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Post Office Reward Saver Account IS a safe Product

In June I suggested that the Post Office Reward Saver Account was an unsafe product for those who might lose mental capacity in the future. This arose from a technical error in their terms and conditions which they have now recognised and will correct. They do in practice recognise a Finance Lasting Power of Attorney registered with the Office of the Public Guardian.

If the OPG has been just a bit more proactive this issue would have been resolved months ago.

NASA Funded Study Predicts Likely Civilization Collapse

See:  April 2014


Slightly more coloured version at:


Full paper downloadable at:

A systems dynamics model is developed linking economic systems with natural systems and used to explain the collapse of historic civilisations. Inequality is as an important factor as aggregate over consumption of natural resources.

Employment Figures

David Cameron trumpeted the improvement in employment figures in prime Ministers Questions today. Miliband did not contradict him. Surely he knows that in these days of zero hours contracts, the figures are meaningless. 1 person on 40 hours per week = 1 person on 2 hours per week average.

A better statistic would be ‘full time equivalents’ where (supposing the standard working week were 40 hours) 1 person working for 2 hours on average would be 1/20th of a full time equivalent. But even this would not capture the full horror of being locked into a zero hours contract where you are not allowed to work for anyone else.

Why will Labour not call time on this charade?

Those Tax Forms

Many of those who have the misfortune of having to submit a self assessment tax form on paper will be aware of just how much more difficult things have become in the last two or three years.

A few years ago HMRC staff considered themselves as public servants rather than the tax farmers they now appear to be. They would not help you to minimise your tax bill; that never was their job, but they would explain things properly and help you as far as possible to file an accurate return.

I speak of those who deal with taxpayers over their own personal tax affairs. If you are acting as a trustee, a company director, or as a paid agent for someone else you are treated with respect. Otherwise they treat you like dirt.

Of course they want you to file online and now claim that most people do, but I am not sure if I believe that claim. There are reasons why many cannot. Either they are not confident enough to learn how to use the software, or may be required to submit supplementary pages for which HMRC does not provide the software. There is commercial software but HMRC does not warrant its accuracy, and holds you responsible for any cock ups.

If you do have to submit on paper and have to phone HMRC they are not normally openly rude; that would open them to formal complaints, which I guess could affect their bonuses, but they are passively unhelpful. If you as a tax payer state a problem, they never offer solutions. You are reduced to asking questions to which the answer is a simple yes or no. But if you suggest a solution and ask if that’s the right approach they will never say more than, ‘you could always try that’; they won’t even say whether it is acceptable to them.

Having submitted your return, you might be lucky and receive back a calculation that looks correct. If it looks wrong however the fun really starts. The first response is always, ‘We have done the calculation on the figures you have submitted.’ Never accept that claim, it’s bullshit. It assumes firstly that the calculation software is correct, (which it probably is, but how can you know?) More importantly it assumes your figures are correctly transcribed. The days that your figures are typed manually into their system are gone. The pages of your return are scanned in and not checked by human eye; HMRC staff have had to admit this to me when I challenged them.

Anyone who knows anything about Optical Character Recognition software knows that it is not perfect; it makes mistakes. Ideally if it is not certain it can read the page accurately it will reject it and then human beings would have to input it, but this is not in my experience what seems to happen with the HMRC software. It just adds in spurious figures which can double your tax bill or worse. Your first step is to find out what they have got in their system. You ask for their record of what you submitted. They will send you (after a considerable delay) a very poorly formatted and almost illegible print out of what is in the system. When you track down the spurious figures and point out the error, they will ask, ‘Do you want to change your figures’, and will warn you that submitting incorrect figures (even if as a mistake and even if the spurious figure is to your disadvantage), is a very serious offence. If you say, “No I do not want to change what I submitted I simply want your mistake put right”, they will accuse you of being delusional. If you then ask for a photocopy of your paper return, they will say they do not keep paper copies, and that is probably true but they will NOT say that they keep the scanned in images before conversion to text. If you ask for that they will say that it is too costly to provide.

At that stage you have to submit a formal complaint. The scanned in copy then magically appears and they have to give way on the substance of your complaint and correct the figures without any further threat of fines etc. However they will never actually apologise.

But that isn’t the end of their tricks. Before you even get to discover the misreads, your return may be rejected ( some months after submission) on a technicality. Suppose for example you are registered as a self employed author and you have published nothing that year. You submit a nil return. If you omit to supply the date up to which the books were made up, the form will be rejected, and you have to ask for a new blank copy of all the forms; they won’t be sent with the rejection notice. This delay of course severely compromises your ability to get errors corrected.

Another trap is on benefits. Some benefits such as Attendance Allowance are not taxable, see:

but HMRC do not want you to realise this. If you ask them the direct question on the phone, they will not give you a straightforward answer but suggest you read the notes for guidance. However the ‘Brief Notes: Tax Return’ form SA150(B) sent out with the basic tax form SA100 DO NOT clarify this point. It is true that the fuller notes, ‘How to Fill in Your Tax Form’ form SA150 do clarify this point, but the existence of this document is not referred to in SA150(B), and if you phone up you will not be told of its existence.

Is that a reasonable way of treating those caring for an elderly parent who have to fill in the tax form?

You may well ask why fill up your own form, why not use an agent? Apart from the the fee involved all kinds of problems can arise – be wary.

