Cycle to Work Scheme – Transfer of Ownership

The cycle to work scheme is currently a hugely popular way of enabling employers to offer their employee's the chance of obtaining a tax free bike with most people saving in the region of 40% off the cost of a bicycle and accesories. In return the employee has to enter into a hire agreement with their employees over a set period and repay the cost of the bike (Minus VAT and with tax benefits) in equal monthly payments.

However, HMRC are threatening the very existence of the scheme.

HMRC's rules mean that an employer cannot state to the employee that they will either agree to enter into discussions to transfer the legal ownership of the bike before they sign up to the scheme, thus putting people off the scheme (who is going to want to pay up to a £1,000 for a bike without the guarentee of at least being made an offer to ownership in the future)

Secondly, HMRC state that the employee needs to pay what is known as a ‘fair market value' for the bike and accessories, otherwise further tax implications will apply for the individual concerned. The only problem is that they offer no guidance on how to do this other than that you cannot apply a rate of transfer on bikes across the board.

What instead they propose is that the bike is individually assessed, what this means in practice is that this increases the administrative burden associated with the scheme increasing costs and wasting resources by over complicating the process. They give no guarentee that this complies with their vague ruling thus reducing confidence in the scheme.

By also making the process more complicated and daunting than it needs to be it also makes the scheme less attractive to individuals wanting to sign up which will simply result in less people cycling and only contributing to this country’s huge carbon footprint.

It would be much simpler if a set of nationally agreed guidelines are drafted stating that a bicycle packages’ value after a defined time period is a % figure of the bicycle packages original retail value. This would make the scheme much easier to administer and it would save a enormous amount of time and effort from for organisations administering the scheme. As I say it is not just private sector businesses that run this scheme but public sector organisations too. This is one way government could actually bring about increased efficiency in the public sector.

Why is this idea important?

The cycle to work scheme is currently a hugely popular way of enabling employers to offer their employee's the chance of obtaining a tax free bike with most people saving in the region of 40% off the cost of a bicycle and accesories. In return the employee has to enter into a hire agreement with their employees over a set period and repay the cost of the bike (Minus VAT and with tax benefits) in equal monthly payments.

However, HMRC are threatening the very existence of the scheme.

HMRC's rules mean that an employer cannot state to the employee that they will either agree to enter into discussions to transfer the legal ownership of the bike before they sign up to the scheme, thus putting people off the scheme (who is going to want to pay up to a £1,000 for a bike without the guarentee of at least being made an offer to ownership in the future)

Secondly, HMRC state that the employee needs to pay what is known as a ‘fair market value' for the bike and accessories, otherwise further tax implications will apply for the individual concerned. The only problem is that they offer no guidance on how to do this other than that you cannot apply a rate of transfer on bikes across the board.

What instead they propose is that the bike is individually assessed, what this means in practice is that this increases the administrative burden associated with the scheme increasing costs and wasting resources by over complicating the process. They give no guarentee that this complies with their vague ruling thus reducing confidence in the scheme.

By also making the process more complicated and daunting than it needs to be it also makes the scheme less attractive to individuals wanting to sign up which will simply result in less people cycling and only contributing to this country’s huge carbon footprint.

It would be much simpler if a set of nationally agreed guidelines are drafted stating that a bicycle packages’ value after a defined time period is a % figure of the bicycle packages original retail value. This would make the scheme much easier to administer and it would save a enormous amount of time and effort from for organisations administering the scheme. As I say it is not just private sector businesses that run this scheme but public sector organisations too. This is one way government could actually bring about increased efficiency in the public sector.

Energy companies must pay YOU interest if they hold your money.

Energy companies hold billions of pounds of money of our money.  They are earning profit interest on these holdings.

In the same way that companies can charge interest on outstanding invoices, energy companies should be forced to pay interest on balances on energy accounts (I suggest 5% above BoE base rate)..

Why is this idea important?

Energy companies hold billions of pounds of money of our money.  They are earning profit interest on these holdings.

