End this tax lot­tery

Daily Mail - - Money Mail - By Tony Hazell t.hazell@dai­ly­mail.co.uk

WITH less than two weeks to go un­til the Bud­get, in­vestors are pre­par­ing them­selves for an as­sault on cap­i­tal gains. But amid the furore over pro­posed cap­i­tal gains tax changes, or­di­nary savers have been over­looked.

Yes, it is shock­ing that tax rates on gains could rise from 18 pc to 40 pc. Yes, it is wrong that those who have used prop­erty as a pen­sion should find them­selves plunged from one tax regime to an­other.

And yes, it is un­ac­cept­able that in­vestors should be taxed purely on in­fla­tion­ary gains.

But what about the mil­lions who choose to put their money with a bank or build­ing so­ci­ety? Many are earn­ing 1pc or less. They dream of earn­ing enough in­ter­est to keep pace with in­fla­tion.

Yet they are still taxed at their top mar­ginal rate — which can be as high as 50 pc — on the mea­gre amounts they earn.

Many will be pen­sion­ers, des­per­ate for in­come, who can­not af­ford to take a risk with their money. Yet they face a more puni­tive tax regime be­cause they choose to in­vest their money in one way rather than an­other. The same can be said of many who opt for stock mar­ket-linked in­vest­ment bonds sold through bank and build­ing so­ci­ety branches. These peo­ple are tak­ing a real risk with their money be­cause the in­sti­tu­tion un­der­writ­ing the bond may go bust — as some Nor­wich & Peter­bor­ough savers have dis­cov­ered. Yet they too face in­come tax on their prof­its.

This is, of course, money they have saved out of al­ready taxed in­come.

I am not de­fend­ing the CGT changes. In­vestors have suf­fered too of­ten in re­cent years from po­lit­i­cal in­ter­fer­ence and ma­nip­u­la­tion.

But what’s sauce for the goose is sauce for the gan­der. It isn’t just CGT that needs fur­ther con­sid­er­a­tion, but the whole tax regime gov­ern­ing our sav­ings, no mat­ter where we choose to in­vest them.

Mañana, mañana

ABBEY’S cus­tomer ser­vice has been a shambles for more than a decade. Since its takeover by San­tander its prod­uct line has been eye-catch­ing, but when cus­tomers have a prob­lem its be­hav­iour re­mains eye-wa­ter­ingly bad.

In the past ten years or so we have helped mort­gage bor­row­ers who were sad­dled with thou­sands of ex­tra debt due to ‘com­puter er­rors’, be­reaved cus­tomers who were ham­pered by a hope­less pro­bate depart­ment and cash Isa savers whose money van­ished.

No won­der it gained the moniker Shabby Abbey.

With the takeover by Span­ish bank San­tander, we were promised cus­tomer ser­vice would be a pri­or­ity. But for many cus­tomers it’s still the same old story. When it comes to solv­ing their prob­lems, San­tander’s stock an­swer is: ‘ Mañana.’ No­body ex­pects a bank to be per­fect. Mis­takes hap­pen. But it is how cus­tomers are treated when they high­light a prob­lem that de­fines a bank. On this level, San­tander is fail­ing.

How else can it be that cus­tomers whose in­dex is wrongly cal­cu­lated and whose cash Isas are taxed or go missing are forced to con­tact us in such num­bers?

Time and again, Abbey promised to im­prove its cus­tomer ser­vice. Then San­tander, now also the owner of Al­liance & Le­ices­ter and Brad­ford & Bin­g­ley, made sim­i­lar pledges.

Teaser in­ter­est rates may bring cus­tomers in, but if San­tander doesn’t sharpen up its act, no amount of mar­ket­ing can cover up its aw­ful ap­proach to cus­tomer com­plaints.

Bad ex­change

HAV­ING just spent a week in Hun­gary, I re­turn less than im­pressed with the bureau de change in Kens­ing­ton High Street, from where I bought my travel money this year. Among the cur­rency was a bun­dle of 200 forint notes, which — I dis­cov­ered on my ar­rival — have not been le­gal ten­der for a year.

For­tu­nately 200 forints is only worth about 60p — I won­der if I can change them back for some ten bob notes?

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