especially with your tax return itself. You will have
to pay if you are late and your file will start to suggest
that you are either careless or being slow for your own
financial advantage. That is not something which you
want to encourage.
The Key Tax Forms
P45: you are issued with this form when you leave
your job. It s important to keep this and give it to
your new employer  otherwise you may be taxed
too much.
P60: this is the summary you should get, usually
every May, which sets out the amount you were
paid and the tax deducted during the previous
financial year. Keep this and check it against the
Revenue s figures. (You get a P60U if you are
unemployed.)
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The Fourth Way  Keep Your Tax Bill Down
P11D: this normally arrives in May or June and
shows the taxable benefits you received from your
employer over the previous tax year  including
your company car. Check this form, which
the Revenue will use to add up your tax bill,
especially for instance if you changed your car
during the year.
On timing, you need to be aware that from the 2007 8
financial year the Revenue is cutting three months off
the period in which you are allowed to file a paper self-
assessment return. This must now reach the Revenue
by 31 October  only about six months from the end of
the financial year  though you still have to 31 January
to file a return online.
Your Family Tax
You are now a late twenty/thirtysomething with a
partner and two small children. Your first step is
to make sure that you both are getting your proper
tax allowances. If you work for an employer, you can
simply go to the salaries department. If you are self- [ Pobierz całość w formacie PDF ]