In the same way that companies can charge interest on outstanding invoices, energy companies should be forced to pay interest on balances on energy accounts (I suggest 5% above BoE base rate)..

Repeal European Communities (Finance) Act 2008

The UK's net contribution to the EU budget – ie the amount we pay in that is above and beyond what we get back in EU grants – is going up.

Over 2007-9 it was in the order of £4.7 billion. That's now rising over 2010-3 to between £6-6.8 billion. That's according to recent official Government statistics.

The principle reason for this change is the 2008 Act of Parliament that put into force the deal Tony Blair reached with other EU leaders.

The extra £2 billion a year to Brussels was the price British taxpayers were supposed to pay in return for massive reform of the disastrous Common Agricultural Policy. But the promises made by the French and others have not been kept.

If you paid for something by mail order and it never got sent, you'd demand a refund.

Given the huge budget cuts that the UK is now facing, we should get this money back.

Why is this idea important?

The UK's net contribution to the EU budget – ie the amount we pay in that is above and beyond what we get back in EU grants – is going up.

Over 2007-9 it was in the order of £4.7 billion. That's now rising over 2010-3 to between £6-6.8 billion. That's according to recent official Government statistics.

The principle reason for this change is the 2008 Act of Parliament that put into force the deal Tony Blair reached with other EU leaders.

The extra £2 billion a year to Brussels was the price British taxpayers were supposed to pay in return for massive reform of the disastrous Common Agricultural Policy. But the promises made by the French and others have not been kept.

If you paid for something by mail order and it never got sent, you'd demand a refund.

Given the huge budget cuts that the UK is now facing, we should get this money back.

Reform of the unfair method used to calculate assumed income applied to savings

For claimants on means tested benefits there is a threshold beyond which savings effect allowance.  This begins at £6,000.  The maximum allowed is £16,000.  Regardless of how much money is actually received, the assumed income from savings is calculated at £1 a week for every £250 (or part thereof) of capital above the £6,000 lower threshold or £2 for anyone on pension credit.  This gives a notional interest rate of 20.8% for anyone not entitled to pension credit.  When has any bank ever paid an interest rate of 20%?  On the upper limit of savings this would give net annual income from interest of £3328 or £64 a week on the full £16,000 or £2080 (£40/week) on the £10,000.

OK there comes a point where savings are of such a level that interest payments go way beyond the benefit entitlement.  And the goverment is not in the business of providing a legacy but it doesn't take very long to get through £10,000 at today's prices and they are, in effect, willing to pay in retrospect for the spendthrift's foreign holidays and sky TV channels.  Why then punish those who have made the effort?

I know that it isn't that long since the figures were revised but that revision didn't go far enough.  There needs to be better correlation between actual and assumed income.  The problem of basing the calculation on actual income would come, of course, from the various and variable interest rates available.  However, using the basic (or even the highest) rate paid by the National Savings Bank – or even the highest paid by the high street banks (currently 6% for the top ISA) as of the beginning of the financial year, would at least allow those responsible citizens gleen some benefit from their husbandry.

Why is this idea important?

For claimants on means tested benefits there is a threshold beyond which savings effect allowance.  This begins at £6,000.  The maximum allowed is £16,000.  Regardless of how much money is actually received, the assumed income from savings is calculated at £1 a week for every £250 (or part thereof) of capital above the £6,000 lower threshold or £2 for anyone on pension credit.  This gives a notional interest rate of 20.8% for anyone not entitled to pension credit.  When has any bank ever paid an interest rate of 20%?  On the upper limit of savings this would give net annual income from interest of £3328 or £64 a week on the full £16,000 or £2080 (£40/week) on the £10,000.

OK there comes a point where savings are of such a level that interest payments go way beyond the benefit entitlement.  And the goverment is not in the business of providing a legacy but it doesn't take very long to get through £10,000 at today's prices and they are, in effect, willing to pay in retrospect for the spendthrift's foreign holidays and sky TV channels.  Why then punish those who have made the effort?

