Fletch on finance

1. With a little help from your friends
Personal recommendation is a great way for companies to sell their product or service and that’s why many offer incentives if you do recommend them. There are plenty of offers out there from points and vouchers to cold hard cash, so if you know of a friend who is shopping around for a product or service that you’re happy with, it’s worth seeing if you could both benefit.
 

2. Driving down costs
If you’re in the market for a car, whether new or used, then hold off for another week! Wait until March to shop around and you could benefit from further discounts as most dealers will need to meet their quarterly sales target and you could walk away with a bargain if this quarter’s been slow.
 

3. Save money and the environment
Buying a new computer can hit your wallet hard and as we all know, getting rid of items like personal computers can be costly to the environment. However, you can be kind to both if you’re prepared to buy a refurbished computer from reputable retailers like Dell or PC World who have outlet stores where you also get a warranty and support.
 

4. But if you’re thinking of selling…
According to a recent Which report, online hardware trade-in websites on average offer a much worse deal than selling your old laptop on eBay, so it’s worth shopping around to make sure you’re getting the best deal. A word of caution though, if you sell on eBay and the buyer is picking up the purchase from you, ask them to pay in cash as there have been issues recently with PayPal accounts being hacked and the money you receive being recalled.
 

5. Gardening on the cheap
If, like me, you need some inspiration to get you out of your chair and your garden is looking leaf strewn and sodden at the moment, don’t despair! Collect up the wet leaves in large plastic bags, store them for a couple of years and voila, you’ll have a rich, and more importantly, free mulch.
 

6. Fresh or frozen?
A recent report has found that households who buy fresh food are spending more on their food than those who buy frozen. In addition to the fact that frozen food is often cheaper than fresh, buying frozen means there’s less waste too.
 

7. Avoid motorway rip-offs
I’ve written before about how to avoid paying over the odds for food and petrol whilst travelling, but if you don’t fancy making packed lunches then this could be the solution for you! Arm yourself with a copy of ‘The Great Motorway Secret’ which lists all superstores near motorway junctions and pay normal prices to top up your tank or fill up on food.
 

8. Pedigree chum?
If you’re thinking of getting a dog then bear in mind that pedigree breeds cost approximately a third more to feed and insure than your standard hound. By choosing a dog from a shelter you can feed your soul as well as your bank balance by giving them a good home.
 

9. The brush off
And whilst we’re on the subject of dogs, regular grooming and teeth brushing can save you money on vet and grooming parlour bills and unless you’ve a particularly cantankerous furry friend, it shouldn’t take long to do either!
 

10. Technology is the key
Whilst the price of computer hardware seems to always go down, software doesn’t, on the whole, seem to do the same. So if you’re fed up of paying through the nose for software it’s worth seeing what free software you can get online. For example, for free anti-spyware check out Windows Defender and Open Office is a free resource for spreadsheets, documents and more.

This is a real reply from the Inland Revenue. The Guardian newspaper had to ask for special permission to print it.    

Dear Mr Addison,

I am writing to you to express our thanks for your more than prompt reply to our latest communication, and also to answer some of the points you raise. I will address them, as ever, in order.  

Firstly, I must take issue with your description of our last as a “begging letter”. It might perhaps more properly be referred to as a “tax demand”. This is how we at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.
 
Secondly, your frustration at our adding to the “endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat” has been noted. However, whilst I have naturally not seen the other letters to which you refer I would cautiously suggest that their being from “pauper councils, Lombardy pirate banking houses and pissant gas-mongerers” might indicate that your decision to “file them next to the toilet in case of emergencies” is at best a little ill-advised. In common with my own organisation, it is unlikely that the senders of these letters do see you as a “lackwit bumpkin” or, come to that, a “sodding charity”. More likely they see you as a citizen of Great Britain, with a responsibility to contribute to the upkeep of the nation as a whole. 

