Category Archives: Business

Amazon and eBay warned by MPs about VAT fraudsters

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Amazon and eBay are profiting from sellers who defraud UK taxpayers by failing to charge VAT, according to a report by MPs.

The report estimates up to £1.5bn has been lost from third-party sellers on online marketplaces not charging the tax on sales they make in the UK.

MPs in the Public Accounts Committee criticised HMRC for being “too cautious” in pursuing the “fraudsters”.

Amazon and eBay said they were working with HMRC on the issue.

Labour MP Meg Hillier, who chairs the committee, called online VAT fraud “hugely damaging” for British businesses and taxpayers.

She added that “the response of HMRC and the marketplaces where fraudsters operate has been dismal”.

‘Bewildering’

The fraud has increased because foreign firms selling goods to UK shoppers – usually via online marketplaces like Amazon and eBay – are keeping some of their stock in UK warehouses to provide next day delivery.

If items are dispatched from UK soil, the sellers have to charge VAT at 20%.

But many have not been, so undercutting genuine UK suppliers and reducing tax revenue, the committee’s report found.

Brexit will make the issue more complicated because of uncertainty over trading and customs, it added.

Both Amazon and eBay told the committee they took action to remove “bad actors” from their sites.

But the report said it was “bewildering that these big companies have taken such little action to date”.

It added that Amazon and eBay, amongst other online marketplaces, “continue to profit from fraudulent activities taking place on their sites” by charging the sellers a commission.

In the hearings a pack of lightbulb socket converters and a hose for a Dyson vacuum cleaner were held up as examples of products sold without VAT.

‘Above and beyond’

The report’s conclusions include:

  • The UK’s tax agency, HMRC, should set up an agreement with online marketplaces by March next year to tackle the issue
  • The websites should require non-EU sellers – which dispatch goods already in the UK – to provide a valid VAT number
  • HMRC should “inject more urgency” by making more extensive use of its existing powers

HMRC said it had introduced new rules last year to hold online marketplaces liable for unpaid VAT by overseas sellers, leading to a ten-fold rise in the number of sellers registering for VAT.

“The new reforms will secure an extra £875m in tax to help pay for vital public services,” an HMRC spokesman said.

In a statement Amazon said it was reviewing the report and supported efforts to ensure sellers across all marketplaces were VAT compliant.

An eBay spokesperson said it was going “above and beyond” HMRC’s requirements to provide a “fair marketplace for all our buyers and sellers”.

Amazon and eBay ‘profit from VAT evasion’

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Amazon and eBay have defended themselves as a report by MPs accuses online marketplaces of profiting from VAT evasion.

The Public Accounts Committee was particularly scathing of the taxman, saying HM Revenue & Customs (HMRC) had failed to get to grips with the scale of fraud, carried out by non-EU sellers on such sites.

Its report said the traders’ fast-growing and “illegal” practice of failing to charge customers VAT on goods housed in the UK was anti-competitive as it allowed them to undercut rivals by at least the 20% tax rate – putting UK retail staff out of their jobs.

It said the online platforms hosting the sellers were making more money than they should as they were raking-in commissions on sales that should have been blocked.

Image:Amazon says it removes any seller UK authorities say is non-VAT compliant

The committee described HMRC’s estimate of an annual loss to the public purse of up to £1.5bn as “out of date and flawed” and hit out at its failure to bring any prosecutions under new enforcement powers.

It urged officials to ensure, by March next year, that online platforms had imposed greater VAT controls on non-EU traders – with Brexit likely to exacerbate the problem as new trade arrangements become clearer.

PAC chair, Meg Hillier, said: “HMRC needs to be far tougher in protecting the interests of British businesses and taxpayers.

Image:Ebay argues it has gone beyond UK requirements in ensuring VAT compliance

“As a priority it must inject more urgency into enforcement action. But it should also push the case for further new powers.

“Online marketplaces tell us they are committed to removing ‘bad actors’, yet that sentiment rings hollow when those same marketplaces continue to profit from the actions of rogue traders.

“They can and should do more to drive them out and we will expect online marketplaces to co-operate fully with HMRC in tackling non-compliance.”