I know that it isn't that long since the figures were revised but that revision didn't go far enough.  There needs to be better correlation between actual and assumed income.  The problem of basing the calculation on actual income would come, of course, from the various and variable interest rates available.  However, using the basic (or even the highest) rate paid by the National Savings Bank – or even the highest paid by the high street banks (currently 6% for the top ISA) as of the beginning of the financial year, would at least allow those responsible citizens gleen some benefit from their husbandry.

Increase Premium Savings Bond Holding

The current maximum holding of £30,000 could and should be increased to say £50,000 per person this would generate much needed cash for the Government to use with a cheap borrowing rate of only 1% (which is used for the cash prizes).

It should also be promoted better…unlike the Lottery you are guaranteed to get your money back!

Why is this idea important?

The current maximum holding of £30,000 could and should be increased to say £50,000 per person this would generate much needed cash for the Government to use with a cheap borrowing rate of only 1% (which is used for the cash prizes).

It should also be promoted better…unlike the Lottery you are guaranteed to get your money back!

Scrap Vehicle Excise Duty (often known as Road Tax)

Get rid of the so called road tax and spread the cost by increasing fuel duty.

That way we end up with an equitable system where by the highest users pay the most and the most frugal and efficient drivers pay the least.

Why is this idea important?

Get rid of the so called road tax and spread the cost by increasing fuel duty.

That way we end up with an equitable system where by the highest users pay the most and the most frugal and efficient drivers pay the least.

Access to Financial Advice – FSA Retail Distribution Review

Withdraw or suspend the FSAs Retail Distribution Review

At a time when the government wants everybody to have less reliance on the state new regulations are proceeding from the previous regime which will deny thousands of lower and averagely paid people access to sound independent financial advice. The regulations are being proposed as a way to increase professionalism among the practioners. However this is just a sop to the extreme consumerist lobby because of a few bad apples historically. The biggest cowboys have been booted out of the industry already. No existing practioner has any argument with wanting to be regarded as a true professional, and those currently practicing, can usually point to many years of adapting to higher standards imposed by the regulator of the day.

The new rules affect mainly independent financial advisers (IFAs) and also direct/tied sales outlets (eg Banks)

The unintended consequences of the rules are many but the most important are as follows:

It is estimated in various media that up to a quarter or even a third of existing advisers, will leave the industry when the rules take effect at the end of 2012. These are mainly advisers in their 50s and 60s who may have an unimpeachable record of giving advice, but are being told that in order to continue to practice they will have to take yet another set of exams of semi-degree standard to 'prove' their professionalism. What incentive is there for them to undertake yet another round of red-tape, box-ticking compliance when they are usually the most experienced people in the industry.

What other profession treats its proven, and most experienced practioners in such a way?

Secondly is the dirty word "commission".

Commission is flawed (but could be mended?) but it has worked for a century. Historically this has always been the way that intermediaries got paid. (Albeit that some in the consumerist lobby think IFAs shoud work for free) The proposal is to ban commission and replace it with customer agreed fees. The problem here is how many people are willing or able to pay fees?

The argument is that commission causes bias and the only reason a product is sold is so the adviser can earn commission. An adviser should be able to expect a reasonable reward for their time and expertise, having trained and been examined to enable them to do the job in the first place. As long as a valid financial need is being dealt with commission serves a useful purpose by enabling customers to get advice without having to get their chequebooks out. Since 1996 commission has been openly disclosed in documentation so that customers can see exactly what the commission amounted to and what effect it had on their investment.

In 2005 the FSA commissioned Charles River Associates to report on commision and intermediary remuneration, which it did via a number of 'mystery shopping' exercises and interviews. It concluded that there was "no evidence of bias being prevalent across the market" and "no evidence of bias to oversell".   Strangely, however the FSA decided that it would ignore its own commisioned report.

