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Interest Rates Increased to 5.25%
The Bank of England has taken further tightening measures to combat the ongoing challenge of inflation.
This marks the 14th consecutive interest rate hike for the UK, pushing rates to a 15-year high.
The move aims to curb inflationary pressures but has placed significant strain on borrowing individuals and businesses.
Latest Interest Rate News
The Bank of England has raised the UK interest rate to 5.25%, continuing its efforts to control inflation.
As of August 3rd, rates have been increased by 0.25%.
The last time the interest rate reached 5.25% was in April 2008.
Why Continuous Interest Rate Hikes?
In order to maintain the 2% inflation target, the Bank of England needs to continuously adjust interest rates to approach the target as closely as possible.
Simply put, raising interest rates encourages people to save money in banks rather than borrowing for consumption.
On the other hand, when the cost of borrowing increases, disposable cash decreases.
If households purchase fewer goods, it can slow down price increases.
Meaningless Rate Hike?
Even before the final decision was announced, protesters gathered outside the Bank of England’s headquarters to protest this “meaningless rate hike.”
They calling for the government to impose windfall taxes on bank profits.
While rising interest rates inevitably cause significant hardship for borrowers and families.
Banks have stated that savings rates will also rise accordingly.
Predictions of Continued Interest Rate Hikes
In addition to today’s rate hike decision, experts predict that rates will continue to rise.
They forecast rates to reach 5.75% by November and expect a potential interest rate decrease only by next summer.
The future situation remains uncertain, but this serves as a valuable reference for those considering buying a house through loans.
Loan Guidelines
Are you planning to take out a loan to buy a house recently?
Living and working in peace and contentment is everyone’s yearning. With the current high property prices in the UK, many buyers will prefer to use loans to purchase properties. This article hopes to let everyone know the documents that need to be prepared in the early stage of the loan and how to prepare these documents to help you go smoothly on the road to buying a house.
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We will make different plans according to each person’s assets and income.
Loan Type
Fixed interest mortgages
A fixed-rate mortgage is one that guarantees your interest rate will remain the same for a period of time.
This gives you peace of mind because, unlike a variable-rate mortgage, you’ll know exactly how much you’ll need to pay back each month during this period.
Variable interest mortgage
A variable rate mortgage is a type of home loan in which the interest rate is not fixed. Instead, interest payments will be adjusted at a level above a specific benchmark or reference rate, such as the Prime Rate + 2 points.
Apply for a personal loan
For personal loans, the loanable amount is generally 3-4 times of my income. For example, with an annual income of £20K, the loanable amount is between £60-80K.
So what kind of proof materials need to be prepared in advance?
Banks or other credit institutions will require the borrower to provide proof of income for 1-2 years, such as P60, SA302, Tax Calculation and Tax Overview, Year-End account, bank statement, if the borrower has other properties, they need to provide their real estate prove.
Proof of income
If you are an ordinary office worker and have no other proof of income or assets, the documents you need to provide are: P60, recent pay stubs, and bank statements.
If you are self-employed (i.e. self-employed), you need to provide Tax Calculation and Tax Overview or SA302 documents to the bank or lender for review
For the legal person or shareholder of the company, in addition to Tax Calculation and Tax Overview or SA302, the company’s annual account may also be required for reference
Generally speaking, a legal person or shareholder only needs to provide Tax Calculation and Tax Overview to a bank or other credit institution when making a loan; however, in a few cases, an additional SA302 will be required.
Our Customers
“It is a pleasure to work with a company we trust, and their service makes me truly experience the customer first.”
“My wife and I were planning to buy a house for a long time, but we didn’t know English law or how to get government help to apply for a loan. It seemed harder than making money, and it wasn’t that hard until we discovered this company. We got our bank loan and put in a down payment, and happily we’ll be moving into a new house soon.”
“We work everywhere to earn money, and after ten years we are finally starting to plan our first home. I checked a lot of information on the Internet and even called the bank and didn’t get a satisfactory result. Thank you for letting me know the loan strategy clearly, I trust you and choose you.”
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Personal tax returns are very complicated, the above is just a very simple introduction. If you have other income, such as rental income, stock income, foreign income, interest income, etc., these income must be included in your personal tax return. If you have any questions or other considerations, we welcome you to contact us at any time.
Meet Our Local Team | Accounting & Bookkeeping
Today’s post is going to be a bit different. Rather than giving you advice on all things tax, ecommerce and logistics, today we want to introduce you to a couple of members of our local team. We recently spoke to Danny, a senior member of the local team who deals with VAT accounts and PAYE services, and Livia, another senior member of the local team who deals with the submission of tax returns and internal operations. These two employees have a vast array of skills and experience in the domain of accounting, and we thought you might enjoy meeting them and benefitting from their expert opinions.
