End of 0845 for tax calls

By the summer, the tax people at HMRC say they will have stopped ripping people off through the use of costly 0845 numbers.

People ringing for tax help using a mobile can pay 41p a minute after dialling 0845. Typically they then have to wait 6 minutes and millions are kept waiting for more than 10 minutes.

From April, calls about Child Benefit - which is now being taken away from high earners -- will be via numbers with the 03 prefix, which is already being used for tax credit enquiries.

03 calls should count as part of inclusive minutes in a phone contract and are charged at the same rate as 01 or 02 numbers.

All customer calls will be switched to the 03 prefix by the "end of the summer" according to HMRC officials who were giving evidence to MPs today.

Here's a useful guide to phone number prefixes.

Waiting to speak to HMRC

The UK's head of tax, Lin Homer, has admitted to MPs that typical telephone waiting times of over 4 minutes do not include the time spent listening to recorded messages, which can be more than 2 minutes.

HM Revenue & Customs is setting itself a new target, from April, of making 80% of people wait no longer than 5 minutes to speak to a real person, including recorded messages.

Lin Homer, chief executive and permanent secretary at HMRC, was answering questions from the Commons Public Accounts Committee, in the wake of a National Audit Office report which calculated that taxpayers were losing £136m a year in call charges and wasted time.

Last year, HMRC failed to answer 26% of calls - or 20 million calls in total. Of the callers who did get through, millions had to wait more than 10 minutes.

Over the winter the proportion of calls not picked up has fallen to around 10%.

Threat of PPI deadline

Bank customers who were mis-sold Payment Protection insurance with loans and credit cards could find that a deadline is imposed to restrict their ability to put in a compensation claim.

The financial watchdog, the FSA, has confirmed that it is considering a request from banks to introduce a time limit on claims for PPI compensation.

But it said in a statement that "Our key priority is to ensure consumers are protected, so the FSA Board would need to be convinced that any proposals would be in the interests of consumers."

It is understood that the British Bankers Association is pushing for a cut-off point in May next year.

Normally, victims of mis-selling can make a claim within 6 years of the event, or within three years of becoming aware of the problem.

Banks have set aside nearly £13bn to pay compensation. The bank of England has warned that the huge sums involved are affecting the banking industry's ability to lend. In exchange for a time limit on claims, banks would fund an advertising campaign to ensure people understood their options.

However, the FSA said there would be no rule change without a full public consultation.

FSA Statement on PPI

The Financial Services Authority (FSA) has been approached by the British Bankers' Association (BBA) to discuss the potential for introducing a time limit for Payment Protection Insurance (PPI) complaints - if the banking industry funded a sufficiently widespread advertising campaign to ensure consumers are aware of the PPI issue and how to complain.

Our key priority is to ensure consumers are protected, so the FSA Board would need to be convinced that any proposals would be in the interests of consumers.

We have had initial discussions and are prepared to consider the merits of this and other options. A key consideration will be the potential to get compensation to more consumers, more quickly.

We will continue to hold discussions with the BBA as well as actively seeking the opinions of consumer groups and other stakeholders.

However, no changes to existing FSA, or future Financial Conduct Authority (FCA), rules would take place without a full public consultation.

Surge in cold weather payments

Cold weather payments are set to surge as a result of the freezing weather engulfing much of the UK.

The Department for Work and Pensions revealed that bitter conditions had already triggered payments to 2 million people over the last week alone, a total of £50m.

They go to those on Pension Credit and several other income-related benefits. Each 7 day period of freezing temperatures results in an automatic £25 addition to benefit to help families keep warm.

The coldest areas this year have been Aviemore, Braemar and Loch Glasgarnoch in the Scottish Highlands, which have each had four 7 day trigger periods.

There have been a number of areas in England which have had qualifying cold spells, including Bingley, Sheffield, Norwich, Nottingham, Bedford and High Wycombe.

And several in Wales have had the money, among them Capel Curig, Lake Vyrnwy and Sennybridge.

However, around 1.5m pensioners are missing out, the result of not claiming Pension Credit even though they are struggling on low incomes.

They need to put in a Pension Credit claim in order to get the cash. The Minister for Pensions Steve Webb said: "I want to ensure the most vulnerable people know about the support that is available."

"With more cold weather expected in the next week people shouldn't have to worry about turning up the heating when temperatures plummet."

Payments so far this winter are behind last year's £129m and well short of 2010-11 which saw £430m disbursed in 17 million payments.

Here's some more info.

Barclays: improve standards or leave

Barclays new chief executive has sent a memo to his 140,000 staff telling them to sign up to a set of ethical standards or go and find work somewhere else.

Antony Jenkins was promoted to the top operational position at the bank after it was rocked by the LIBOR scandal over attempts to rig interest rates.

He told staff: "we must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with our values."

He warned anyone reluctant to toe the line that "Barclays is not the place for you."

Barclays new code of conduct would be based on Respect, Integrity, Service, Excellence and Stewardship.

In contrast Mr Jenkins admitted that banking had become too aggressive and too focused on short-term gain.