Any IFA will tell you that when a customer is offered the choice between the adviser being paid by commission or a fee, overwhelmingly the customer chooses commission. Commission is only a dirty word among those who don't understand it.

IFA businesses are the biggest aid to reducing reliance on state welfare because they advise people how to provide for themselves by saving for the long term and by protecting against loss of life, loss of job, ill health. Without them, people will be reliant on the state for such benefits, because few are motivated to do these things for themselves without advice.

The FSA seem to favour banks over IFAs. However we have seen what happens with the banks when corporate greed is more important than customer care. The Financial Ombudsman's own statistics show that more than 90% of all complaints it gets are in relation to banks, only a very small proportion in relation to IFAs.

The government have said that they will provide access to free financial advice but have yet to detail how that will work. Will the 'advisers' be fully qualified? How will they get paid? Who pays? What will be the scope of their advice?

Wouldn't it be better to encourage financial advice through experienced advisers rather than re-invent the wheel or restrict it to a financial elite?

There are other ways of ensuring protection for the consumer. Removing the perfect solution from the industry is not one of them

Allow experienced advisers to continue and allow commission to continue. The simple result without doubt will be that less people will be financially dependent on the state.

Why is this idea important?

Withdraw or suspend the FSAs Retail Distribution Review

At a time when the government wants everybody to have less reliance on the state new regulations are proceeding from the previous regime which will deny thousands of lower and averagely paid people access to sound independent financial advice. The regulations are being proposed as a way to increase professionalism among the practioners. However this is just a sop to the extreme consumerist lobby because of a few bad apples historically. The biggest cowboys have been booted out of the industry already. No existing practioner has any argument with wanting to be regarded as a true professional, and those currently practicing, can usually point to many years of adapting to higher standards imposed by the regulator of the day.

The new rules affect mainly independent financial advisers (IFAs) and also direct/tied sales outlets (eg Banks)

The unintended consequences of the rules are many but the most important are as follows:

It is estimated in various media that up to a quarter or even a third of existing advisers, will leave the industry when the rules take effect at the end of 2012. These are mainly advisers in their 50s and 60s who may have an unimpeachable record of giving advice, but are being told that in order to continue to practice they will have to take yet another set of exams of semi-degree standard to 'prove' their professionalism. What incentive is there for them to undertake yet another round of red-tape, box-ticking compliance when they are usually the most experienced people in the industry.

What other profession treats its proven, and most experienced practioners in such a way?

Secondly is the dirty word "commission".

Commission is flawed (but could be mended?) but it has worked for a century. Historically this has always been the way that intermediaries got paid. (Albeit that some in the consumerist lobby think IFAs shoud work for free) The proposal is to ban commission and replace it with customer agreed fees. The problem here is how many people are willing or able to pay fees?

The argument is that commission causes bias and the only reason a product is sold is so the adviser can earn commission. An adviser should be able to expect a reasonable reward for their time and expertise, having trained and been examined to enable them to do the job in the first place. As long as a valid financial need is being dealt with commission serves a useful purpose by enabling customers to get advice without having to get their chequebooks out. Since 1996 commission has been openly disclosed in documentation so that customers can see exactly what the commission amounted to and what effect it had on their investment.

In 2005 the FSA commissioned Charles River Associates to report on commision and intermediary remuneration, which it did via a number of 'mystery shopping' exercises and interviews. It concluded that there was "no evidence of bias being prevalent across the market" and "no evidence of bias to oversell".   Strangely, however the FSA decided that it would ignore its own commisioned report.

Any IFA will tell you that when a customer is offered the choice between the adviser being paid by commission or a fee, overwhelmingly the customer chooses commission. Commission is only a dirty word among those who don't understand it.

IFA businesses are the biggest aid to reducing reliance on state welfare because they advise people how to provide for themselves by saving for the long term and by protecting against loss of life, loss of job, ill health. Without them, people will be reliant on the state for such benefits, because few are motivated to do these things for themselves without advice.