Which brings me to my next point. Whilst there may be some spirit of truth in your assertion that the taxes you pay “go to shore up the canker-blighted, toppling folly that is the Public Services”, a moment’s rudimentary calculation ought to disabuse you of the notion that the government in any way expects you to “stump up for the whole damned party” yourself. The estimates you provide for the Chancellor’s disbursement of the funds levied by taxation, whilst colourful, are, in fairness, a little off the mark. Less than you seem to imagine is spent on “junkets for Bunterish lickspittles” and “dancing whores” whilst far more than you have accounted for is allocated to, for example, “that box-ticking façade of a university system.” 

A couple of technical points arising from direct queries:-
 
1.. The reason we don’t simply write “Muggins”on the envelope has to do with the vagaries of the postal system;
2. You can rest assured that “sucking the very marrow of those with nothing else to give” has never been considered as a practice because even if the Personal allowance didn’t render it irrelevant, the sheer medical logistics involved would make it financially unviable. 

I trust this has helped. In the meantime, whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to “give the whole foul jamboree up and go and live in India” you would still owe us the money.  Please send it to us by Friday.  

Yours sincerely,
H J Lee
Customer Relations    

This post has been written by Simon Brett, Head of Investments at Parmenion Fund Research, with whom we work closely in providing investor solutions.

In recent years it has become fashionable to speculate on the demise of the United States as the world’s leading economy. Like Europe it has a large fiscal deficit, moribund housing market and wounded banks. It even suffered the indignity of losing its AAA status from Standard and Poor’s in August 2011, owing to the budget impasse. In recent years Emerging Markets have been the exciting investment story with their potential for growth. And don’t forget talk of the United States being eclipsed are nothing new, Germany at the beginning of the last century was a growing power and in the 1980s Japan and its way of doing business seemed the way forward. However it is easy to forget that the United States still possesses many advantages both natural and human which are likely to persist for some time, continuing to make the United States an interesting, exciting and worthwhile place in which to invest.

Perhaps the most important resource a nation possesses is its people. Their education, attitudes and productivity are important. However many developed countries are suffering from a declining and aging population. Japan’s population began to decline in 2005 and in Italy and Spain the birth rate is below replacement level. Even in China the peak in its population is forecast to be in 2015, leading to the description of a nation “old before it is rich”. The reverse is true for the United States. Its population is forecast to rise to 440 million by 2050 from the present level of 310 million with much of the increase from immigrants and their children. The median age of the population will be just 35 in 2050 compared to 52 for Europe, according to the Brookings Institute. The age and composition of population has important effects on the dependency ratio i.e. how many workers there are to support the young and old. Most government expenditure is on education, social security and healthcare and this has important considerations for the competiveness of an economy. Thus the demographics will continue to favour the United States for some time.

A growing population is fine but a key question to ask is “how well educated is it and is it productive?”  Many in the US fear the country is losing its edge in science and technology, but the facts do not bear this out. A study by the Rand Corporation discovered the following fascinating statistics; 40% of the world’s research and development spending is in the United States and it accounts for 35% of the patented new technology of the OECD countries. It employs 70% of the worlds Nobel Prize winners and accounts for 75% of the world’s top 20 universities. This excellence in education attracts many from overseas to study. Although emerging countries like China and India are becoming more successful, they are both starting from a smaller base and will take time to catch up. American success in science and technology has led to high productivity levels ahead of Europe and Japan, particularly in those higher value added industries such as aerospace.
 

The United States is blessed with natural resources. It has more proven and undiscovered resources of oil, gas and coals than any other country in the world; greater than China, Saudi Arabia and Canada combined. It will not run out of energy anytime soon; it has 28% of the world’s coal, enough for 218 years and has future reserves of natural gas that will last 90 years. In the past this abundance of natural resources gave the United States a comparative advantage, and this combined with a growing population, a large land mass with a common law and currency has allowed for economies of scale in both government and business. Compare these advantages with the problems of the euro land which is struggling with its common currency and the Chinese scouring the world to secure their natural resources.

