‘My mother-in-law put a curse on me’: Some terrible tax excuses

That’s right, it’s back! HM Revenue & Customs (HMRC) has released its annual list of worst excuses for missing the self-assessment deadline.

This year the excuses do not disappoint. They are wild, weird and wonderfully imaginative.

Excuse number one:

My mother-in-law is a witch and put a curse on me…

Excuse number two:

I’m too short to reach the post box…

Excuse number three:

I was just too busy: my first maid left, my second maid stole from me, and my third maid was very slow to learn…

Excuse number four:

Our junior member of staff registered our client in self-assessment by mistake because they were not wearing their glasses…

Excuse number five:

My boiler had broken and my fingers were too cold to type…

HMRC also listed some rather imaginative expenses claims, including:

A carpenter claiming £900 for a 55-inch TV and sound bar to help him price his jobs…

£40 on extra woolly underwear, for five years…

£756 for pet dog insurance…

A music subscription so I can listen to music while I work…

 

As they say in Glasgow,

“Aye right!”

Five things Investors should not fear this year

Terence Moll is a chief strategist at Seven Investment Management and a well respected voice in financial circles.

In an Article he wrote recently in New Model Adviser, he muses over why investors should not be worried? He thinks fears are exaggerated – and they actually have plenty to be cheerful about. Here are five things he says investors should not fear this year.

A US recession

The big question for global growth is the US. It is the developed world’s growth engine at the moment, and US recessions have often been associated with equity crashes in the past.

Although some commentators fear a recession in 2019, he is not overly worried.

The US is currently growing at around 2.5%. From these levels, it normally takes at least two years for growth to turn negative.

Moreover, the usual imbalances associated with recession – soaring inflation, a housing crunch or a commodity price shock – are largely absent. He thinks a US recession is unlikely before late 2020, at the earliest.

Trade wars

So far, tariffs have been implemented on around 2.5% of world imports, corresponding to less than 0.6% of world output. They are certainly a negative for growth, but on a tiny scale to date.

Although they could get much worse, the US and China will reach a compromise that will not harm their economies (and their people) too much.

The UK

Brexit is a shambles and investors are worried the UK could end up exiting with no deal in place, which would be a really terrible deal, in March.

But it is in the interests of both the UK and the EU to reach a broadly sensible outcome. He thinks a deal that is not too painful for the UK will materialise.

A Corbyn government

Jeremy Corbyn’s bark is worse than his bite. If he came to power he would be so constrained by the range of views within his Labour party, and by business pressures and economic restraints, he would not be able to do much that would derail the UK’s financial market.

Volatility

Markets are volatile. They move up and down. Whenever markets fall, commentators concoct stories to explain why they have fallen – stories that are often alarming and are frequently complete inventions, with no basis in fact. It is best to ignore the headlines.

Markets were exceptionally quiet in 2017. Volatility returned to more normal levels in 2018, and he expects more of the same in 2019. He says this is not something investors should worry about because it is simply how the financial world works.

Watchdog finds over-50s misled by funeral cover claims

Just a point to note from last weekend’s Telegraph.

People aged over 50 are being misled by life insurers that imply their policies will cover funeral costs in full but instead leave families with bills to pay, according to an Article in the said newspaper.

As a result, the Financial Conduct Authority has issued a warning to firms that offer life cover for the over-50s but do not meet fair promotion rules. Adverts often refer to providing “peace of mind” to those left behind by ensuring they do not have to pay for “funeral and associated costs” but actually may not cover the costs of funerals in full.

The regulator said: “The financial promotions team has seen promotions for life policies for the over-50s where we believe consumers could be misled into thinking they are buying a policy that will cover their funeral costs. If a firm’s promotion includes product features or benefits, these must be presented in a fair, clear and non-misleading way taking into account the target audience.”

I’ve seen adverts on TV which state that no underwriting is necessary and the client will get a Guaranteed Sum on death.  Just remember, you get nothing for nothing and the pay out from these type of plans are small by comparison with a properly underwritten Plan.  Sometimes even there is no pay out in the first two years.  Beware.

Please, take advice from a Financial Adviser who is  regulated by the Financial Conduct Authority and who authenticity can be verified.

 

 

Savers urged to be vigilant after fraudsters steal £202m from pensions

I noticed this piece in the Mail on Sunday and found it to be very disturbing.

The Insolvency Service, which is a part of the Department for Business, has shut down some 24 companies guilty of pension abuse since 2015, according to this Mail on Sunday piece. Around 3,750 victims have been affected, including both individuals and businesses, with losses amounting to more than £200m. Eight company directors have been disqualified for a combined 57 years as a result of the victims’ losses, the article adds.

“There is no room for complacency,” warns Aviva head of savings and retirement Alistair McQueen. “We may spend 40 years saving, so we should spend more than 40 minutes considering our options at retirement.”

Consumer minister Kelly Tolhurst adds: “If you are approached to make an investment from your pension, always do your homework and seek independent advice. If you think you are a victim, report it to Action Fraud or visit the Scam-Smart website for further help.”

Please, if you know someone who is considering taking their pension without taking proper Independent Financial advice, try and persuade them to take advice from a Financial Adviser who is  regulated by the Financial Conduct Authority and who authenticity can be verified.

 

Today’s Markets

I just received an email from 7IM about today’s markets. 

They write; Clients need only to read the news to worry about their investments right now. It’s no leap at all to consider whether a move to cash is a good move. In the context of long term returns, there is a simple answer to that – it isn’t.

Looking back at the worst market conditions in recent memory, we’ve turned to an old favourite to illustrate this…

 A 7IM Balanced holding worth £100k on 19th May 2008, the day the FTSE began its descent that year, is now worth around £156k. However, with a year spent in cash from 1st March 2009, the market low, it would be worth only £126k today. That’s a whopping 56% vs 26% return. Those dates were the worst you could’ve picked but if you’d have been a bit luckier and timed your exit earlier to avoid more downside, i.e. cashing out on 1st October 2008 for one year, you’d experience a 43% return vs 56% had you stayed invested.

Almost every scenario we’ve run ends in a lower return when investments were substituted for cash around the financial crisis. Only if you’d timed it perfectly, into cash at the top and back in at the bottom, did it work. The brightest minds in our industry didn’t call that.

It’s time in the market, not timing the market that pays. 

 

That’s exactly what I’ve been saying for years!