Barclays Tax Avoidance Documents Leaked

Where does it all go? Well, tax wise at the moment, it goes into paying for bankers mistakes, with the Government, who are at least partly responsible for not foreseeing the problem in the first place, now bailing out the banks bad debts with your money.

And now it turns out that the Banks were not only guilty of mismanaging their business but avoiding paying their fair share of tax whilst they were making billion £’s worth of profit. Allegedly.

The Guardian recently found evidence that Barclays had been busy creating companies in low-tax countries such as Brazil and Luxembourg. Allegedly.

These documents were published on the Guardian website, only to have a judge phone up at 2am demanding they are taken down, and in so doing generating even more publicity around the story than would have happened.

This take down order has now been ratified by a judge, in a chilling blow for free speech in the UK.

The confidential leaked documents describe how SCM, Barclays‘ structured capital markets division, allegedly planned to use more than £11bn of loans to create hundreds of millions of pounds of tax benefits, via “an elaborate circuit of Cayman Islands companies, US partnerships and Luxembourg subsidiaries”.

The tax benefits for Barclays are said to be in the region of £1billion a year, although this is unverified.

And so, Techcrunch in the US, has managed to publish the documents, in solidarity for free speech around the world. Here is the information Barclays do not want you to see:

Barclays Confidential Tax Avoidance Documents

Alleged evidence of Barclays tax avoidance documents:
Barclays Tax Avoidance – Lux
Barclays Tax Avoidance – Knight
Barclays Tax Avoidance – Valiha
Barclays Tax Avoidance – Brazil
Barclays Tax Avoidance – Berry
Barclays Tax Avoidance – Faber
Barclays Tax Avoidance – Brontos

How much going out costs you

Got some interesting statistics from the FSA this week about how much the average 20-something spends on a night out – find out more at www.whataboutmoney.info, a financial site set up by the FSA to help young adults with their finances. They say:

New study reveals the true cost of going out

The Real Life Costs Report* from What about money? found young adults thought they were spending nearly £60 a week on socialising, but in reality young adults are more likely to be spending more than £90 on ONE night out (£92.22 UK average).

The report reveals that many of the UK’s young adults are going out more than one night a week, which could result in spending up to as much as £547 per month just on nights out on the town. That’s over half (53 per cent) of their monthly expenditure on having a good time and a possible £6,570 spent on socialising every year.

This makes for an annual socialising bill of more than £47 billion amongst the UK’s youth population**.

The research found that in the current economic climate, young people are trying to manage their money better but despite their best budgeting efforts, many are getting caught out by the unplanned costs that usually boost the final price tag of nights out.

Over half (53 per cent) said they buy new clothes for a night out but many said they purchase shoes, make-up, and new haircuts adding an average of nearly £30 to their overall spend for a night on the town. It’s easy to see how extra ‘hidden’ costs can stack up!

How did they break this down? Well, according to the study the average 20-something spent:

Young adult cost of a night out…

• Getting ready, e.g. hair, beauty and clothes etc – £28.31
• Drinks -£22.39
• A tasty night-time snack, eg. kebab, chips, bar food and takeaways – £16.42
• Going out and getting home, eg. public transport or taxi fare – £13.23
• Entry to a club, gig, bars and other events – £11.87

TOTAL (night out) = £92.22

I suspect this figure may be gender bias, given the emphasis on the “getting ready” budget. Rebecca Filletti, a 23 year old trainee barrister from London said:

Rebecca Filletti

“It can be tricky to budget for a night out as you sometimes forget about the small things you spend money on – the cost of haircuts, clothes and make-up can all add up, but you don’t consider them part of a night out. Plus added extras like taxis or food on the way home can all mean you spend more than you originally planned to.”

Quite, but compared to my last evening it sounds like Rebecca here was attending the Proms or some such – I find it pays to just take cash out with you and not your card to avoid the temptation of drawing that extra £20 – admittedly I can walk to most entertainment nearby so don’t have to incur transport costs.

It sometimes galls me considering how much a person’s life is spent earning for those couple of hours a week where they can really let their hair down, it seems the way things are set up is too put young people into debt so they have to work the rest of their lives to pay it off – take the Student Loans for example, where only 20 years ago University was free to most, we now of course have University Fees (unsuccessful campaigned against when I was a student)

I made many mistakes when I was 21ish with money that I’m still paying off now – I suppose it is part of the learning process. For instance, taking out a loan with the bank with PPP(which basically you paying the bank to make sure they get their money if you ever go unemployed), running up large overdrafts and not shopping around for deals – all really due to lack of education. I’d be an advocate of basic money sense taught in schools, more so than it is currently, but could the school system just be factories for turning out good little workers for the country these days? (league tables, tests and subjects that work well commercially pushed over arts/fitness)

At any rate, I fully support the intention behind www.whataboutmoney.info so check it out if you’re 16-24 and looking for help, although I suspect if you’re on a personal finance blog you’re probably pretty clued up already!

If you’re interested in the area breakdown for the study, they were:

Money Spent On Night Out
UK Average – £92.22

• London – £93.13
• Yorkshire & Humberside – £82.44
• North West – £91.41
• North East – £80.84
• South East – £88.71
• West Midlands – £90.02
• East Midlands – £78.39
• Northern Ireland – £99.95
• South West – £94.66
• Scotland – £97.35
• Wales – £87.83
• East Anglia – £98.54

*All figures, unless otherwise stated, are from 72 Point. Total survey sample size was 2,000 and was carried out on-line.

**Figures based on current number of 16-24 year olds in the UK (7,220,400) and average annual earnings of this age group in 2008 (£12,313). Data provided by Office of National Statistics.

Never a better time to buy a car?

Cars in the current crises are hitting all time lows, with new, nearly new and used vehicles available to up to half of the price a year ago.

