Email sent to my MP over housing benefit chaos

I sent this email to my MP to request help with our chaotic benefits situation. I thought I would put it here as it may be interesting to some of you.

To: Peter Luff MP
CC: South Worcestershire Revenue and Benefits Shared Services

Dear Mr Luff.

I am writing regarding our situation with Housing Benefit and Council Tax Benefit. Our reference number for this is xxxxxxxxxxxxx
We have repeatedly requested that our benefit paid since the last tax year be re-assessed in full. This is because of reasons set out below. Most recently, we have been sent a letter (dated the 15th of March 2011) which stated “As your household has had many changes to your income over the last twelve months resources do not allow for further analysis of each period to be made.” This is absurd, as we requested this analysis precisely because our income has had so many changes, and we are certain that mistakes have been made. This same letter included copies of all our award letters for the past year, a bundle half an inch thick, with the implication that we should work it for out ourselves. This despite us having no information as to how to calculate these benefits.

Over the past year my wife, xxxxx xxxxxxx, has had a mixture of Job Seekers Allowance and temporary work from several different job agencies. Rather than stay on JSA she has continually made the effort to take work whenever possible, and since little teaching work has been available much of what she has done has been cooking and cleaning work. She has followed all the rules, and all work done has been reported to the Job Centre and to the Council Hub, and payslips have been copied to both continuously over the past year.

As a result, our housing benefit, council tax benefit and job seekers allowance have varied wildly. There has been confusion on many occasions due to her having multiple employers and we have even had benefits stopped while they await P45 forms that don’t exist because she has not actually left any agencies to work for another. We have been over paid and had it clawed back, underpaid with no apology for the times when we have missed our rent as a result.

I myself have had no income because I have been running a startup company which has not yet paid wages, and since Christmas I have been seriously ill and confined to my bed after an M.E. relapse. I am claiming ESA for this.

We are being taken to court on the 13th of April for the non-payment of council tax which I believe should have been covered by council tax benefit since in the period covered my wife had hardly any work and I was sick. This impending court case is causing a lot of stress for me and is having an impact on my recovery.

We have tried to play by the rules, take work whenever possible (I even started my own business as M.E. makes me otherwise unemployable) and report all income, but we are being penalised for it. It would have been easier for both of us to stay on Job Seekers Allowance and have a nice stable income with no shocks.

We would be grateful for any help you could give in getting our income and benefit payments for the last year properly assessed using all the available information. I would also like to thank you for intervening when my wifes CRB check was delayed for several months, as without this she would have had no teaching work at all.

Thank you for your time.

Moving house

I’m living on Employment Support Allowance (ESA) and because of that I receive Housing Benefit to pay the rent. Now my wife and I are being forced to move house to keep costs down. According to the rules, as a couple with no dependant children, my wife and I are only entitled to a single bedroom, and therefore they will only pay a maximum of £103.56 per week. (£448.76 per calendar month) We currently live in a two bedroom flat which costs us £121.15 per week (£525 pcm) so there is something of a shortfall there and we are struggling to pay the rent. Additional problems with our housing benefit are making things even harder. (My wife is registered with seven different employment agencies ranging from teaching to cleaning but still barely gets two days work per week, and the council can’t cope with variable income from multiple sources.) We went to look at a place earlier today. It’s too small, has no storage, smells of damp, and is next to a noisy main road and a noisy pub, but we will probably have to take it.

So why shouldn’t we have to move house? Well to start with, we can’t afford it. I’m sick and claiming benefits and my wife has so little temp work that she is claiming Job Seekers Allowance this week. Where am I going to come up with agency fees of £396? On top of that, we have to cover the costs of a months rent and a deposit in advance, at least until we get our deposit back from our current home, so that’s another £1,000, plus find money to purchase a fridge, a washing machine and a wardrobe, because our current ones came with the flat and the new place doesn’t have them. That’s at least another £200 even if everything is second hand. We’re a month behind with our rent, how the hell are we supposed to find £1,600? We can’t. We’re utterly reliant on other people giving us money to even contemplate moving at all. And if we don’t move then we still have to magically find £75 per month from nowhere, even before we allow for the catastrophe that is our housing benefit calculations.