The FSA seem to favour banks over IFAs. However we have seen what happens with the banks when corporate greed is more important than customer care. The Financial Ombudsman's own statistics show that more than 90% of all complaints it gets are in relation to banks, only a very small proportion in relation to IFAs.

The government have said that they will provide access to free financial advice but have yet to detail how that will work. Will the 'advisers' be fully qualified? How will they get paid? Who pays? What will be the scope of their advice?

Wouldn't it be better to encourage financial advice through experienced advisers rather than re-invent the wheel or restrict it to a financial elite?

There are other ways of ensuring protection for the consumer. Removing the perfect solution from the industry is not one of them

Allow experienced advisers to continue and allow commission to continue. The simple result without doubt will be that less people will be financially dependent on the state.

Remove road tax

My thoughts are to remove the road tax law/scheme and replace this with additional tax at the petrol station.

Why?

Those who use the roads more or have vehicles that consume more fuel pay a greater percentage for its up-keep.

This is a fairer system.

 

Why is this idea important?

My thoughts are to remove the road tax law/scheme and replace this with additional tax at the petrol station.

Why?

Those who use the roads more or have vehicles that consume more fuel pay a greater percentage for its up-keep.

This is a fairer system.

 

Replace ISAs

ISAs are a good concept but terribly executed. It takes me a half-hour to open an ISA (and thus a half-hour for the bank clerk too) and moving to a new ISA prov ider is also very time-consuming so people tend to stay with their current provider who is thus tempted to provide awful interest rates.

The purpose of ISAs is to encourage people to save by giving them an interest-free allowance of 5,100 pounds each year, cumulating each year if they save each year.

Outsourcing the administration of this concept to banks and building societies has not been a success. The whole ISA system should be replaced by a government-administered system. Ideally, include the "ISA allowance" in the tax return system. As a second best, scrap commercial ISAs and implement a central ISA-like system within National Savings

Why is this idea important?

ISAs are a good concept but terribly executed. It takes me a half-hour to open an ISA (and thus a half-hour for the bank clerk too) and moving to a new ISA prov ider is also very time-consuming so people tend to stay with their current provider who is thus tempted to provide awful interest rates.

The purpose of ISAs is to encourage people to save by giving them an interest-free allowance of 5,100 pounds each year, cumulating each year if they save each year.

Outsourcing the administration of this concept to banks and building societies has not been a success. The whole ISA system should be replaced by a government-administered system. Ideally, include the "ISA allowance" in the tax return system. As a second best, scrap commercial ISAs and implement a central ISA-like system within National Savings

Stop Road Tax

Remove road tax and add the necessary revenue shortfall to petrol duty.

Benefits:

– Petrol is naturally 'progressive' (to use this weeks popular token).

– We will be able to remove the departments that currently manage the road tax process including the road tax evasion group (and their spy vans).

– We will reduce the overhead on the police

– We will be able to stop the very unadvisable adverts that talk about crushing people's property (not a good example for the state to set).

– Lets face it, in today's digital world sticking a bit of paper on your car is very dated. We can already chack insurance and MOT compliance on-line so it adds no value there either.

Finally, petrol station receipts need to show the petrol cost and the break down of duties paid. This will add transparency any allow us to keep an eye on the government's expenditure. All very healthy.

Lets just do it.

Why is this idea important?

Remove road tax and add the necessary revenue shortfall to petrol duty.

Benefits:

– Petrol is naturally 'progressive' (to use this weeks popular token).

– We will be able to remove the departments that currently manage the road tax process including the road tax evasion group (and their spy vans).

– We will reduce the overhead on the police

– We will be able to stop the very unadvisable adverts that talk about crushing people's property (not a good example for the state to set).

– Lets face it, in today's digital world sticking a bit of paper on your car is very dated. We can already chack insurance and MOT compliance on-line so it adds no value there either.

Finally, petrol station receipts need to show the petrol cost and the break down of duties paid. This will add transparency any allow us to keep an eye on the government's expenditure. All very healthy.

Lets just do it.