Struck by the lack of credit to new customers and the lack of funds for cash purchases, dealers are desperate to move stock. I was quoted 18.9% for a new car loan recently, which is pretty outrageous (from www.peugeot.co.uk) – the worse bit was I had to spy on the salesman’s fingers on the calculator to get the APR – he kept up with some spiel of “don’t worry about the APR, think of the monthly cost”

Prices may be bottoming out, with the car manufacturers not responding by dropping prices, rather increasing them in reaction to the decline of the Pound against the Euro; Ford and Vauxhall report the are increasing list prices by around 5%.

Also, car dealers are reporting used car prices have risen by £300 from December compared with prices dropping like a stone in the months leading up to Christmas.

Some remarkable deals are around, such as Broadspeed offering two-for-one deals one cars to tempt buyers. Vauxhall are also hoping to tempt buyers with giving you back 5% of your 0% APR finance loan for three years

Rich Headland, editor of Which Car? has said recently:

If you have the cash and your job is safe, there are some stonking bargains out there – particularly for new cars. We recently found Fiat Pandas being sold for new for less than one year old models at dealers.

Smaller cars seem to be holding their prices better than big cars, with people still smarting from high fuel prices in the summer. Car Tax changes also mean you could be paying £350 for your yearly car tax for a big car, to no car tax at all with a modern fuel efficient car.

Lets not forget the new VAT price as well, a 2.5% drop in what you pay which will be taken away in a few months time.

What UK citizens get for their taxes per week

Carrying on with our series on where does your money go, lets use those figures from the post – How Much Money The Average UK Family pays in tax

That post concluded, after income tax and all the other tax such as VAT the average family pays £201.34 in tax. Bear in mind this is last years figures, now we own half the banks our public debt is a lot higher – we’ll cover that next.

But how much has been spent already? From the Guardian money wall-chart we can get a rough idea.

Of our money given in tax in 2007/2008:

• 18% to the Dept of Health
• 10.3% to Education
• 23.3% to work and pensions
• 21.3% for benefits
• 5% for debt interest – this is obviously going to be a lot higher in 2008/2009
• 6% to the Ministry of Defence
• 3% for transport policy
• 5% for Scotland
• 2.5% for Wales
• 1% for Northern Ireland
• 3.6% for Universities
• 3% for Tax Credits
• 1% to decommissioning Nuclear Waste
• 0.5% for Iraq/Afganistan Wars
• 1% to Policing

Using these figures, an average family earning £32,799 a year contributes, each week:

• £36 to the NHS
• £21 for our schools
• £47 for the OAP’s
• £43 for those on benefits
• £10 on the public debt interest
• £12 for the Army, Navy and Airforce
• £6 for the roads and rail
• £10 for Scotland
• £5 for Wales
• £2 for Northern Ireland
• £7.25 for Universities
• £6 for tax credits
• £2 storing nuclear waste
• £1 the Iraq/Afghanistan wars
• £2 for the police

Where UK Taxes Go – The Wallchart

Thanks to Burning Our Money who put me on to the Guardian chart showing how our taxes are spent by the Government – the full pdf can be seen here.

Where Our Money Goes

I’ll be pouring over this chart and looking to use it as a road map for investigation in coming up posts.

Credit Crunch Explained

All these news stories are confusing, but these videos give a good job of explaining it for us mortal folk who are not merchant bankers.

Gives a nice brief overview

SEXY Property History Lesson

Yes, its the internet, it can exist.

The BBC are always good for introductory info…beware propaganda though

BBC NEWS | Business | Credit crunch explained

Bird and Fortune are always good for a laugh….

Sky news reports Darling telling us not to borrow so much money, you naughty boys.

De Ja Vu? MP Darling defends stating the UK Economy is going into recession

Aug 30th – 2008 Darling recently had a piece in the Guardian where he told us:

UK Chancellor Alistar Darling

“the economic downturn would be “profound and long-lasting”,
“…has insisted it is his duty to be straight with the
public, after telling a newspaper the UK faces its worst economic
crisis in 60 years.”
“…that voters were “pissed off” with Labour’s handling of the
economy, a key issue at the next election, and said it was “absolutely
imperative” that ministers communicated their intentions better.”

Basically, we’re fucked and going to have a recession.

And now the PR exercise starts trying to educate the masses that it is not Labours fault.
Watch the BBC interview where Darling repeats, 4 times, parrot fashion, the mantra’s the PR men have told him to say. To every question asked him his answer is:

• I’m being honest
• Every other country in the World
• Unique Circumstances
• Credit Crunch
• Rising Oil and Food Prices
• We helped Northern Rock
• Tax Rebate next month
• Helping People getting back into work
• Fundamental of Economy Sound

“Who’s going to win Eurovision this year?” “Honestly, every other country in the world has rising oil and food prices, I remember when we helped northern rock I was going to give a tax rebate next month…blah blah blah…I think they should bring back Cliff Richard.”

I do notice that not having a TV makes you more aware of the repetitious Squealer type announcements. Lets break it down a bit:

• I’m being honest – Why do I get jittery when a politician starts with that?
• every other country in the world - Asia seems to be unaffected thus far
• Credit Crunch – buzzword for people at the moment – basically free credit to everyone will eventually bite you on the arse
• Rising Fuel and Oil Prices - didn’t Mr Murdoch say it was morally correct to invade Iraq for a “$20 a barrel oil”?
• We Helped Northern Rock – Nationalising a bank under intense pressure after failing to find it a buyer, placing £1.3 billion more in national debt.
• Tax Rebate next month – What tax rebate? The one where companies can claim back VAT they shouldn’t of paid in the first place because they overpaid?
  Or the rebate to make up for the blunder of not noticing abolition of the 10p tax rate would put the lower paid workers out of pocket?