Sarah Pennells 10092014

Welcome to Sarah Pennells’ personal finance column

Sarah Pennells is a personal finance journalist and the face behind SavvyWoman.co.uk. We think she does a great job at explaining financial subjects in a very clear and accessible manner. You can find her column below where she writes about the latest financial news, and helps you get more from your money.

Owed money by your energy supplier?

If you switched energy suppliers you may be due some money. Why? Because not all suppliers gave their customers their money back automatically if they were in credit when they switched to another company.

In February, the regulator, Ofgem, estimated that energy suppliers could have £400 million of their former customers’ money. That’s right £400 million sitting in their accounts.

Ofgem estimated that around half of this was from domestic customers (ie households) and the other £200 million was owed to businesses.

This week the big six energy suppliers have launched a website called Myenergycredit.com, aimed at helping people get their money back. I’ve just had a look at the website and all it does it direct you to the right part of the energy company’s site if you think you’re owed money. It won’t tell l you whether you’re owed money or help you get the money back.

SAVVYWOMAN/ SAVVY TIP: Under the rules your energy supplier should give you your money back within 28 days of you switching supplier. Don’t forget to send them a final reading.

Not enough interest in your life?

It’s a year (on the 16th!) since the banks made it easier for us to switch our current accounts. Seven day switching is sort of meant to do what it says on the tin: you can switch your account from one bank to another in seven days.

Research from one of the price comparison sites shows that most people are choosing to switch to another bank or building society so they can get more interest on money they have in their account.

At the moment, you’re doing well if you get more than 1.5% interest on an easy access savings account. But you can get up to 5% on money you have in your current account if you choose the right provider.

SAVVYWOMAN/ SAVVY TIP: Some banks and building societies pay a higher rate of interest – say between 3% and 5% – if you have a certain amount of money in your account. If you have less you may get a much lower rate of interest. Others only promise to pay the higher rate for a limited time, such as 12 months. Check before you switch.

Online trader jailed

If you sell things online for profit, you must make sure you tell HM Revenue and Customs what you’re doing or you could get a fine – or worse. Last week a man was jailed for two years after he was found to have a highly profitable CD, DVD and computer games business selling under the name ‘Globalworldentertainments’. HM Revenue and Customs reckon he received at least £300,000 that he’d not declared.

But what happens if you’re just selling a few items online to supplement your income? Or if you’re selling after you’ve had a clearout of your loft? This is what the rules say:

1. If you’re selling something you already own to get rid of it, it’s not a business and you don’t have to pay tax on the money you make.

2. If you buy or make something to sell, it’s a business and you should tell HM Revenue and Customs and register for tax self assessment.

3. If you sell things that you don’t already own, and make a loss on them, you still have to tell HM Revenue and Customs. There may not be any tax to pay, but it’s still a business you should register.

Child benefit tax letters

Staying with the tax theme…if you and your partner earn more than £50,000 a year each and you receive child benefit, you may have been sent a letter by HM Revenue and Customs. It’s written to around 30,000 high earners telling them to pay tax because they’ve been receiving child benefit.

The problem is that they may not owe any tax at all. Under the – complicated – rules that were introduced in January 2013, couples where one person earns more than £50,000 had to pay a tax charge if they wanted to continue receiving child benefit.

Where both partners earn more than £50,000, it’s the partner who earns the most who must pay the tax charge. And, unfortunately, HM Revenue and Customs didn’t know if the tax has already been paid someone’s partner, before it sent out its 30,000 letters.

If you have received one of these letters, it doesn’t necessarily mean you have extra tax to pay. Contact HM Revenue and Customs if you’re not sure.

You’re so vein…

How do you fancy the idea of scanning your finger to sign into your bank account? That’s not so the bank can check your fingerprints, but so it can recognise you by the pattern of your veins. Sounds a bit creepy and Frankenstein?

Well, the banks assure me that they’re not after your blood… apparently our vein patterns are as unique as our fingerprints, but the advantage is that it has to be a live finger that’s used to sign in (I guess that’s some consolation – although it’s conjuring up all sorts of images that I’m sure most of us don’t want to wrestle with).

The bank that’s currently trialling this technology says it’s too expensive to be offered to individuals at the moment (it’s only on offer to businesses), but who knows what will happen in the future?