An eBay spokesman said: “We want a fair marketplace for all our buyers and sellers.

“That’s why we have been working together with HMRC – and going above and beyond their requirements – to continue to ensure that our site is the best possible place to do business.”

An Amazon spokesman responded: “We are reviewing the committee’s recommendations and support efforts to ensure businesses and individuals selling across all marketplaces are VAT compliant.

“We offer extensive information, training and tools to assist sellers in their VAT obligations, and we work closely with HMRC on this matter sharing all requested data on non-EU sellers and promptly removing any seller they inform us is not VAT compliant.”

An HMRC spokesman said: “The UK has led the way in holding online marketplaces jointly liable for VAT evaded overseas.

“We introduced tough new rules last year allowing us to hold online marketplaces liable for unpaid VAT by overseas sellers and since then we have seen a ten-fold rise in the number of sellers registering for VAT.

“The new reforms will secure an extra £875m in tax to help pay for vital public services.”

Amber Rudd calls Brexit without a deal ‘unthinkable’

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The prospect of Brexit happening without any deal being reached between the UK and the EU is “unthinkable”, Home Secretary Amber Rudd has said.

Ms Rudd was responding to a question about the impact on security of nothing being agreed before the UK leaves.

“We will make sure there is something between them and us to maintain our security,” she assured MPs.

Earlier Brexit Secretary David Davis defended keeping the “no deal” option open in the on-going negotiations.

After five rounds of Brexit negotiations, the EU has described the talks as in “deadlock” and there has been an increased debate about the possibility of the UK leaving without a deal in place.

One of the UK’s aims is for a new security treaty with the EU, and Ms Rudd told the Commons Home Affairs Committee contingency plans were being made in case this was not in place by the UK’s departure in March 2019.

Asked whether, if there was “no deal of any form”, Britain would be as safe and secure as it currently is, she replied: “I think it is unthinkable there would be no deal.

“It is so much in their interests as well as ours – in their communities’, families’, tourists’ interests to have something in place.”

Ms Rudd also said it was “unthinkable” EU citizens would be asked to leave the UK after Brexit, but was unable to offer guarantees while negotiations continue.

Mr Davis was asked about a “no deal” scenario as he updated MPs on Monday’s dinner between Theresa May and EU officials.

Reaching agreement with the EU is “by far and away the best option” he said, adding: “The maintenance of the option of no deal is for both negotiating reasons and sensible security – any government doing its job properly will do that.”

International Trade Secretary Liam Fox said there was no reason to fear the impact on the economy of no deal being agreed, saying it “would not be the Armageddon that people project”.

He told the BBC: “I think that we need to concentrate on the realities, get rid of the hyperbole around the debate and focus on the fact that if we can get a good agreement with the EU, both Britain and the EU would be better off for it.”

‘First step’

A UK-EU free trade deal cannot be discussed until the EU deems sufficient progress has been made on other matters and gives the green light.

In his statement to MPs, Mr Davis said the UK was “reaching the limits of what we can achieve” in Brexit talks without moving on to talk about trade.

He urged EU leaders to give counterpart Michel Barnier the green light at this week’s EU summit to begin trade talks.

Mr Barnier said he wanted to speed up talks but “it takes two to accelerate”.

This was a reference to comments made by Mrs May after her dinner with the EU’s chief negotiator, in which she said the two sides had agreed on the need to “accelerate” the process.

Speaking on Tuesday, Mr Barnier said a “constructive dynamic” was needed over the next two months but “there was a lot of work to do” and issues must be tackled in the “right order”.

“At the moment we are still not yet at the first step which is securing citizen rights, guaranteeing the long term success of the good Friday agreement and finalising the accounts,” he said.

The talks – which were held as EU member states prepare to assess progress so far on Thursday – were said to be “constructive and friendly” but the UK’s financial settlement with the EU continues to be a sticking point and the EU will not discuss trade until this has been settled.

Along with the UK’s “divorce bill”, the EU is insisting agreement be reached on citizens’ rights and what happens on the Northern Ireland border before agreeing to open talks on the free trade deal Mrs May’s government wants to strike.

