August 2012 - Page 3 of 3 - Financial Planning in Wimbledon

Paying In Cash And Nothing To Declare?

1960: Morals Squad – Mahon

I’m sorry to go on about this, but avoiding tax is perfectly legal. Politicians lecturing about the morality of paying in cash are displaying a misunderstanding of the law (despite a Law Degree from Oxford). Anyone can pay in cash for anything. The reason most of us don’t is because we don’t carry it around, though research tends to show that those that pay for things with cash are far better at budgeting. I also do not believe that a discount for payment in cash is “morally wrong”. Payments made by credit card or cheque all carry additional charges which are not applied to cash payments. If someone pays cash in order to avoid VAT, then that is illegal. The law is not about morality. The law requires that I pay my tax, which is then used by Government to fund all sorts of things which I may personally find morally dubious – but that is for the electorate to assess at the ballot box.

The issue is whether or not the recipient of the cash declares the money as income (they should). This then forms part of their turnover or revenue. It is perfectly right to then be able to offset the cost of trading against this revenue, the one less the other is what is left (a profit of loss). In Britain we do not tax a loss, we do tax a profit. If this profit is a business, they are subject to corporation tax, if they are an individual (sole trader or partnership) then its personal income tax.

Tax evasion is illegal. In essence tax evasion is breaking the rules and not declaring the relevant income or profit for tax purposes. It is certainly true that there are tax avoiding products available which sail pretty close to the breaking the law and becoming tax evasion. It is the role of HMRC to determine this. There will always be some clever and cunning Accountancy firm etc that attempt to find new ways to avoid tax. It is my belief that a single rate of tax based on and form of income derived from the UK should be taxed in the UK. This would overnight remove the need to search for ways of paying less tax, because it could not be done. This is why I do not believe politicians or HMRC or the Treasury are actually serious about “clamping down” on tax. What they really mean is that they want to appear to do something. Some of the conversations I hear on the radio or read in the press are misguided and based on little but envy. A fair tax is proportionate to all. There is nothing fair about a higher rate of tax. Sorry, but there really isn’t. One person paying more tax than another is irrelevant unless they have identical incomes/gains etc.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Paying In Cash And Nothing To Declare?Dominic2023-12-01T12:22:30+00:00

10 Things The Olympics Teaches Investors – Part 4

1981: Chariots of Fire – Hudson

This is the final part of my 10 point list for investors.

#9.Security

OK, we all know about the chaos that G4S have had with aspects of providing security staff for London 2012. It is a sad reality of life today that we even need security, but we do. The event organisers obviously want both athletes and spectators to enjoy the Games safely. This means spending money on things to reduce the impact of risk, but hope that the expense is actually wasted. We don’t want the security systems to be needed, we don’t want a disaster. Financial planning means also reflecting on the risks that you face to your future. This can be obvious things such as being unable to earn due to illness or loss of a job. These risks need to be identified, quantified and adequately met.

#10.Olympic Tickets

Many people may have been disappointed not to get Olympic tickets. Whilst the system has had its critics, tickets are something that can be traded and can be bought at the right price. Of course you could simply watch your television. Whilst the price of tickets will vary, there is something that each ticket includes. You won’t see it printed on the ticket, but it’s there, it is a factor of the price, at least if the organisers have done their planning properly it will be. The price will include provision for pension benefits. I know you cannot see it, but its there. Much like your airline ticket price, there is an allocation towards the pilot’s pension fund. It’s priced in. One of the most important lessons of financial planning is to pay yourself first, not with what is left over. By pay yourself, I mean set funds aside for your future. Hey, even the Government figured out that it is best to collect tax before you get your hands on your money, otherwise you will spend it (by you I mean the collective you, which includes us all). A financial plan needs to be automatic and properly priced, so that the “sacrifices” you make are largely unseen. We will witness Olympians competing and performing, but we haven’t witnessed the years of training, blood, sweat and tears that went into that moment. Remember that the picture you see is the final edited version, not the full story.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

10 Things The Olympics Teaches Investors – Part 4Dominic2023-12-01T12:22:29+00:00

10 Things The Olympics Teaches Investors – Part 3

1981: Chariots of Fire – Hudson

#7.Inspiration and Perspiration

Sport often has inspirational moments, stories of courage. The Para-Olympics demonstrates this very obviously as the athletes have invariably overcome what many of us may have believed to be defining disabilities. Yet these individuals find the courage and inspiration to use this to their own advantage. Financial planning can often feel overwhelming, the jargon, the disasters, the stress, the constant problems and hurdles that are reported in the media. However keeping to the path, keeping to the programme; applying the discipline, will lead to the results that at times seem far off. It is not all “plain sailing”, there are difficulties and there will be disappointments, but great financial planning is looking at the long-term, the really big story.

#8.Personal Best

Only one person can win the gold medal (unless it is a team event). That’s one. Many will compete, but one will win. The hope of winning gold is illusory in financial planning terms. Your financial plan should be unique to you, not the benchmark for others to pass or fail. It is your life and the only personal best that matters is your own. A great financial plan will be grounded in your values and have very personal, specific goals that you want to achieve. This is your life, it is not a practice. So own the journey as well as the destination. Unlike the Olympics, financial planning actually offers the possibility that everyone wins.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

10 Things The Olympics Teaches Investors – Part 3Dominic2023-12-01T12:22:29+00:00