He told employees that in Barclays there was "a tendency at times, manifest in all parts of the bank, to pursue short-term profits at the expense of the values and reputation of the organisation."

The bank is training a task force of 1,000 staff to spread the message to other employees over the next few months.

Barclays was the first of several international banks to be implicated in the LIBOR affair. Last June it paid fines of £290m and its then chief executive, Bob Diamond, was later forced to resign.

Mervyn condemns bank bonus ruse

The Governor of the Bank of England, Sir Mervyn King has condemned investment banks in the City of London for considering a delay in bonus payment to avoid 50% top rate tax and take advantage of the cut to 45%.

Giving evidence to MPs in the Treasury Select Committee, Sir Mervyn said it was "depressing" that people who earn so much could consider such a move, "knowing that this must have an impact on the rest of society".

He said it would be "clumsy" and "lacking in care and attention" and pointed out that financial institutions depend on goodwill from the rest of society.

It has been reported that Goldman Sachs and other investment banks have been considering plans to delay bonus payments in the UK to take advantage of the cut in top rate tax which applies from April.

What Mervyn said:
"It's clearly not unlawful. I find it a bit depressing that people who earn so much seem to think that it's
even more exciting to adjust the timing of it to get the benefit of the lower tax rate, knowing this must have an impact on the rest of society, when even now it is the rest of society that is suffering most from the consequences of the financial crisis.

"I think it would be rather clumsy, lacking in care and attention to how other people might be. And in the long run, financial institutions, like all large institutions, do depend on good will and the rest of society. They can't just exist on their own."

Savings rates plummet

It's true: banks and building societies really have been cutting the rates they are prepared to offer to savers, as a result of the government's much-trumpeted Funding for Lending Scheme.

Funding for Lending is supposed to give a boost to lending to homebuyers and businesses, by channelling billions of pounds in cheap money to lenders.

But what that means is that the lenders, in other words banks and building societies, don't have to raise so much from people like you and me trying to build up savings.

Competition has been extinguished.

This has been acknowledged by a senior Bank of England figure, Andrew Bailey (the one who used to sign our banknotes) in evidence to MPs today.

He said "What the introduction of the Funding for Lending Scheme has already shown us is that competition for deposits has eased off quite a bit actually, and that has been reflected in a change in the rate paid on deposits."

He said rates had been going up before the summer as banks competed hard to win our custom, but since then they had eased off.

Of course plenty of you have seen this effect on our High Streets and on internet websites already, and Moneyfacts has highlighted it - here as well.

Benefit cap hits single parents

Highlights of who's affected by the 1% limit on benefit and tax credit increases in 2014-15 and 2015-16, culled from the DWP impact assessment.

Worst hit in cash terms are single parents, who lose £5 a week, or 1% of net income.

Poorest families are hit hardest, the bottom tenth seeing an average £4 a week loss, or 2% of income. It's because they rely more on benefits.

Average loss for the 30% of households who are affected by the cap on increases is £3 a week, or 1% of income.

Just be clear, these households will still receive cash increases in benefit or tax credit income. But the increases will fail to keep pace with price rises, which are expected to be 2.6% and 2.2% in the two years in question.

More pain for savers

Banks and building societies are withdrawing special bonus rates for savers, leaving them struggling to find a decent return for their money.

Savings accounts often come with a first year bonus of around 1%, to add to the normal interest rate, to attract new customers.

But the number of easy access accounts offering bonuses has fallen from 73 to 46 since August last year. The number of notice accounts with bonus rates has more than halved: only 11 remain.

The financial information firm, Moneyfacts, blames the government's new Funding for Lending scheme, which is channelling cheap money to banks to encourage them to lend.

There's already been a drop in the underlying rates of interest on offer to savers.

300,000 in dark on Child Benefit cuts

WHAT'S GONE WRONG?
The first thing to say is that the 300,000 who have had warning letters are still going to be paid their child benefit when the cuts kick in next week.

It's just that they may have to pay it back later, and fill in a tax return so it can be taken back through the tax system.

Here's the situation...

If one of you in the home earns £50,000 or more the tax office will start clawing back any child benefit being claimed. And if you earn over £60,000 they will take it all back.

Revenue and Customs estimate that 1.1m households will be affected.

But they've only written to 800,000 warning them, so 300,000 may not have heard, though the Revenue says they should have seen adverts.

WHAT SHOULD PEOPLE DO ABOUT IT?
If you know you're earning so much you'll never be able to keep your Child Benefit, you can simply opt out and save yourself the trouble of doing extra paperwork in future.

170,000 have done that already. You need to opt out by Sunday night to be sure that you've made a clean break and won't have to enter the benefit in a Self Assessment tax return.

If you're not sure - you can just carry on receiving Child Benefit but the high earner in the household will need to fill in a tax return, declaring the money.

Then it'll be clawed back during the following year, in most cases as part of the monthly tax deduction from wages.

There's plenty of time to fill in the form but there is a deadline. For this tax year, it has to be in by the end of January 2014 if you do it online.

You could be fined if the form doesn't arrive.