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Daily Mail
4 minutes ago
- Daily Mail
The 37 taxes you pay and why it now takes £3.1m to feel 'wealthy' - This is Money podcast
While the average household pays £16,700 in direct tax on income, our audit shows this is just the tip of the iceberg. We all pay a multitude of other taxes, from air passenger duty to environmental levies on our energy bills. Lee Boyce, Simon Lambert and Georgie Frost discuss what the total sum is - and that our tax rate is more like 57 per cent. And tax rises don't always bring in more cash for the Treasury coffers. As the Government weighs up introducing yet another tax - this time a wealth tax - we explore why despite the allowance being slashed the capital gains tax take is down and what it means for the Chancellor's plans. How much you need to feel wealthy in different areas of Britain? Does £1million still cut it? The six burning questions everyone is asking financial advisers right now… and their expert answers And we answer a reader query: Could I give £250 gifts to 400 people who then pay them to my daughters to beat inheritance tax on £100,000? Listen to the This is Money podcast We publish the podcast every Friday on This is Money and at Apple Podcasts, Spotify, Amazon Music and more. Search for it at your favourite podcast platform. To download Apple Podcasts go to the App store. On Android devices, go to the Google Play store to download the podcast app of your choice. You can press play to listen to this week's full episode on the player above, and wherever you get your podcasts please subscribe and review us if you like the podcast. You can also listen to the latest episode, find the archive and join in the debate in reader comments on the This is Money podcast page.
Telegraph
4 minutes ago
- Telegraph
Today's Supreme Court ruling was a narrow miss for the economy
Britain is still, just about, a country in which it is possible to do business. The Supreme Court's decision today saw a drastic reduction in the scope of potential compensation claims against car finance lenders. To the extent that a 'scandal' existed in this field, it is the degree to which the British legal system had appeared prepared to rewrite the terms of loans made close to two decades ago in line with a vague sense that customers deserved a better deal. The direct losses to the financial sector (tens of billions of pounds in compensation claims) would have been significant on their own terms. The economic damage, however, could have been far more widespread. The effect of such a broad-ranging retrospective verdict would have had a chilling effect on the willingness of lenders to take risks in the British market. Who would want to lend money in a country where a court could decide years afterwards that compensation should be awarded to people who signed up to a loan knowing what they would pay and what they would get simply based on the salesman's commission? It is a testament to the sheer terror with which the Treasury would have viewed this prospect and the associated losses of growth and tax revenues that Chancellor Rachel Reeves was reportedly looking into legislative means to overturn a decision that went against the banks; it is hard to think of a stance less natural for this Labour Government to adopt. As things stand, there are still potential claims against those whose loans came with 'excessive' commissions. These should suffice as a warning shot against predatory practices, should any be needed. But it is worth saying that this may not be wholly desirable either. The principle of 'caveat emptor' may have fallen out of fashion, but it is far from clear that the compensation culture we have erected in its place is superior. Investing time and effort into understanding the terms and conditions of a purchase seems increasingly irrational: simply lay out your cash and should you subsequently have regrets, rest safe in the knowledge that the legal system will find a way to attempt to claw it back. This compensation does not materialise from the ether. When it is paid out, the cost is frequently borne by other consumers, who face higher prices or fewer options. This time around, we have at least arrived at a sensible conclusion. The Treasury and Ms Reeves can breathe a sigh of relief. Parliament, however, may wish to give serious thought as to the desirability of a legal structure that permits this sort of uncertainty to arise, and the incentives which it offers the public.
