Foreign Perspectives

Archive for June, 2009

Since the economy has taken something of a dive there are a lot more people around these days who are overpaying on their taxes, typically this can happen if your income this year is a lot less than last year but there are a variety of other reasons why you can end up with a tax bill that’s lots more than you were expecting.

Sometimes the biggest surprise is in terms of back taxes. Although you’d think that these can’t be much, it’s surprising just how large a bill you can get from this quarter. For instance, often seemingly small omissions can amount to quite serious amounts of cash owed if they’re over a number of years. This tax debt can even reach such levels that you need to look into the options of paying it off in installments which at least could reduce the payments to more manageable amounts.

On the other side of the coin people can also find that there are quite substantial tax reliefs which they’ve not claimed. You might think that if you’ve an accountant that this just can’t happen to you but, in most cases, the accountant doesn’t get out to actually see what you’re getting up to and you could be pleasantly surprised if they’ve completely overlooked an ongoing tax relief. Just as in the case of underpayments, missing out on relatively small amounts of tax relief can add up to a sizeable chunk of cash when counted over a few years.

Whether it’s over or under payments that affect you, it’s best to do something about them rather than taking the head in the sand approach that many people adopt when thinking about taxes.

Strangely enough, it might not be where you think.

Typically most people will move their money into cash savings in times like these and put those cash savings in a local savings institution on the basis that they know and trust the people in the branch. However, that’s a fatal error to make. Sure, you can trust the people in your local bank or building society branch with your cash but the problem is that they aren’t the people who’ll be investing that cash.

That’s how come Northern Rock created such a stir last year: it was very much trusted locally and indeed was well thought of generally too for that matter. However, what felled it was the way in which the financial wizards at HQ invested the money and pulled in more money to fund mortgages.

In fact, the safest place at the moment is one that’s commonly overlooked. It’s National Savings in the UK. That’s part of HM Treasury and it’s the one UK financial instution that can’t go bankrupt because they’re the people that create the money in the first place. No, interest rates with them aren’t as high as with other places but then interest rates aren’t that great at the moment anywhere and these days it’s safety that you should be looking towards.

One of the problems with the Open University is that up until a year ago they put out a prospectus giving about a paragraph on each of the courses which they run and you’re talking about hundreds of courses over dozens of different subject areas.

Net effect is that I found it very easy to find loads of courses that I’d potentially be interested in over the years but ’twas only a year ago that I finally got around to sitting down and working out a rough masterplan containing all the courses that I might be interested in doing at some point along with a pathway through the resulting maze of courses. Something of a crazy waste of time really as to do all of those on the list would take decades by which time a great deal of them would have long since been replaced by more up to date versions or perhaps completely different ones altogether. That said, it was a useful exercise in working out the medium term sequencing of the courses as there’s mix of February/October and October/June cycle courses and changing between one cycle and the other is something that you don’t want to be doing terribly often.

Anyway, I am technically on the very first of those courses right now (ED209 Child Development) and already there’s a course change in the overall route. What’s happened is that as a result of looking in more detail about the requirements of the courses coming up means that it’s useful to add a completely new course (SK277 Human Biology) into the medium term schedule in order to make it easier to do one that I’ll be getting to in several years time (SD226 Biological Psychology).

That leaves the medium term timetable looking like this:

• October 2009 SK277, Human Biology because that’ll make SD226 (Biological Psychology) a whole lot more doable and because it seems like a fascinating course in its own right;
• October 2010 DSE212, Exploring Psychology which is the psychology course that I really should have done first (along with DXR222, the associated residential);
• September 2011 A251, World Archaeology because it sounds dead interesting and I’ll need 30 points later on;
• January 2012 MST121, Using Mathematics because I need to get my maths back onstream for…
• October 2012 S207, The Physical World and SXR207, the associated residential

Eh? Where did World Archaelogy come from? That’s from my prospectus browsing. Although it’s completely unrelated to everything else I’m currently planning on doing it sounds like a really interesting course.

Where did the maths and physic courses come from? Aren’t you doing a psychology degree? Well, I have a whole host of physics courses on my masterplan simply because they sound fascinating and S207 is the first taster of those. After that I will have completed my October start sequence of courses and that’s when I’ll decide whether to complete the psychology degree or the physics degree first (long term I’ll probably do both). Thus although the course that follows it will definitely be DSE232 Applying Psychology (because it’s a September start and only runs for a few months) the one after that will be either DD307 Social Psychology or MS221 Exploring Mathematics depending on which route I choose at that point.

That brings up an issue that hasn’t arisen before in the form of enabling courses. Although I’m aiming for a physics degree that requires a fair number of maths course to enable me to do the various physics courses and they generally need to be done in a particular sequence.

There’s also the matter of a number of courses I quite fancy that I can’t see me doing a particular degree in. For instance, A207 From Enlightenment to Romanticism c.1780-1830 seems quite interesting and I’ve even read one of the recommended texts for it. Surprisingly S104 Exploring Science, although brilliant by all accounts, is one that I have provisionally dropped from my masterplan on the basis that I don’t seem to need to do it although I might revise that opinion after I’ve done the biology course. And, of course, there’s the MSc in psychology that I’d quite like to do too at some point not to mention the Creative Arts degree that sounds like fun. Still, for the moment I think I’ll just potter along through my medium term plan….

It’s usually taken as read that an accountancy job is a job for life but these days that’s no longer the case and that there is such a thing a specialist accountancy recruitment agency should be no surprise to anyone.

The particular difficult with accountants is that there can frequently be tie-in, no-competition and no conflict of interest terms in their employment contract. So, it’s not quite so easy to move jobs or to find a new accountancy job even in normal times as it is with “normal” jobs and, of course, these are far from normal times so it’s that much more difficult these days.

That said, if you’re searching for, say, “accountant jobs Edinburgh” you will find jobs around with some of those at quite surprisingly high levels. What you will see though, courtesy of the contract restrictions above and, of course, non-disclosure that there’s very little meat to the job descriptions and you’ll usually need to formally contact the employment agency to find out more should you be attracted to one of those on offer. In many ways that’s something of a nuisance but unfortunately it’s something that isn’t easily avoided.

So, if you fancy being a qualified accountant in Edinburgh there are definitely possibilities, just allow for needing to contact the agency rather than relying on information on the website listings.

In eras of normal economic activity there are always rumours that come true. That interest rates will fall (or rise), that the chancellor is on his way out (or not) and so on. However, it’s more of a problem in times like these.

For example, the West Bromwich building society was rumoured to be about to need a rescue package back in May. In fact, that hasn’t happened and may never happen, yet I’m quite sure that more than a few depositors with the society withdrew cash whilst other potential depositors probably decided on a different building society. So far that’s been “a few” depositors or potential depositors but it could very easily become a tide and fell the society just as happened with the Northern Rock.

And yet, we also get rumours in the other direction. Thus the markets don’t seem in such dire straits lately as they were not so long ago. The flow of companies announcing bankruptcies seems to be slowing (no substantial companies for a while now) and even the housing market may be in the first stages of an upturn.

The problem isn’t the rumours as such but rather that in dire economic times the effect of such rumours tends to be much more extreme than would normally be the case. That’s, of course, why the government tend to be somewhat more reluctant to say anything as it’s extremely easy for an off the cuff comment to be perceived as negative these days. Still, we’re sure to have a new government soon, aren’t we? Or is that just a rumour too?