How would you improve banking services?

“real money” doesn’t exist – cheap steel coins and paper or plastic have no intrinsic value. You would have to look to gold and silver in that they had real uses other than legal tender – as long as their was a need for those precious metals. So we use tokens; they might as well be electronic as printed. The only real “money” is in physical assets, carefully chosen to continually become scarcer. I do take the point about keeping your tokens under the floorboards. Hope for no house fires and don’t forget about it when you move (wavechange – a reminder 🙂 ).

Hidden underneath the floorboards of my late mother-in-law’s house was a stash of Royal Arsenal Cooperative Society dividend tokens – little tin or brass ‘coins’ which could be redeemed for cash. They were issued in proportion to the amount spent in the stores [like Clubcard or Nectar points today]. Not specie, or treasure trove, but an interesting find none the less.

It is true that modern methods such as Direct Debits and the Internet have contributed to the “cashless society”, but is this not more convenient for all of us. Would you really like to queue in any establishment to draw cash, then to have to take it to physically pay your Gas/Electricity supplier? The fact that money has become virtual has heightened security, with smaller amounts being carried by us and by Security Carriers. This has helped to reduce the total cost of cash handling compared to what it would otherwise have been. The balance in your account still belongs to you!

Duncan Lucas, I agree completely! Another banking scam is the conversion of currency and transmitting it to another country! My bank used to gain on the conversion by offering a poorer exchange rate, then charge £25 per transaction to transfer to a bank account in another country, despite the fact that I transferred it regularly!
I researched other ways to do it and PayPal and the Post Office do not charge for the service at all, though they may make some money on the exchange – a much better deal!
Banks are a rip off!

Folk have been complaining about currency charges for some while now:

Matthew 21:12-13King James Version (KJV)

12 And Jesus went into the temple of God, and cast out all them that sold and bought in the temple, and overthrew the tables of the moneychangers, and the seats of them that sold doves,

13 And said unto them, It is written, My house shall be called the house of prayer; but ye have made it a den of thieves.

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I wasn’t thinking of billionaires, or even millionaires, Duncan. People with just a few tens of thousands resort to extra-territorial investments through our high street banks [like in Jersey] because they are fed up with the poor returns at home. It doesn’t necessarily have anything to do with tax minimisation or secrecy, just a better way to make an inheritance or a windfall, or your life’s savings or pension pot, work harder for you. It sounds alright to me but through the curse of envy it seems to be frowned upon now.

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The Channel Islands are no longer an off shore tax free avoidance they once were
There was an amnesty a number of years ago and many folk with a few 10s of K got to pay backdated tax on their previously tax free earnings
The back tax payments were pretty stiff and there was no negotiating allowed. . .Flat rates
You’ll not have to go far to find someone caught out by the then measures
No one is complaining about where one banks or invest’s it’s the tax avoidance that we dont like. . .
If one has to pay tax all should be treated the same
The Channel Island thing happened a few years ago now and those people are livid at the idea that whilst they had to pay back tax there were deliberate loopholes left for the super rich
The guy who worked in Saudi or wherever and paid tax there and never brought the money into the UK proper ended up paying on the interest/dividends
Even the caper of negotiating with HMRC because your a Big Boy is also distasteful for many if not near everyone on the street

I thought the whole point of the Prime Minister’s disclosures was they show that he has paid tax on his income in full, as required. If that had not been the case I doubt he would have revealed it. We knew all along he was well-off so this doesn’t add much to our knowledge. All the Prime Ministers I can remember have had a secure financial background. I think there is a lot to be said for it.

Yes DeeKay – aggressive tax avoidance has now been outlawed and through international cooperation there is a lot more information available to the HMRC than there ever was before.

I am against loopholes – the Treasury and HMRC should be closing these as quickly as they discover them. Taking advantage of their inside knowledge of the UK tax system some of the top accountancy firms who advise the government are alleged to have assisted some of their UK clients to shelter their assets and incomes via their operations in other jurisdictions. But all these dodges are getting penetrated now and I am sure there will be more leaks from law firms and the tax havens. I think there must be quite a number of very worried people out there.

Following the Panama leaks a number of big names have been in the papers but there are thousands upon thousands of other people who the authorities will now invite in for a coffee and a confession. If they have done anything illegal I hope it will be possible to name them and penalise them. I am not against negotiating with tax debtors if the alternative is an impossible court case that would tie up tax officers for years and cost a fortune to mount – that would unduly enrich the legal profession.