In his Commons statement, Mr Davis urged the EU to give Mr Barnier a mandate to start discussing its future relations with the UK, including trade and defence, telling MPs he was “ready to move the negotiations on”.

He suggested the UK was “reaching the limits of what we can achieve without consideration of the future relationship”.

“Our aim remains to provide as much certainty to business and citizens on both sides. To fully provide that certainty, we must be able to talk about the future.”

‘Right path’

On citizens’ rights, he said key issues such as the rules on family reunion, the right to return, the onward movement of British expats in Europe and the right of EU residents to export benefits had still to be settled.

Announcing that EU citizens who currently have permanent residence in the UK would not have to go through the full process of re-applying before Brexit, he said the UK had consistently “gone further and provided more certainty” on their status than the EU had done.

While the UK had “some way to secure the new partnership with the EU”, he was “confident we are on the right path”.

Speaking in the Commons earlier on Tuesday, Foreign Secretary Boris Johnson said he thought a reported bill of £100bn was too high and urged the EU to “get serious” and agree to settle the citizens’ rights question.

For Labour, shadow Brexit secretary Sir Keir Starmer said EU and UK citizens were still no wiser over their future while it “appeared the deadlock over the financial settlement is such that the two sides are barely talking”.

“Nobody should underestimate the seriousness of the situation we find ourselves in. At the first hurdle, the government has failed to hit a very important target.”

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Sainsbury’s to cut up to 2,000 administrative jobs

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Sainsbury’s has said it will cut up to 2,000 jobs from its human resources staff.

The chain, which is the UK’s second biggest supermarket, says the “difficult decision” is part of a plan to cut £500m from its costs.

The restructuring will affect roles in stores, as well as in the company’s central offices.

It plans to make 1,400 payroll and HR clerks redundant and other changes could see another 600 posts removed.

The majority of the headcount losses will be from within the stores.

The 600 roles on which the group is consulting are predominantly HR roles across the supermarket chain, its newly acquired Argos chain, as well as Sainsbury’s bank.

Sainsbury’s also owns Habitat, and employs nearly 200,000 people in total.

It said it would offer affected staff alternative roles wherever possible, or redundancy packages.

UK inflation at highest since April 2012

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The UK’s key inflation rate hit its highest for more than five years in September, driven up by increases in transport and food prices.

The Consumer Prices Index (CPI) climbed to 3%, a level it last reached in April 2012, and up from 2.9% in August.

The pick-up in inflation raises the likelihood of an increase in interest rates – currently 0.25% – next month.

The figures are significant because state pension payments from April 2018 will rise in line with September’s CPI.

Under the “triple lock” guarantee, the basic state pension rises by a rate equal to September’s CPI rate, earnings growth or 2.5%, whichever is the greatest.

At the moment, the full new state pension is £159.55 per week, equivalent to £8,296.60 per year.

Business rates will go up by September’s Retail Prices Index (RPI) of 3.9%.

The fall in the pound since last year’s Brexit vote has been one factor behind the rise in the inflation rate, as the cost of imported goods has risen.

ONS head of inflation Mike Prestwood said: “Food prices and a range of transport costs helped to push up inflation in September. These effects were partly offset by clothing prices that rose less strongly than this time last year.”


Analysis: Kamal Ahmed, economics editor

Inflation has hit a five year high and is now 0.9% above the rate of wage growth – meaning that the incomes squeeze is becoming tighter.

And if you are employed in the public sector – where pay rises are capped at 1% – or rely on benefits – which are frozen – that squeeze is even tighter.

With poor economic growth figures and uncertainty over the Brexit process, the Bank of England’s decision on whether to raise interest rates next month is finely balanced.

Yes, “price stability” is the main purpose of the Bank of England’s monetary policy committee which makes the decision.

But many believe that inflation may now have peaked as the effects of sterling’s depreciation following the referendum dissipate.

An interest rate rise now, which increases prices for millions of mortgage holders and could dampen economic activity, could be just the medicine the economy doesn’t need.


The Bank of England is tasked with keeping CPI inflation at 2%, and last month its governor, Mark Carney, indicated interest rates could rise in the “relatively near term” if the economy continued on its current path.

The governor of the Bank of England has to write a letter of explanation to the chancellor if the inflation rate is more than 1% either side of the 2% target.