The Independent
34 minutes ago
- The Independent
Lenders do not owe millions compensation over car finance, Supreme Court rules
Sign up to our free money newsletter for investment analysis and expert advice to help you build wealth Sign up to our free money email for help building your wealth Sign up to our free money email for help building your wealth Email * SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our Privacy notice Lenders have avoided potentially having to pay compensation to millions of drivers, after the Supreme Court ruled they are not liable for hidden commission payments in car finance schemes, but some motorists may still receive payouts. The UK's highest court ruled that car dealers did not have a relationship with their customers that would require them to act 'altruistically' in the customers' interest. The decision comes after two lenders, FirstRand Bank and Close Brothers, challenged a Court of Appeal ruling which found 'secret' commission payments, paid by buyers to dealers as part of finance arrangements made before 2021, without the motorist's fully informed consent, were unlawful. The ruling in October last year found that three motorists, who all bought their cars before 2021, should receive compensation after they were not told either clearly enough or at all that the car dealers, acting as credit brokers, would receive a commission from the lenders for introducing business to them. On Friday, Lords Reed, Hodge, Lloyd-Jones, Briggs and Hamblen ruled that car dealers did not have a relationship with their customers that would require them to act only in the customers' interest, and that the Court of Appeal was wrong. But they said that some customers could still receive payouts by bringing claims under the Consumer Credit Act (CCA). The Financial Conduct Authority (FCA) said it will confirm by Monday whether it will consult on a redress scheme, while one of the three drivers said he was 'dumbfounded' by the ruling. Handing down the judgment, Lord Reed said the car dealer 'was at all times pursuing its own commercial interest in achieving a sale of the car on profitable terms'. He continued: 'In reaching the opposite conclusion, the Court of Appeal failed to understand that the dealer has a commercial interest in the arrangement between the customer and the finance company. Get a free fractional share worth up to £100. Capital at risk. Terms and conditions apply. Go to website ADVERTISEMENT Get a free fractional share worth up to £100. Capital at risk. Terms and conditions apply. Go to website ADVERTISEMENT 'The court mistakenly treated the dealer as acting solely in the interests of the customer once the customer had chosen a car and agreed a price.' The FCA, which intervened in the case, previously said it would set out within six weeks whether it would consult on a redress scheme. But a spokesperson said after the ruling that it would confirm whether it will consult on any such scheme by 8am on Monday 'to provide clarity as quickly as possible'. Lord Reed said the Supreme Court had decided to deliver its ruling on a Friday afternoon, outside of trading hours and after the markets had closed for the weekend, to avoid the risk of 'market disorder'. The three drivers involved in the case, Marcus Johnson, Andrew Wrench and Amy Hopcraft, all used car dealers as brokers for car finance arrangements for second-hand cars worth less than £10,000 before January 2021. Only one finance option was presented to the motorists in each case, the car dealers made a profit from the sale of the car and received commission from the lender. The commission paid to dealers was affected by the interest rate on the loan. The schemes were banned by the FCA in 2021, and the three drivers took legal action individually between 2022 and 2023. After the claims reached the Court of Appeal, three senior judges ruled the lenders were liable to repay the motorists the commission because of the lack of disclosure about the payments. Lawyers for the lenders told the Supreme Court at a three-day hearing in April that the decision was an 'egregious error', while the FCA claimed the ruling went 'too far'. In their 110-page judgment, the five Supreme Court justices found that 'an offer to find the best deal is not the same as an offer to act altruistically'. They said: 'No reasonable onlooker would think that, by offering to find a suitable finance package to enable the customer to obtain the car, the dealer was thereby giving up, rather than continuing to pursue, its own commercial objective of securing a profitable sale of the car.' However, the judges upheld a claim brought by Mr Johnson under the CCA that his relationship with the finance company had been 'unfair'. Mr Johnson, then a factory supervisor, was buying his first car in 2017 and paid the £1,650.95 in commission as part of his finance agreement with FirstRand for the Suzuki he purchased. The Supreme Court ruled he should receive the commission and interest, which Mr Johnson told the PA news agency totalled 'just over £3,000'. Mr Johnson said that he was 'dumbfounded' by the ruling, which he said 'does not sit right with me'. He said: 'I am obviously happy that my case was successful, but for so many other people that were also overcharged, I just don't like the message it sends to the UK consumer.' He said the ruling 'sounds like it's fine to secretly overcharge customers for commission'. A Treasury spokesperson said it would work to 'understand the impact for both firms and consumers'. They said: 'We recognise the issues this court case has highlighted. That is why we are already taking forward significant changes to the Financial Ombudsman Service and the Consumer Credit Act. 'These reforms will deliver a more consistent and predictable regulatory environment for businesses and consumers, while ensuring that products are sold to customers fairly and clearly.' Close Brothers said it was 'considering' the judgment and 'will make any further announcements as and when appropriate'. Kavon Hussain, founder and lawyer at Consumer Rights Solicitors, which represented Ms Hopcraft and Mr Wrench, said it was 'disappointing' the Supreme Court did not fully uphold the Court of Appeal's ruling. He said: 'The Supreme Court ruling supports our view that lenders had acted unfairly in millions of car finance deals. 'This should now pave the way for the biggest compensation payout to motorists in British legal history. 'We will fight to get consumers the money they are owed by these lenders.'