All of the positive traits that made the US so successful still exist. It still produces world class companies such as Apple, Microsoft and Boeing that produce goods people want to buy and use around the world. It is sometimes easier to look for the new hot investment idea like frontier markets and forget the positives for the United States.

1. Rent your driveway
If you’ve got space to spare on your driveway then you could rent it out and with charges from £5 per day it’s a nice sideline! If you live near a tube or train station your typical customer will be a commuter and if you’re near an airport you could offer rental to holiday makers and even earn a little more by offering a taxi service to the airport and back. There are several sites that you can advertise your space on (for a fee), for starters take a look at www.yourparkingspace.co.uk and www.parkatmyhouse.com.
 

2. Bags of savings
If you live in Wales then this can start saving you money straight away, if not then you’ll save in the future by getting into the habit of remembering your reusable shopping bags. Last year saw the introduction of a levy of 5p if you wanted a disposable plastic bag in Wales and with ongoing discussions about whether it should be rolled out nationwide, it’s worth making the effort now. Plus you’re helping the environment.
 

3. Walk the walk
If you’re a sprightly OAP and like to get to places early, think on! You’ll already be aware that you can’t use your bus pass before 9.30am, so if it’s a reasonable distance a gentle walk will save you the bus fare and will also provide some free exercise.
 

4. Read all about it!
We all like to keep abreast of the news, but if you prefer the printed to the online version it can be a costly indulgence. However, if you live in a University city, it’s worth checking out the prices in the local shops near the University; you can save up to 60% off the cover price of certain publications.
 

5. Lights, camera, action
It doesn’t matter about the style of your house, its size or gardens, advertising agencies and production companies have specific requirements and your house may fit the bill! From photoshoots to domestic dramas to films, it’s possible to earn up to £1,000 per day and what’s more, your neighbours may be in for a windfall too if they agree to let their house as a green room.
 

6. Rent a room scheme
It’s not for everyone, but if you have unused furnished rooms in your house they could provide you with an income. And if it brings in below £4,250 in rental per annum it’s tax free too. You can find out more about the criteria on the HMRC website

7. Avoid the fees
If you want to avoid paying fees for foreign currency and you’d feel safer not carrying large wads of cash around then purchasing a prepaid card may be the answer! There are providers who won’t charge for withdrawing money from a cashpoint abroad which will save you money but make sure you take into account any additional loading or lack of activity fees.
 

8. Cashback cards
There are many credit card providers who offer cashback deals, so although I wouldn’t ordinarily encourage credit card use, for those who use it cannily it could be a way of earning some extra cash. Look out for annual fees, try to sign up for a card that offers unlimited cashback and then use it for your weekly shop and all petrol. As long as you pay off the balance at the end of each month you’ll be laughing!
 

9. Pet insurance
This is another instance of when a small regular outgoing can actually save you money in the long term, but only if you buy right. If you have a pet then you’ll know that vet’s bills can be quite costly. Most pet insurance covers many ailments, the treatment and any medication, all of which helps alleviate the financial burden. However you could save on your monthly premium by choosing a more basic cover with the option to add on extras as you see fit. For example a policy which covers vet’s fees only could save you money in the short term whilst still giving some protection should the need arise.
 

10. Sale savvy
Well, I’d be missing a trick if I didn’t mention them! If you’re in the market for electronics, especially those popular items like TVs, Sat Navs and games consoles then now is the time to buy. As well as being the standard sale season many retailers bring out new catalogues and manufacturers discontinue products around this time of year so you could snap up an even bigger end of line bargain.

1. Sale fever
As my Mum used to say, ‘Just because it’s cheap doesn’t mean it’s a bargain!’ It’s very easy to succumb to sale fever and end up with a load of tat you’ll never use or wear. Avoid this money sapping situation by making a comprehensive list of the items you do want, and if possible, shop around before the sales so you know where you want to buy from.
 