On Tuesday, Mr Carney told MPs on the Treasury Committee that “inflation rising potentially above the 3% level in the coming months is something we have anticipated”, because of the fall in the value of the pound.

He said he expected inflation to peak in October or November, and at that point he thought it would be “more likely than not that I would be writing on behalf of the Monetary Policy Committee (MPC) a letter to the chancellor.”

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The tick upwards in inflation will increase expectations of a rate rise from the Bank of England later on this year, stoked by a flurry of hawkish rhetoric coming from Threadneedle Street.”

However, he added, it is not a foregone conclusion, “so it’s probably best not to count those chickens until they’re hatched”.

Suren Thiru, head of economics at the British Chambers of Commerce, said the Bank of England’s policymakers “should resist the temptation to raise interest rates, particularly during this period of heightened political uncertainty”.

“Raising rates before the UK economy is ready risks undermining consumer and business confidence, weakening the UK growth prospects further,” he said.


Analysis: Brian Milligan, personal finance reporter

Pensioners will be celebrating again. Today’s CPI inflation figure means they will get a 3% rise next April, their largest pension increase for six years.

Those on the new state pension will see their weekly income rise to £164.

Compare that to workers, who’ve seen their earnings rise by 2.1% over the last year.

This is all thanks to the triple lock, which sees the state pension rise by the highest of earnings, prices or 2.5%.

Food for thought for the chancellor, perhaps, who’s reported to be considering tax concessions for younger people in his forthcoming budget, to even-up the inter-generational unfairness that the triple lock has contributed to.

The 2.5% element of the triple lock is due to be dropped in 2021.


UK inflation at highest since April 2012

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The UK’s key inflation rate hit its highest for more than five years in September, driven up by increases in transport and food prices.

The Consumer Prices Index (CPI) climbed to 3%, a level it last reached in April 2012, and up from 2.9% in August.

The pick-up in inflation raises the likelihood of an increase in interest rates – currently 0.25% – next month.

The figures are significant because state pension payments from April 2018 will rise in line with September’s CPI.

Under the “triple lock” guarantee, the basic state pension rises by a rate equal to September’s CPI rate, earnings growth or 2.5%, whichever is the greatest.

At the moment, the full new state pension is £159.55 per week, equivalent to £8,296.60 per year.

Business rates will go up by September’s Retail Prices Index (RPI) of 3.9%.

The fall in the pound since last year’s Brexit vote has been one factor behind the rise in the inflation rate, as the cost of imported goods has risen.

ONS head of inflation Mike Prestwood said: “Food prices and a range of transport costs helped to push up inflation in September. These effects were partly offset by clothing prices that rose less strongly than this time last year.”


Analysis: Kamal Ahmed, economics editor

Inflation has hit a five year high and is now 0.9% above the rate of wage growth – meaning that the incomes squeeze is becoming tighter.

And if you are employed in the public sector – where pay rises are capped at 1% – or rely on benefits – which are frozen – that squeeze is even tighter.

With poor economic growth figures and uncertainty over the Brexit process, the Bank of England’s decision on whether to raise interest rates next month is finely balanced.

Yes, “price stability” is the main purpose of the Bank of England’s monetary policy committee which makes the decision.

But many believe that inflation may now have peaked as the effects of sterling’s depreciation following the referendum dissipate.

An interest rate rise now, which increases prices for millions of mortgage holders and could dampen economic activity, could be just the medicine the economy doesn’t need.


The Bank of England is tasked with keeping CPI inflation at 2%, and last month its governor, Mark Carney, indicated interest rates could rise in the “relatively near term” if the economy continued on its current path.

The governor of the Bank of England has to write a letter of explanation to the chancellor if the inflation rate is more than 1% either side of the 2% target.

On Tuesday, Mr Carney told MPs on the Treasury Committee that “inflation rising potentially above the 3% level in the coming months is something we have anticipated”, because of the fall in the value of the pound.

He said he expected inflation to peak in October or November, and at that point he thought it would be “more likely than not that I would be writing on behalf of the Monetary Policy Committee (MPC) a letter to the chancellor.”