If you do land up submitting a tax form on paper, the following tips might help:

a. NEVER submit your return on forms downloaded from the internet and printed at home. Unless you have a top of the range colour laser printer it is highly likely that the OCR software will misread them. Phone the order line and ask for all the forms you might need.

b. Do download all the relevant notes for guidance and read them before you start. Otherwise you could waste time for example filling in a CGT form you don’t need to.

c. NEVER submit a form with a crossing out on it. This used to be OK but now the scanning operation will produce all those spurious figures. Instead always fill in the form in soft pencil, double check it, ink in the figures and carefully rub out the pencil marks.

d. ALWAYS take a photocopy or scan in of every page of every form you submit. Otherwise when you get to the complaints stage they will convince you that you made a mistake. Making notes is not enough.

e. When downloading or ordering notes for guidance ALWAYS obtain SA150 and do not be fobbed off with SA150(B). ALWAYS write a letter of complaint that you are not sent or offered  SA150 automatically.

f.If in spite of the above you have a source of income which are are still not sure whether it is taxable, DO NOT include it in any of the numbered boxes. Instead list it in ‘any other information’, explaining that you have been unable to find out whether it is taxable. It is highly unlikely that anyone will read this unless they do an audit on you, but you are covered if they do.

This information is provided in good faith but in view of the Kafkaesque nature of the UK tax code and associated penalty regime, I cannot accept responsibility for the consequences of reliance on it.

Capitalism is Dying…But Something So Much Better is Taking Its Place


Bosnia and Herzegovina in Spring (2014)

A message of hope at,

It’s not just the Banks


There is too much debt, and not just government debt; that at least is commonly agreed. Money reformers and others such as Richard Werner think this is the fault of banks creating too much money in exchange for loans. This is only partly true.

It is true that banks create the money they lend and do not wait for deposits. This means that they can ration the volume of lending. It is better for the banks to advance loans secured on the asset (such as a house) which the borrower is buying. Unrestrained bank lending can push up house prices and prices of some other assets and that needs to be checked. It does not help first time buyers if mortgage terms are too ‘easy’. House prices rise and so they are saddled with bigger debts.

But many people are now borrowing because they don’t earn enough to pay for day to day expenses, and certainly not for unexpected things like car repairs, house repairs, losing jobs or benefits etc. This is happening because of rising inequality. Prof. Richard D Wolf offers an excellent analysis of the reasons for rising inequality in the US this in ‘Capitalism hits the Fan’, see for a short summary or for a 1 hour 45 minute video. There is also a book.

Since the 1970s there has been a major shift from wages to profits in the way in which company revenues have been shared. Wolf attributes this to a combination of productivity improvements resulting from technology such as computers, and moving production offshore. I well remember the debate in the 1970s about whether the effect of computers would be to shorten the working week. It hasn’t worked out that way of course. Those who have work, are working harder than ever for less pay in real terms. The combined effect of productivity increases and offshoring has been to reduce the demand for labour and so allowed employers to pay less in real terms and impose harsh conditions. Paradoxically it has forced people to take on second jobs, for more women to work etc. to maintain their standard of living. By 2008 this had got to the point where the demand for ‘stuff’ had started to drop thus feeding into the crisis.

Wolf does not believe that government regulation will reverse this. Corporate lobbying and buying of politicians will always undermine effective regulation. His remedy is that boards of companies be made up of workers rather than shareholder nominees. Such boards would adopt more socially responsible policies. My question is how is this to happen? Wolf seems to think it can happen without any legislation or government intervention. People can set up producer co-operatives, and he points to silicon valley as providing examples.

The issue as I see it is financing. Although at times a company might be able to finance capital expenditure from retained earnings, at other times it will have to issue shares and /or arrange loan finance. A worker controlled company might not look a good investment, especially at start up. Both shareholders and banks are likely to insist on representation on the board. The silicon valley start ups are (I think) rare examples of very high tech. industries where the employees are specialists who have previously been very highly paid and can presumably provide much of start up capital. In Britain there are two well known examples of producer co-operatives, the Scott Bader Commonwealth and the John Lewis partnership. Scott Bader was well established before the family donated 90% of the shares to the Commonwealth. John Lewis was also fairly well established before it became a Partnership, and seems to have kept its leveraging low. [ in July 2013, Retained earnings £1.9 bn, current liabilities £1.4 bn, non current liabilities £1.9 bn. ]

An example of how the concept of worker control might be more widely spread is given by the Mondragon Corporation (revenue 14 bn euros in 2012). This started in the Basque town of Mondragon as a network of producer co-operatives, technical colleges and banks. A key factor must have been a strong sense of community, and relative isolation and self sufficiency. However Noam Chomsky has warned:

Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does come from the workforce often, but it’s in a market system and they still exploit workers in South America, and they do things that are harmful to the society as a whole and they have no choice. If you’re in a system where you must make profit in order to survive, you’re compelled to ignore negative externalities fixed on others.”

I believe however that we should not dismiss the producer co-operative model. In this context it is worth noting that Prof. Richard Werner of Southampton University and others are trying to establish a network of local banks, along the lines of the German Sparkassen, [ and ] and it would be logical if producer co-operatives became part of that network. If such a network were established it might help to generate the political pressure for government to support it in some way.


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