2. Little old wine drinker me
With the festive season being upon us, there’s bound to be the odd tipple being consumed and it’s even more likely there’ll be the odd spillage. Before you go calling out the carpet cleaners or chucking more wine at a stain, try sprinkling the offending area with soda water, then talc or table salt, cover with an old cloth and a weighty book and leave overnight. With any luck the stain will be gone in the morning. Unfortunately I can’t help out with the hangover!
 

3. Regifting
Whilst we’d all like to think that our gifts are cherished by all who receive them, it’s likely you’ll receive some that you just can’t or won’t use. Yes, you could donate to your local charity shop but if you think that something would be suitable for someone else then why not regift – it’s the environmentally aware thing to do! Beware you don’t forget where the unwanted item came from or you may not be on speaking terms come the New Year!
 

4. Play your cards right
And for that matter your wrapping paper. This won’t save you money this year, but you’ll be thanking me for it next Christmas! Christmas cards and wrapping paper are necessities that can often add a lot of expense. After Christmas all retailers need to shift their seasonal stock so buy next year’s cards, tags and wrapping paper in the sales – you could even upgrade and still save money!
 

5. Feeling crafty?
If you’re good with your hands and like to see yourself as the next Kirstie Allsopp, you could cut out the middle man entirely and make your own cards, tags and wrapping paper. Again, set yourself up with all you’ll need in the sales this year and you’ll be saving cash and clipping away with the pinking shears come November 2012!
 

6. Plan your presents
If you haven’t already made a Christmas list, then do so now. Many shops have 3 for 2 offers which you can take advantage of if you know who you’re buying for. Leave it much later and you’ll end up panicking and spending more than you intended; remember it’s the thought, not the cost that counts!
 

7. Food, glorious food!
It’s a central part of Christmas celebrations but feeding friends and family can prove costly over the Christmas period. If you’ve the storage space, it’s a good idea to spread the cost and start adding non-perishable items to your weekly shopping list now. This way you can take advantage of special offers and discounts too.
 

8. Party planning
Everyone likes a party but most loathe hosting them! So if you’re planning on having an open house over the festive period, don’t feel bad asking people to bring a bottle and something to nibble with them. Most guests will be happy to oblige and don’t mind contributing, as long as you don’t ask them to do the washing up!
 

9. Use your loaf…and your leftovers
It’s the one time of year when you know almost exactly what you’ll be eating weeks in advance! Make the most of it and look for recipes that will use up all of those leftovers, as the saying goes, ‘waste not, want not’.
 

10. And finally, budget
The key to coming out the other side of Christmas without a mammoth debt is budgeting. It works for presents, social events and food shopping. So before you even think about hitting the shops take some time out to work out what you can actually afford.

Earlier this year we saw the end of the popular Child Trust Fund (CTF) scheme which was set up to encourage saving and create assets for young adults. As a result, Junior ISAs were launched on the 1^st November 2011 to replace CTFs and although there’s no government contribution they do have a generous, tax free contribution limit of £3,600 per tax year. It is estimated that 6 million children will initially be eligible for a Junior ISA with 800,000 more qualifying each year. 

If your child already has a CTF you won’t be able to open a Junior ISA. However, the contribution limit has been raised to align with the Junior ISA (£3,600) so if you can afford to, you should adjust your monthly contributions accordingly. As there is no longer any incentive for providers to offer the best rate of returns for the now defunct CTFs there are discussions taking place as to whether existing CTFs can at some point in the future be converted into Junior ISAs, but no decision has been reached as yet. 

In order to ensure that wealthier parents don’t use children’s saving accounts as a way to avoid paying tax there is a £100 tax free limit on income from savings per year. Junior ISAs are exempt from tax as the savings are in the child’s name and no withdrawals are permitted until the child is 18. However because the account is in the child’s name, as soon as they become of age they can spend the money on whatever they choose, or if they prefer (and you’re lucky!) they can reinvest in an ordinary ISA. 