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The tick upwards in inflation will increase expectations of a rate rise from the Bank of England later on this year, stoked by a flurry of hawkish rhetoric coming from Threadneedle Street.”

However, he added, it is not a foregone conclusion, “so it’s probably best not to count those chickens until they’re hatched”.

Suren Thiru, head of economics at the British Chambers of Commerce, said the Bank of England’s policymakers “should resist the temptation to raise interest rates, particularly during this period of heightened political uncertainty”.

“Raising rates before the UK economy is ready risks undermining consumer and business confidence, weakening the UK growth prospects further,” he said.


Analysis: Brian Milligan, personal finance reporter

Pensioners will be celebrating again. Today’s CPI inflation figure means they will get a 3% rise next April, their largest pension increase for six years.

Those on the new state pension will see their weekly income rise to £164.

Compare that to workers, who’ve seen their earnings rise by 2.1% over the last year.

This is all thanks to the triple lock, which sees the state pension rise by the highest of earnings, prices or 2.5%.

Food for thought for the chancellor, perhaps, who’s reported to be considering tax concessions for younger people in his forthcoming budget, to even-up the inter-generational unfairness that the triple lock has contributed to.

The 2.5% element of the triple lock is due to be dropped in 2021.


MI5 boss Andrew Parker warns of ‘intense’ terror threat

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The UK’s intelligence services are facing an “intense” challenge from terrorism, the head of MI5 has warned.

Andrew Parker said there was currently “more terrorist activity coming at us, more quickly” and that it can also be “harder to detect”.

The UK has suffered five terror attacks this year, and he said MI5 staff had been “deeply affected” by them.

He added that more than 130 Britons who travelled to Iraq and Syria to fight with so-called Islamic State had died.

Speaking in London, Mr Parker said the tempo of counter-terrorism operations was the highest he had seen in his 34-year career at MI5.

Twenty attacks had been foiled in the last four years, including seven in the last seven months, he added.

All were related to what he called Islamist extremism.

The five that got through this year included attacks in Manchester and London.

In some cases, individuals like Khuram Butt – who was behind the London Bridge attack – were well known to MI5 and had been under investigation by the security services.

Mr Parker said that when an attack does happen, staff at MI5 were deeply affected on a personal and professional level.

“They are constantly making tough professional judgements based on fragments of intelligence; pinpricks of light against a dark and shifting canvas.”

In the wake of the attacks, there had been some, including some in the Home Office, who questioned whether the counter-terrorist machine – featuring all three intelligence agencies and the police, and with MI5 at its heart – was functioning as effectively as previously thought.

Mr Parker said they were trying to “squeeze every drop of learning” from recent incidents.

However, there was no indication of a fundamental change in direction in his remarks, with a focus on the scale of the threat making stopping all plots impossible.

“We have to be careful that we do not find ourselves held to some kind of perfect standard of 100%, because that is not achievable,” he said.

“Attacks can sometimes accelerate from inception through planning to action in just a handful of days.

“This pace, together with the way extremists can exploit safe spaces online, can make threats harder to detect and give us a smaller window to intervene.”

‘Not the enemy’

He renewed the call for more co-operation from technology companies.

Technology was “not the enemy,” he added, but said companies had a responsibility to deal with the side effects and “dark edges” created by the products they produced.

In particular, he pointed to online purchasing of goods – such as chemicals – as well as the presence of extremist content on social media and encrypted communications.

He said more than 800 individuals had left the UK for Syria and Iraq.

Some had then returned, often many years ago, and had been subject to risk assessment. Mr Parker revealed at least 130 had been killed in conflict.

Fewer than expected had returned recently, he said, adding that those who were still in Syria and Iraq may not now attempt to come back because they knew they might be arrested.

Mr Parker stressed that international co-operation remained vital and revealed there was a joint operational centre for counter-terrorism based in the Netherlands, where security service officers from a range of countries worked together and shared data.

This had led to 12 arrests in Europe, he added.

In terms of state threats, Mr Parker said the range of clandestine activity conducted by foreign states – including Russia – went from aggressive cyber-attack, through to traditional espionage and the risk of assassination of individuals.

However, he said the UK had strong defences against such activity.

