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Page last updated at 13:55 GMT, Saturday, 30 January 2010

Tax proves to be taxing after all

Woman at cash machine
BBC Radio 4's Money Box
Saturday, 30 January 2010 at 1204 GMT On Radio 4 and Online

Money Box listeners have a couple of bones to pick with HM Revenue & Customs.

Firstly, it has issued a warning about mistakes in the tax codes currently being issued to tax payers.

Coding notices tell tax payers how large their personal tax allowance will be in the coming tax year, and how much tax their employers should deduct.

Earlier this week, the Chartered Institute of Taxation warned that many faulty or duplicate notices were being sent out. It said taxpayers could be asked to pay up to £108 a month too much.

Now HMRC has acknowledged that there is a problem.

And then there's the phones...

HMRC failed to answer about 44 million phone calls last year, according to Whitehall's spending watchdog.

The National Audit Office called the performance of 31 customer "contact centres" during 2008/09 "unacceptable".

Money Box listener Andrew Currie describes his efforts to talk to a real person at HMRC.

The programme hears from Mike Warburton, from accountants Grant Thornton. Paul Lewis puts the issues to Claire Merrills from HM Revenue & Customs.

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Since 2004 banks are committed to offering basic bank accounts for people who want to ensure that they do not overdraw their account.

But 6 out of 17 basic bank accounts surveyed do not provide a debit card, according to latest figures from the Financial Services Authority.

Debit cards allow customers to pay for goods electronically in shops and online.

This lack of access to basic banking services is being blamed for the rising number of people who have benefits loaded directly onto pre-paid cards.

Although charges vary, card companies may charge to have benefits paid onto cards, to take out cash, and often a regular fee as well.

But Money Box listener Gordon Wilson from Glasgow, says he has been refused a basic account by RBS, Natwest and Bank of Scotland on the basis of his credit record even though he is not seeking credit, and has not been declared bankrupt.

Banks can refuse a basic account to people who are bankrupt or have a history of fraud.

Gordon does not use a pre-paid card, but says his lack of payment options has left him walking around Glasgow with up to £1,000 cash in his pocket.

Francis from Liverpool says his basic account does not allow him to pay direct debits; he uses a pre-paid card to pay utility bills.

Presenter Paul Lewis puts the issues to the Government's lead on Financial Inclusion: Exchequer Secretary to HM Treasury, Sarah McCarthy-Fry.

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Annuity rates falling

In the week that the Equality and Human Rights commission called on the government to scrap the default retirement age to allow people to work for longer, there is some sobering news for anyone buying an annuity now.

Rates are continuing to fall and it seems standard annuities are performing worse than enhanced annuities which pay higher rates, usually to people in high risk health groups.

But why?

Money Box hears from Aston Goodey, director of sales and marketing at retirement income specialist, MGM Advantage.

Related information:

A happy 10th birthday for with-profits bonds

If you bought a with-profits bond at the turn of the millennium, there are 364 days this year where you could face a penalty of up to 20% if you cash it in - £2,000 on a £10,000 policy.

But an estimated hundreds of thousands of customers will not face a penalty if they cash it in on the exact date of the 10 year anniversary of the policy.

Many people who bought a with-profits bond 10 years ago are being urged to dig out their paper work and check the exact date.

Strategy director of financial services firm Skandia, Michelle Cracknell, explains the details.

Related information:

BBC Radio 4's Money Box was broadcast on Saturday at 1204 GMT and repeated on Sunday at 2102 GMT.

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