Then, there is my care and support. On the rare occasions when my wife does have work, I’m on my own. On a bad day, which is a lot of them right now, I can’t even get out of bed. I’m on my own for getting food. Fortunately, I live next door to my sister, and five minutes from my parents. I currently rely on my sister to help me nearly every day. When I had a hypo and ended up in a heap on the floor, minutes away from blacking out if I didn’t get help, I was able to call for my sister to rescue me. Once I have moved house, I will be at least ten minutes, probably fifteen, away from help from my mother or my sister. If I collapse in a heap, and somehow manage to get to a phone, I will be more likely to call an ambulance than family. How much does does it cost to send out an ambulance? Who will bring me food and drink and help me walk to the bathroom in future? If my family can’t easily provide that help, I might be asking the council to provide care in future. How much does that cost?

We already moved from a very large flat into a slightly poky two bedroom flat, and threw out loads of stuff during that move. Now we have to throw out pretty much all of the rest of our possessions to fit in a one bedroom flat. Admittedly we do use the second bedroom largely for storage and drying washing, but it is basically space that we need and use. The new place has no room to set up our computer table either, so if my wife does get a teaching job, she has nowhere to prepare or mark school work. When she gets occasional work marking exams, she will barely have room to do it. If I recover enough to work from home, I won’t have any space to do it in. In all likelihood, this will prevent me from going back to work, and will not allow me to slowly return to activity. I basically have to recover enough to work from my office again before I can go back to work. Without building up slowly, recovery is less likely. Even moving house is going to set my health back weeks.

All this ranting isn’t going to change anything, of course. The bureaucracy says move, and so move we must. Future problems be damned.

Banks, tax, and offsetting losses

The Telegraph today is reporting that Lloyds will not pay corporation tax until profits hit £15bn. This has been met with outrage and taken as a further sign of injustice in favour of the banks. I must disagree. While I think the banks should be held responsible for their actions which crashed the economy, in this case they are not even using loopholes, simply doing what they are meant to do.

So what are the banks actually doing to avoid so much tax? They are offsetting their losses against future profit. Here’s how it works.

Imagine a small business that made a £10,000 profit last year. The tax on profits for a small business is 20% so they will pay £2,000 in tax.

The following year, the recession hits them and so they make a loss of ten thousand pounds. Unfortunately tax doesn’t work in reverse and they don’t get two thousand back from the taxman.

That doesn’t seem fair, does it? Well to balance things up, the rules allow a company to take that ten thousand loss and offset it against profits over the next five years until it is used up.

So, in the 3rd year of our example business, they return to profit and make £5,000. They should be liable to pay £1,000 in tax on that profit. Instead, they offset it against the £10,000 loss and pay no tax. The remaining £5,000 of the loss is carried forward for future years.

Finally, in the fourth year, our business makes £10,000 profit again. The have £5,000 of their loss remaining, and so they pay no tax on the first half of their profits, and they pay the full 20% on the second half of their profits. Their tax for that year is £1,000 instead of £2,000.

Enough about small business, what about the banks?

Lloyds and the other banks are applying exactly the same rules about losses and tax as smaller businesses do. We are outraged because of all the other loopholes that the banks use such as overseas subsidiaries and tax havens, and because we have paid money in to these banks in the form of bailouts to the tune of at least £850bn. ($2.4tn if you believe the BBC, but according to this government document no one really knows.) and yet we are not getting tax in return, and because the banks caused so many of our economic problems in the first place. The public are right to be outraged over banks paying minimal tax on their profits, but in this case the anger has been directed at the wrong thing. (For the record, I am in favour of prosecuting the banks for their actions, and have never been in favour of bailing out the banks. Let them fail.)