So, Danny and Livia, could you please give us a general overview of the services that the local team offers?
Danny: Certainly. For the most part, we at J&P offer the general services of an accountancy firm. This includes bookkeeping and the submission of our client’s accounts to HMRC and Company House. Occasionally, we also provide business plan support for businesses and their management accounts.
Livia: We also deal with VAT compliance checks. Since the outbreak of the pandemic the government have borrowed heavily and are keen to recoup some of this money. We are definitely expecting to see more and more tax investigations over the coming months!
How does this work with clients, do you talk to them directly?
Danny: Yes, we believe that talking directly to our clients is the best way to get a clear picture of what the client wants and this means we can solve any of their issues quickly. We communicate with clients in a variety of different ways. Of course via phone call is the most direct, but we are also happy to communicate to clients via WeChat if this is their preferred method.
Livia: Also, clients also come to see us directly in the office. Even if it is an unplanned visit, we always ensure we make time for our visitors and we will never turn a client away.
So would you say you have a good relationship with our clients then?
Livia: Definitely. We understand that trust is one of the most important factors when it comes to building relationships with clients and so we always ensure we are communicative and transparent with. We are always happy to offer them our expert advice.
Danny: Yes, I would have to agree. A lot of our new clients come to us from referrals from previous or existing clients so we must be doing something right!
That’s great to hear. The past 18 months must have been difficult for our clients; could you please tell us a little bit about some of the difficulties they’ve faced and how we’ve helped them?
Danny: Well yes, the last 18 months have definitely been difficult for clients due to Brexit and the pandemic. It is hard to give a blanket answer to this question as we support a wide range of clients and so they’ve all struggled differently. For example, the ecommerce sellers and importers have struggled with Brexit due to the need to register for VAT in more EU countries and obtaining EORI numbers. On top of this a lot of them sell on Amazon and Ebay so they’ve had to deal with the new regulations regarding online marketplaces.
As for our clients in hospitality the new paper work originally caused delays in shipments. We have followed the Brexit situation closely for years, and thus we have been able to guide or clients through the situation really well and have helped them get to grips with the new paperwork.
Thanks Danny, what about the issues that have faced from the pandemic Livia?
Livia: Just as Danny said with Brexit, we have had to accommodate all of our clients in different ways. In some cases, our clients in hospitality actually didn’t fair too badly due to the increase in deliveries and people ordering takeaways. However, our clients who own businesses such as hairdressers and beauty salons have struggled more due to the fact that they had to close for months on end.
Whilst the government offered a lot of support to businesses, we’ve found in some cases that our clients have struggled to pay back these loans on time. In these cases we’ve had to help our clients find ways to pay these back on time without incurring interest and informed them of all their available options, such as instalment schemes. We’ve been in constant contact with HMRC to ensure that our clients are able to find a way to pay back what they’ve borrowed in a way that suits them.
Thank you both, it’s really interesting to hear about how those two major issues have affected our clients so differently. Are there any upcoming issues that you think business owners or prospective clients should be wary of?
Danny: I think the two main ones are the increase in HMRC tax investigations. It looks like the government are really going to ramp these up, so business owners should make sure all of their accounts are compliant and should get in contact with us if they receive notice from HMRC that they are going to be under investigation.
Also, business owners and sellers should be checking when their repayments are due for any of the government support that they’ve received over the last 18 months. Late payments could result in penalties so make sure to check all your repayment dates!
That’s really good advice. That all but concludes are interview, before I let you go I just wanted to ask what you both enjoy most about working at J&P?
Livia: I think it’s the opportunity I have had to develop myself. Due to the wide spectrum of clients we support we have to deal with a variety of different issues and so we have to be innovative in our techniques for supporting them.
Danny: For me, it’s the satisfaction I get from helping clients. I talk regularly with our clients and it feels great when we are able to solve their problems. Also, I really like the working environment we have here. We have a really strong team who works well together which means we can provide the best service possible.
That’s great to hear. Thank you both for speaking with us today!
Hopefully this interview has given you an insight into how we do things here at J&P and the advice that our experts gave has been of some value to you!
If you are a UK business, we would be more than happy to provide you with accounting and taxation services, such as Company House registration, confirmation statements, and statutory financial reports. At J&P, helping small businesses is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the end of the Coronavirus crisis and Brexit, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
