Nicholas Blackburn | Hearth Tax

Decorating Your Home for Spring with your Tax Refund!

Posted on February 10, 2020 by Nicholas Blackburn

Spring is just around the corner which means a few thing: better weather and for most of us, a tax refund.

With better weather upon us and more time spent outdoors entertaining, why not use your tax refund to spruce up your home!

In this article we are going to share some ways to decorate your home using your tax refund to show off your space with tables, Outdoor Chairs, Firepits and Outdoor games!

Here’s the best ideas for decorating your home for Spring with your Tax Refund:

Picnic Tables

Add a place to sit and entertain your guests over a backyard barbecue with an awesome and affordable picnic table.

These not only look nice, but they are a table and seating all in one.

This saves space and is budget friendly because you don’t’ have to purchase seats separately.

Via Home Depot

Picnic tables come in so many different sizes and colors and are a classic outdoor furniture piece.

They are also built to last and withstand the elements making them the perfect outdoor furniture investment piece.

Outdoor Chairs

Perhaps you have a front porch or smaller area where you don’t need a table, adding some comfortable seating will create an inviting space for you and your guests.

Wake up and head to your porch to enjoy the view while sipping a hot coffee or end the evening over conversations to a sunset.

Adding some comfortable seating will complete your outdoor areas.

Checkout a great selection of outdoor chairs seen here at Style Within Reach.

Firepits

Circle around a firepit for conversation with friends and family.

If you have enough in your tax refund, you can purchase a few chairs and circle them around a firepit like this one we’ve shared below.

Many people think firepits are expensive, but you can actually find really affordable and nice options online like this one from Target that is well under $100!

Via Target

Make the fire big or small but keep it safely contained with a firepit.

The great thing about a firepit that is not built in ground is that you can move it around, keep it indoors during winter months, and use it year round!

Outdoor Games

One final way to spend your tax refund on your home this Spring is by adding some new outdoor games to your collection.

Here are a few that are extremely popular and loved by consumers!

Spikeball is one of the greatest lawn games ever invented because it is easy to carry, setup, and play and provides endless fun!

Spikeball 3 Ball Kit Via Amazon

Our second favorite game is a good ole classic Cornhole game.

This game is great for all ages and can be easily packed up and stored inside on rainy days.

Via Amazon

Cornhole provides ours of fun with friends and family at tournaments, tailgates, holiday weekends, cookouts, campsites, and more!

Hopefully this article gave you some fresh ideas on how you can spend your tax refund to spruce up your home this Spring and get ready for all of the outdoor entertaining the better weather will bring us!

Tips for Using your Tax Refund For a Car Loan

Posted on April 15, 2019 by Nicholas Blackburn

Tax season is here and if you’re waiting for a W-2 or you’ve already received one, you may be thinking on the ways you can use your tax refund for a big purchase like a car for instance. If you’re not financially set for a vehicle at the moment, you can use your tax refund for an auto loan! Below are the options that you can consider.

Option # 1: Use the Refund to Purchase a Car

If the thought of leasing or financing a car is running in your mind right now, your tax refund is going to be a good way to finance the down payment or use it as a capitalized reduction of the overall cost. In the world of auto loan and financing, a bigger down payment can significantly reduce the payment that you’ll be doing each month and even lower the interest rate. This would make your auto loan a lot more affordable. Even with poor credit as long as you put the money down first, you can easily get approved for a loan. If you are going to lease, a capitalized cost reduction or the down payment for a lease would help you do pre-payment for the lease and lower the monthly repayment rate. It also helps you save precious money in the future.

It is even usually required by lenders who are in the subprime category. If you’ve received a tax refund that is able to cover the required down payment, you can choose to use that amount. You can even apply trade-in equities if it’s available or combine the tax refund with it so you can place a larger down payment. It all depends on how much the lender requires as the down payment amount and how large your tax refund is.