There must still be some financial advantages in investing in Channel Island-type banks and funds otherwise they would die on their feet as investors went elsewhere. I think it is greed that propels people in those directions; I think that was the primary motivation for the thousands of retired people who put their entire life savings in Barlow Clowes investments. That outfit was wound up around thirty years ago following financial collapse due to fraud. The personal clients initially lost the lot but the government was forced to compensate them in the end for most of their losses at a cost of £150m [probably worth double in today’s money].

We just don’t know how many of those who bank offshore are avoiding tax that they should be paying, and how much revenue is being lost as a result. Even with a crack-down, the money won’t all come home – it will be creatively converted into some other vehicle.

I suppose everyone who had a deposit box at the Hatton Garden vault that was not touched during the burglary one year ago has by now recovered the contents, but I wonder what they have done with them. It wasn’t all the stock-in-trade of working jewellers and it is possible that many of the depositors whose boxes were raided have preferred not to come forward with a claim.

Luckily I have none of these worries and can sleep soundly at night.

Tax evasion is a criminal act. Tax avoidance has always been the taxpayer’s right within the legal parameters and if honestly done. This is responsible tax planning which encompasses the things you mention Malcolm. The waters were muddied a few years ago with references to “aggressive tax avoidance” which seems to be creative accountancy schemes which, while not specifically illegal at the outset, are designed to have the effect of restricting the availability of significant revenue to the tax authorities through various manipulations and transfers. [That’s my guess as to the meaning, not an official definition.]

Each tax relief or concession on its own had a purpose and a target. What has developed over the years is a cat’s cradle of interlocking allowances and exemptions with all manner of qualifications and thresholds which keep the accountants juggling and concocting new by-passes.

I wouldn’t go so far as Malcolm and suggest getting rid of all the tax breaks – they do make life simpler for a vast number of taxpayers. And having an ISA is not tax avoidance – it is a tax-free savings product so no avoidance is involved. It is prudent financial planning to take advantage of such provisions where opportunities exist and it is a pity that simple financial advice for customers on how to make the best use of money and savings products is now hedged about with so many limitations on what the staff behind the counter can say to you [although the reasons for such controls are understandable in light of the miss-selling that went on].

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Absolutely right Bishbut – in fact a personal loan would usually be cheaper than an overdraft so long as the repayments are maintained. To the extent that an overdraft operates in an offset manner against any credits in the current account it can be better value over the short term for a specific item of expenditure, and possibly better than using a cedit card, in which case an authorised overdraft is the answer. Any credit requires diligent management to avoid escalation.

If, overall, your income is not less than your expenditure, an arranged overdraft facility can be useful. For example if the timing of outgoing payments does not coincide with income in a month, say, a temporary loan (overdraft) fills the short term gap. You may also find an unexpected payment is required – fixing your car say – for which you have the means but maybe not immediately accessible; so again an overdraft will bridge the gap. Probably the simplest, most convenient and cheapest form of very short term loan.

If your expenditure always exceeds your income you need to deal with your financial affairs responsibly, and make a budget. Overdrafts, credit cards and loans are not the long term (or even medium term) answer.

I think a lot of current accounts are deliberately set up so that many customers cannot easily manage their money.

This, of course, makes it hard for them to avoid unintended overdrafts and makes it easy for the banks to charge them penalties and other fees.

It seems obvious to me that any such arrangements are skewed in favour of the banks – not the customers.

Life would be simpler and less painful for many customers if the banks only allowed them access to their own money and did not let them go overdrawn. Most savings accounts do only work that way, but current accounts all seem to be set up so that folks can easily end up in debt.

It’s a disability problem surely some one could try a test case?

I have seen a comment about a Video Relay Server service that some banks offer. This may help even if it means changing banks? Presumably it is most easily used if you communicate by sign language, but written communication might be a possibility? Have you come across this?

There are no penalties for arranged overdrafts. If people qualify, that is what they should do – arrange an overdraft facility. If they do not qualify and the bank considers them a bad risk, or if they simply cannot be bothered to make an arrangement with their bank, then there should be a deterrent. What is ridiculous when the remedy is so simple, and all you are being asked to do is to behave responsibly, ?