That is not to say that the ability to offset loss against future tax is entirely fair though. What if, for example, BP attempted to offset their losses resulting from oil spills against their UK tax? Given the environmental damage that they have inflicted and the strong likelihood that wilful negligence contributed to the failure of their equipment and structure, I am firmly of the opinion that it would not be right for them to offset. There is a good case for restricting the offsetting of losses incurred overseas too. Perhaps we should consider preventing the offsetting of losses incurred as a result of negligence or deliberate policy.

One last question to leave you with. RBS has just paid out £950m in bonuses despite incurring losses of £1.1bn. Should they be allowed to offset that £1.1bn loss against tax next year?

Thanks to Frances Coppola for the discussion which prompted this blog post, and to @Puffles2010 and @ntlk for help in finding the numbers.

The government have sold us out

“Our political system protects and enriches a fantastically-wealthy elite, much of whose money is, as a result of their interesting tax and transfer arrangements, effectively stolen from poorer countries and poorer citizens of their own countries. Ours is a semi-criminal money-laundering economy, legitimised by the pomp of the Lord Mayor’s show and multiple layers of defence in government.” George Monbiot

Since the Conservative government came to power I have been trying to understand the reasons for their actions that I disagree with so much. I have wanted to find a balanced view of what is happening, and tried to convince myself that they really think that what they are doing is for our benefit. I have been assured by my own MP that he thinks that despite the changes to benefits and the cuts to public services, the vulnerable are protected. I wanted to believe that the government thought they were fixing the economy, even if I disagreed with their methods.

I was a fool. The government are lying to us and they know exactly what they are doing.

The headline you will probably have seen today is Government to increase bank levy to £2.5bn and if you read the article you will see that the banks are “livid” about it. It looks like the government is actually doing something about the injustice in our tax system. In fact, it will raise just £800m extra in taxes.

The problem is, that £800m gain will be completely wiped out by what George Monbiot has called “the biggest and crudest corporate tax cut in living memory.

David Cameron told us that while he would like to cut tax, the country is in so much debt that we just can’t. Despite this, he and his government plan to quietly adjust the tax acts of 1988 and 2009 to scrap the requirement for large companies to pay tax in the UK on money earned abroad but not taxed at our levels. We will become one of only two countries in the world that does not charge tax on money that has passed through tax havens. The changes to the law will apply strictly to vast multinational corporations such as banks, oil companies and worldwide communications companies. The quantities of money involved will make even the £6bn of tax that Vodafone wriggled out of look like a pittance compared to to what our economy will lose now. This isn’t just about money either. These changes will make it pay to send jobs abroad too, and many more people will join our unemployed on the scrapheap.

Whose idea was all of this? The government consulted committees about changes to corporate tax law. Here’s some businesses that had representatives on those committees: Vodafone, Tesco, BP, British American Tobacco, HSBC, Santander, Standard Chartered, Citigroup, Schroders, RBS and Barclays.

We did not vote for the changes. This was not in any election manifesto. This was not in any party policy documents. As far as I know, it was not discussed at any party conference. The changes here amount to nothing less than vandalism and theft.

Our government is giving money back to the super rich at the same time as selling off our health service, privatising our education system, removing vital income from the sick and the disabled, cutting care services, killing libraries, even getting rid of public toilets, and much, much more. They are not your government. They exist to serve the filthy rich. Most of the cabinet ARE filthy rich, and they are treating you with contempt.

If you are not angry about this, you should be. If you are not already prepared to stand up and protest, start now. If you are not telling the government that we don’t want this, you deserve what the government is going to do to you. Find an action group. Start your own group if you can’t find one locally. The TUC are organising a massive demonstration on the 26th of March and we should support it. If you can’t physically join a protest, campaign on line. Join a campaign, get involved and say no!

Resources

UK Uncut

National campaign against fees and cuts

False Economy

March For the Alternative

A sense of entitlement

This headline annoyed me. “Gaming industry lose ‘billions’ to chipped consoles

Big business and media companies frequently complain that piracy loses them vast amounts of revenue, a cry which all too often is swallowed up by the news media and wheeled out as headlines.