Reversing Brexit would boost economy, says OECD

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Reversing the Brexit process would boost the UK economy, the international economic body, the OECD has said.

A new referendum or a change of government leading to the UK staying within the EU would have a “significant” positive impact on growth, the OECD said.

It also warned “no deal” would see investment seize up, the pound hit new lows and the UK’s credit rating cut.

It said the outcome of the Brexit negotiations was hard to predict.

The Chancellor, Philip Hammond, said the UK would consider the Organisation for Economic Co-operation and Development (OECD)’s report and act where it could.

Analysis: Andrew Walker, World economics correspondent

It’s influential. It gets in the news a lot. But what on earth is it? First of all the OECD is an intergovernmental organisation. Its members are mainly the rich countries, though it also includes some of the more developed emerging economies such as Turkey and Mexico – the current Secretary General, Angel Gurria, is Mexican. The OECD does a lot of things that you would expect from a think tank. It publishes research about economic and social issues. It assesses the performance of member countries. But there’s more. It’s also a forum for its member countries to discuss issues and sometimes to agree on what to do about them, including bribery and tax evasion.

At a press conference following the release of the report, Mr Hammond reiterated that companies in the UK and the European Union would benefit from the certainty of a limited transition period after Brexit.

He said: “[By] delivering a time-limited transition period, avoiding a disruptive cliff-edge exit from the EU, we can provide greater certainty for businesses up and down the UK, and across the European Union.”

The OECD’s secretary general, Angel Gurria, said that any future relationship with the European Union should be close: “It will be crucial the EU and the UK maintain the closest economic relationship possible.”

The organisation’s report highlights other challenges for the UK, including productivity and the growth of zero-hours contracts.

It says rules should be tightened to restrict self employment to “truly independent entrepreneurs”.

But its most forceful language is on the subject of Brexit.

As well as foreseeing a fall in the pound and a freezing of business investment, it says heightened price pressures would “choke off” private consumption.

It also says the current account deficit could be harder to finance, as a fall in the UK’s credit rating could lead to higher interest rates to attract lenders from other countries.

Productivity question

The group also commented that UK productivity growth had come to a “standstill”, adding that the picture was weakest outside Greater London and the south east of England. It said that pattern “may lead to, or be the result of, important differences among people in terms of income and wealth, jobs and earnings, and education and skills”.

It said these “may have been one of the causes of Brexit, as less-educated workers in remote regions might have perceived to benefit less from the European project”.

Among its recommendations for boosting productivity are increasing policies that give more power to the regions.

A Treasury spokesperson responded to the OECD’s recommendations on productivity.

“Increasing productivity is a key priority for this government, so that we can build on our record employment levels and improve people’s quality of life,” the spokesperson said.

“Today, the OECD has recognised the importance of our £23bn National Productivity Investment Fund which will improve our country’s infrastructure, increase research and development and build more houses.”

The OECD suggests the growing use of what it calls “non standard” forms of employment, including self-employment and zero-hours contracts, can be “detrimental” to the acquisition of skills and the job quality of low-skilled workers.

How do you solve a problem like debt? Your questions answered

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Is debt getting on top of you? Not sure how to pay off your credit card?

Borrowing on loans, overdrafts, credit cards and car finance has accelerated since 2011.

On top of that, the chief executive of the Financial Conduct Authority has warned of a “pronounced” build up of debt among young people.

We asked debt expert Bev Budsworth, managing director of The Debt Advisor, your questions.

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1. I have £10,000 worth of debt on my credit cards – what are my options? I work full time.

Your options really depend on your affordability, can you afford those payments, are you struggling to afford them?

If you’re struggling to afford them, a managed Debt Management Plan, with either a commercial or free client company might be the answer, where they aim to freeze interest and charges and allow you to pay that debt, but your credit card rating will be affected.

To protect your credit card rating you’ve got to aim to try and pay more than your minimum payment, so you’ve got to check your income and expenditure and work out if there’s any waste and you can increase those payments on your credit cards and aim to get rid of them over a reasonable period of time.

2. How can you escape an overdraft when you can’t afford to pay more than the interest so the balance never falls?

The first step is to review income expenditure and work out if there are any savings that could be made in your expenditure.