In today’s challenging economic climate it’s important to give children a head start in life; anyone can pay into the Junior ISA, making it an ideal way of saving for the future. There are only so many presents you can open on Christmas Day!  If you’re a parent or grandparent, small savings now can grow into substantial nest eggs to help with those rites of passage. Whether it’s to help fund their secondary education, buy their first car or help towards that first step on the property ladder, you’ll appreciate that the sooner you start saving the more they can look forward to in the years ahead. Additionally, any payments made into a Junior ISA are exempt from Inheritance Tax so it’s a good way to pass money down through the generations.   

There are two types of Junior ISA; cash and stocks & shares. Each has their merits, and if you decide to invest a decision will ultimately need to be made on which to proceed with. If you’re unsure, then it’s worth consulting an independent financial adviser who will be able to assess your attitude to risk and work with you to find out which ISA will suit your needs best.

1. Co-Buying It’s a simple concept; club together with others who want the same item and get a better deal because you’re buying in bulk. You can join an existing co-buy or start your own. On the BuyaPowa site, the more people join the more the price goes down…and if you bring in the most co-buyers you get the item for free!

2. Bin the gym…keep fit for free How many of us have an expensive gym membership but hardly ever go? Cancel the membership and use the first month’s savings to buy some cheap equipment to use at home. Some space, a mat and items like resistance bands and dumbbells is all you need to start with. For those who want to work out in the fresh air, joining a Green Gym may be the solution – great for physical fitness and the environment too.

3. Keeping it clean And whilst you’re cancelling the gym membership, why not think about cutting your cleaner’s hours too? Doing housework is a great way to keep fit and if you find it quite monotonous, just think about the cash you’re saving whilst you’re vacuuming!

4. Insulate your home With temperatures dropping, now is a good time to make sure your house is properly insulated. Visit the Energy Saving Trust website and find out about the different types of insulation available. The site also details which types of houses are suitable and has a grants and discounts database so you can find out if you’re eligible for financial assistance. 

5. Keep an eye on your usage Another tip that should help keep your bills low now the nights are drawing in; the OWL electricity monitor. Unlike other monitors not only does this gadget let you see how you’re using electricity, it converts that into a cost, making it easier to work out where savings can be made.
 

6. Pay as you go? If you have a mobile and are currently on a monthly contract it may be worth analysing your bills and seeing whether you’d be better off with pay as you go. Check whether you’re using all of your inclusive minutes and texts, work out your monthly average usage and see which comes out cheapest – you could save £s!

7. Plan ahead and use 2^nd class post You may not want to think about it yet, but we all know it’s coming. Yes, Christmas will be here in no time and if you send a lot of cards then you could save yourself some pennies by writing them in plenty of time and sending them second class.
 

8. Save in the sales For those of you that are writing present lists as we speak you’re obviously not averse to a little forward planning! Make this a virtue and think about who you’re going to be seeing after December 25^th – this way you can buy their presents in the sales and save up to 50%.
 

9. Grab an online bargain High street chain Comet have an online auction site that sells end of line, refurbished and slightly damaged electrical and white goods at discounted prices. All items are in full working order and come with a 12 month warranty - worth a look if you’re planning on buying a new TV or dishwasher!
 

10. Have savings, will travel The golden age of air travel may be over, but at least you needn’t pay through the nose – if you’re prepared to be flexible that is. Many airlines reduce their fares on days that most people don’t want to travel, so if you don’t mind a hangover at 30,000 feet then you could be jetting off on January 1^st!

Following a successful pilot scheme in eight key geographical areas, HMRC has announced an extension of its Business Records Checks programme.

What does a Business Record Check involve?
In a nutshell, it involves checks on the quality of small and medium-sized enterprises’ business records. In the pilot scheme it was found around 44% of businesses visited had poorly kept records with around 12% having seriously inadequate records.

Who is on the radar?
If you run a small to medium-sized business or operate as a sole trader then you are precisely the sort of business HMRC are targeting. As of mid-September HMRC have increased the number of full-time staff on this programme from 30 to 120 and aim to complete up to 12,000 checks by the end of this financial year, with a further 20,000 planned for 2012/13.