It’s rubbish.

Copyright violation (call it by the proper name please) costs businesses nothing like the amount that they claim it does. So what if copying a game, film, song or piece of software gives nothing to the creator at that point? In the vast majority of cases the person that copied something was never going to give the publisher any money. They either would have gone for a cheaper alternative, or they would not have paid for anything at all.

This idea that a copyright holder is losing out comes as part of a larger sense of entitlement that seems only to be held by rich people. When they see something getting popular, making money or not, they think that they ought to be getting some money out of it. This happens even when they had nothing to do with it!

There is a very strong argument that people that copy things actually generate extra income for the copyright holders. People that download a lot of music and video tend to purchase more music and video than those that don’t. People that copy software often then recommend that other people get, and usually pay for, that software, or may use a copy at home but pay for a version for work.  Photoshop is a common example of that. I’m sure Microsoft is quite happy when teenagers and students copy Windows and various development tools, because it means that they learn on those systems, and later go on to purchase and recommend those systems later in life. Microsoft has even been known to give away copies of these things to students at university in order to hook them.

Patent trolls are another example of this inflated sense of entitlement. There are companies that exist purely to gather up patents and copyrights purchased at low prices, wait until someone builds a business on principles affected by those patents but not say anything, then years down the line, suddenly threaten a lawsuit unless that business pays royalties on all of the affected products, past and future.

The concept of net neutrality is needed because of another example. Take the scenario of a person at home watching a Youtube video.  The consumer pays Internet Service Provider, which we will call ISP A. The content provider pays ISP B. Both ISPs link in the middle. In the UK the link up is often at Telehouse in London. Currently, those two ISPs have an agreement to carry all traffic from each other because it balances out. But now, ISP A is demanding money from content provider to transfer information to consumer. If the content provider doesn’t pay, ISP A could slow down their traffic while speeding up that of another content provider that did pay, or worse, just dump their traffic. But hang on, the consumer has already paid their ISP to carry traffic from the content provider! ISP A is effectively taking bribes to sell out their customer.

With internet providers selling out their customers, big businesses using overly broad patents to kill innovation and small business, music copyright holders demanding extra money to use a song that you have already purchased on your MP3 player instead of a CD, and many other examples, be in no doubt that big business and its rich owners are not working in your interests.

Teetering on the edge

Starting a business seems to be a bit like standing on the edge of a cliff and not quite falling off.

I’ve stepped right out of my comfort zone, and am wobbling about on the edge of the cliff. As I get more customers, more contracts, I am building up the business around me but step too far ahead and I will go crashing down, never to be heard from again. Half of business seems to be having the guts to ask for the work. I have to learn  to price my services appropriately, allow enough time for the work, then march up to the customer and say “You need x service, y product, and it will cost you z thousand.” Amazingly, when I do that, it works! The problem is, I agonise over every detail, don’t allow enough time, charge too little, and then worry that I am trying to sell the customer something they don’t want.

Things are changing now though. We are beginning to get enquiries, requests for quotes, referals. Suddenly starting a business is like a roller coaster.  The long, slow, tedious build up. The fear as you reach the top. The rush, the adrenaline as you suddenly shoot forward in to the unknown, the big loop turning your world upside down. But then, you come to a halt at the end of the ride. And you want to go again and take everyone you know on it too.

Argh panic panic

I’m nervous. I can’t sleep.

In a few hours my dad and I will visit a customer and present the findings of our first real consultancy work. If all goes well it will lead to several thousand pounds worth of sales and an ongoing contract. You know, almost as if this is real and I’m not just playing at it.

Getting this work will mean that we go from loss to break even, that we can not only pay our bills but also take out some of our expenses. Maybe even wages! All within our first year too. More than that, it also marks the transition from having time to waste to being too busy. We actually have several ongoing jobs at the moment and this week our advert and article go in Vale magazine. If we’re lucky then this week is where the business becomes reality.

Nervous? I’m bloody terrified!