Apparently most of us waste £50 to £60 a month on subscriptions, music, coffees, TV.

Just go through your expenditure, there are apps that will sort of do a scrape of your bank account and identify areas that you’re wasting.

The idea is to limit your expenditure and then that will limit how far you go into your overdraft every month.

3. I cannot afford to pay back my student loan, what are my options?

Worrying about student debt or student loan debt is kind of a wasted worry. Student debt won’t go away, it survives bankruptcy so you can’t make yourself bankrupt and get rid of student debt, you can’t include it in an Individual Voluntary Arrangement.

It’s only repayable based on an affordable basis. Really what you want to focus on is clearing debt that is credit cards, and loans that have high interest rates – your student loan debt will look after itself as you earn.

4. Is it better to try and pay as much off at once in bulk, or little payments that may result in more interest charges over time?

If this relates to credit cards you would definitely try and pay it off as soon as you possibly can.

If it’s a loan, you can pay off quickly and generally there may be a month’s interest that’s charged, but generally there is no penalty for paying back loans early.

Mortgages, that might be different, but if it’s credit cards… if you’re paying little bits every month and you’ve got interest running every single month then it just doesn’t make sense.

5. I am constantly living from payday loans even though I have a full time job. I am at wits’ end and stressed out. They are too easy to get.

Formally, Debt Management Plans – here the aim is to freeze interest and charges and allow you to repay the capital over a period of time. it will affect your credit rating.

Informally, you could also put the payment plans to your creditors yourself, so deal directly with your creditors.

It does take time, you’ve got to be able to respond to creditors’ queries, so it just depends how disciplined you are.

In formal solutions there are individual Voluntary Arrangements. It’s generally a five-year payment plan, paying an affordable sum every month and as long as you stick to the plan, the debt you can’t afford to pay at the end is written off.

6. How to get out of debt when credit card interest is high for someone on a low income and it is hard to get a zero interest card as income is too low?

It sounds to me as though the credit card’s really not affordable… not sure whether recommending transferring the balance on to a zero interest credit card would work because your credit rating may not be that good and you may not be able to clear the debt during that period of zero interest.

It sounds to be me as though you need some sort of managed plan, whether you do it yourself or you use a debt management company to help you put a plan together with your creditors, which freezes interest and charges and allows you to repay the debt in an affordable way.

This assumed you’ve got a balance left over. if you haven’t, after your income and expenditure, got any surplus left there are options to write off debt, especially if your surplus is under £50 a month and your debt is under £20,000 – this is the Debt Relief Order that I’ve referred to before… it’s a mini bankruptcy.

House prices: Have they actually gone up in your neighbourhood?

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House prices in more than half of neighbourhoods in England and Wales are still lower in real terms than a decade ago, BBC analysis has revealed.

In 58% of wards, residential properties are selling for less now, after accounting for inflation, than they were in 2007.

in

Your ward is

% after inflation adjustment
For the average price of a house in your ward, you could buy…or

How have house prices changed since the recession?

Average house prices from 2007 to 2017, not adjusted for inflation

England & Wales

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The findings, drawn from official data, expose a stark regional divide in price movement since the financial crisis.

Rising house prices have been confined to the South East and East of England.

Average house prices in Wales, Yorkshire and the Humber, the North East and the North West have declined by more than 10% since 2007, when values are adjusted for inflation.

Meanwhile the latest official figures indicated that house prices across the UK rose by 5% in the year to August, taking the average price of a property to £226,000.

The Office for National Statistics said the smallest increase was in London, where prices rose 2.6%.

Adjusting for inflation when comparing 2007 house prices to those in 2017 allows for a more realistic comparison of their value given changes in the cost of living over the last 10 years.

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Housing market analyst Neal Hudson said the income squeeze in many parts of the country had constrained house price growth.

“Some people are trapped in their current homes as they have seen no increase in their income and cannot afford to borrow more,” he said.

“Potential first-time buyers in the private rented sector do not have a sufficient or stable income to buy their first home. The idea of committing to a 25 to 30-year mortgage when they are not sure what they are going to earn in the next year is difficult.”