At the moment these checks are limited to an expanded list of key geographical areas in England, Scotland, Wales and Northern Ireland, however the process is being refined and a final decision on a national roll-out is expected in the New Year.

What’s the worst that could happen?
Initially, only the most extreme cases of poor record-keeping will result in a record-keeping penalty. However, the intention in the long term is to issue penalties of up to £3,000 for serious inadequacies. Further guidance will be issued when an announcement is made when/if the checks are rolled-out.

What should I do?
Whether you have an employee who sorts out your accounts, you do them yourself or you pay an accountant for their services, you, as the business owner, are ultimately responsible for keeping your records accurate and up to date.

A simple rule of thumb is to set up a system for recording sales and expenditure, update records at least once a month and remember that as a general rule businesses need to keep all financial records for a minimum of six years.

If you know your record-keeping isn’t up to scratch or if you’d like to check that you’re doing enough, HMRC have a list of guides from record-keeping for the self employed to Corporation Tax on their site, just visit www.hmrc.gov.uk/record-keeping.

1. Love thy neighbour
Lots of them - in fact all your neighbours within a one mile radius! Yes, sign up with streetbank and as well as building community spirit you can share skills, borrow items like DIY and gardening equipment or get someone’s unwanted items for free.
 

2. Recycling pays
If you’ve got outdated gadgets cluttering up your house then this is the one for you! Asda Tech Trade-In recycle old mobiles, games consoles, MP3 players, Sat Navs and digital cameras and in most cases will pay you for the privilege. Plus if you find you can get more cash from other selected businesses they’ll give you the difference. It’s a win-win situation.
 

3. Keep track of prices
Know what you want to buy but aren’t happy with the listed price? Sign up with a price alert website such as Sale Whale or Price Spider and they’ll keep a track of the item and email you if the price drops by a significant amount (typically 10%), saving you time as well as money.
 

4. A bit of a culture vulture?
If you like to take in the odd exhibition or two you probably already realise that you can soak up an awful lot of culture for free. If you don’t then why not visit the Department for Culture, Media and Sport’s online list and give your local institutions a go – perfect for a rainy afternoon and it won’t cost you a thing!
 

5. Like a duck to water
From mineral to chlorinated! The next time you’re looking to buy a bottle of water, look out for Schweppes Abbey Well who are offering a free swim with every bottle top (subject to Terms & Conditions). You can claim your free swim Monday to Friday until the end of January 2012 and can check local availability on the Schwim Free website. 

6. Fancy a mid-life year out?
Don’t think that InterRail is only for youngsters. If you fancy a sabbatical instead of a mid-life crisis then using an InterRail pass could save you money and introduce you to a leisurely way of travelling. If you’re lucky enough to fall into the senior category then you’ll save even more as anyone over the age of 60 gets a discount.
 

7. Fair exchange
Paying through the nose for foreign currency is a fact of life. Until now that is! CurrencyFair connects people with spare foreign currency with people who want to buy, ensuring competitive rates of exchange. If you’re prepared to invest a little time and register on the website you can browse deals and choose the best one for you.
 

8. App you like it!
I’m a late adopter when it comes to smartphones but I’ve been reliably informed that there are several applications (apps) that can save you money and many are free. For example, MySupermarket transforms your phone into a barcode scanner for use at Sainsbury’s, Asda, Tesco and Ocado where it will help you find cheaper alternatives in store. And Quidco gives you up to 25p a go if you visit selected high street shops such as Carphone Warehouse, Staples and Debenhams – what’s not to like?
 

9. Navigate your way to a bargain
If you’re in need of a new Sat Nav then it’s worth popping along to the Tom Tom outlet store which offers refurbished products at up to 40% off. Each item is put through its paces by Tom Tom and there’s a one year warranty.
 

10. eBay
I know, I know, another eBay mention, but they do seem have bargain hunting sewn up! Now that eBay is tried and tested, the big brands have seen an opportunity to offload refurbished, sale and end of line stock via eBay outlets. With bargains from Argos, Jigsaw, House of Fraser and Very it’s well worth a look.