The BBC data team and the Open Data Institute (ODI) Leeds analysed more than eight million residential property transactions in England and Wales from the Land Registry database for the period from 2007 to July this year. These exclude mortgaged buy-to-let properties.

The price of an average home in England and Wales has remained flat since 2007, after taking inflation into account.

Although most regions have seen house prices go up, this has not been as fast as the rate at which prices in the rest of the economy have risen.

In some areas, a decline in the average house price could potentially be attributed to single properties being split up into multiple ones, as the analysis is unable to take into account the size of the property sold. In Hyde Park and Woodhouse ward in Leeds, the average price so far this year was 57% down from 2007, largely due to the sale of almost 50 student flats.

At one end of the scale, some parts of London have seen massive increases in house prices compared to a decade ago.

The average house price in some areas of Tower Hamlets and Hackney has more than doubled, even when adjusting for inflation.

In the Notting Dale ward of Kensington and Chelsea, which contains Grenfell Tower, average prices had risen from £340,000 in 2007 to £600,000 in 2016. In three of the wards bordering Notting Dale property prices average more than £1m.

Prices have also risen significantly in some parts of the East of England and the South East. In Iver village and Richings Park ward in South Buckinghamshire, the average price so far this year is £700,000, up from £275,000 in 2007.

The least expensive ward in the country is North Ormesby in Middlesbrough.

In 2017, the average house price there was £36,000. At £2.9m, an average home in the most expensive ward – Knightsbridge and Belgravia – costs the same as 80 homes in North Ormesby.

Horden, in County Durham, is another ward that has seen a major decline in house prices over the last decade. The average price for a residential property in the area has gone down from £74,000 ten years ago to just below £40,000 so far in 2017.

Lee Percival bought his two-bedroom home in Horden in 2008 for £113,000. It is now worth around £85,000.

“I feel trapped. I regret buying it, my wife loves it but I feel like we’ve made a loss. I think I’d just have to cut my losses or rent it out. I know I could never sell it at the moment,” he told the BBC.

Areas in Wales have also seen a significant drop in house prices, with nine in 10 wards in the country now selling for less in real terms than they were before the financial crisis.

The number of homes being bought and sold in England and Wales has also not recovered to pre-crisis levels.

Some property experts think transaction figures may provide a more accurate indication of the health of the market than house prices.

In 2007, almost 1.3 million residential properties were sold at full-market value in England and Wales.

The following year that figure almost halved and despite having risen significantly in 2014, sales still totalled just over 900,000, last year, according to Land Registry data.

Potential buyers’ ability to purchase a property is not based solely on the cost of the house.

Lenders have been told to impose stricter criteria when offering mortgages since the financial crisis. That has led to more stringent analysis of borrowers’ ability to repay and higher initial deposits than 10 years ago, in all parts of the country.

Low wage growth has also affected confidence of people willing to buy for the first time or move to a more expensive property.


Produced by Daniel Dunford, Nassos Stylianou, Ransome Mupini, Tom Forth (ODI Leeds), John Walton, Kevin Peachey and Ruth Green. Design by Sumi Senthinathan. Development by Joe Reed and Gabriel Lorin.

How is the average for your ward calculated?

The BBC data team and the Open Data Institute (ODI) Leeds analysed all residential transactions sold at full market value in England and Wales from the Land Registry database for the period from January 2007 to July 2017.

Therefore repossessions, buy-to-lets – where they can be identified by a mortgage – and purchases by companies are not included in the analysis.

All of these transactions were then mapped to government wards, small electoral districts, using ward boundaries from the Office of National Statistics as of December 2016.

The median was used to calculate the average house price for every ward in each of the years from 2007 to 2017. Where there were fewer than 10 transactions per ward in a given year, the median is not provided given the small sample size.

To calculate the percentage change from 2007 to 2017 in real terms, the 2007 price paid figures were first adjusted for inflation using the Consumer Prices Index (CPI) figures for July 2017 and the month in 2007 that the house was sold.

The percentage change between the median price for each ward from 2007 (adjusted for inflation) to 2017 was then calculated.

In some areas, a decline in the average house price could potentially be attributed to single properties being split up into multiple ones, as the analysis does not take into account the size of the property sold.