Option # 2: Use the Refund the Car That You Currently Own

The tax season is a common time where people purchase a car but if you don’t want to use your tax refund for getting new wheels, you can use it to make your current auto loan more affordable instead! Here are two ways in how you can use the tax refund for this purpose:

Pay Down Your Current Auto Loan – You can always use your tax refund to make extra payment for any loan that you have. This would significantly reduce interest rates and help you save money. In case you have equity in your vehicle that is on the negative range, you can use the tax refund to get yourself out of that problem.
Use it to Refinance Your Current Loan – If you currently have a bad credit auto loan and you’re charged high interest rates, you can use the tax refund that you received to lower the balance that you owe. It helps refinance the loan that you currently have so you can get lower repayment rates and better interest rates.

Help For Those Having a Hard Time Finding a Dealer

You have the control on the way you would use your tax refund. If you want to use it for a car purchase but you’re worried of the bad credit that’s looming on the horizon, we want to be of help. Just post your comments below on the kind of problem that you have or those that you foresee and we’ll do our best to give sound financial advice which can help you today and in the future as you do repayments for any loan that you have.

A look at Surrey’s history and today’s tax climate

Posted on October 4, 2018 by Nicholas Blackburn

Surrey is one of the historic counties of Britain. The most striking thing about Surrey is perhaps the Surrey county cricket club, one of the first cricket clubs in existence. Surrey began as a fishing hub during the time of the Semiahmoo, Katzie and Kwantlen people, and the agricultural landscape is ever so prominent today.

We start from the early modern age when the Tudors occupied Surrey. It was an age of prosperity for the county, with great castles built in those parts. It was an important industrial hub, previous known for its blooming cloth and textile industry. Later, the iron industry took over and contributed majorly to the local economy.

Surrey was governed by a county council in the 1800s under Newington area. It’s 11 districts were spread and scattered across. However it was not officially a city until the early 1990s, when parts of the county were recognized under the Greater London area.

Properties here are governed by council taxes, as is the case with the rest of Britain. In the 1800s, the land taxes were administered strictly in the county, with people ineligible to vote unless they had paid their due land taxes. Later on, the need for land tax assessments were removed with electoral registers coming in.

We turn our attention here to a recent announcement on council taxes in Surrey. In February 2018, the local council voted to increase council taxes by an astonishing 6% on average, meaning that each individual should pay up an additional GBP 1.53 a week. The announcement came after a legislation from the central government in the end of 2017 that allowed local councils to hike the council tax independently.

The key reason for the increase in Surrey council taxes was as a result of widening definite and a lack of funding from the central government. As a result, alternative means of increasing revenues had to be identified. Government funding to Surrey had reduced by a net total of GBP 200 million in a period of 7 years.

The local government however aims to lead infrastructure and development projects that are both sustainable and can increase future revenue streams. This should enable a situation where the council taxes can be gradually reduced to perhaps less atrocious levels. We believe this is economically feasible.

3 market factors and trends that impact your property’s value

Posted on September 5, 2018 by Nicholas Blackburn

We always have the concept of an ideal home that we own. People use more or less a basic set of criteria to decide whether an investment in a home is justifiable. These criteria include things such as price, neighborhood safety, amenities, resources and happiness factor.

Beyond the basic set of criteria, it is also important to keep in mind future trends that affect the value of a property. This is because most people today don’t stay in the same property or house for their entire life. Normally you start off with a small house, upgrade to a larger one when you have a family and more disposable income, and finally downgrade to a smaller home during your retirement years.

This means that on average, you will buy and sell up to three properties in your lifetime. With that as the case, it is important to make the right choice at each purchase or sell decision. The right choice includes considering future trends associated with a particular property or neighborhood when you put in the investment.

Supply levels

With house building in the UK increasing by 20% annually as of 2017, supply is ramping up. When supply increases, price point lowers. Certain neighborhoods have more vacant land and have the possibility of having more homes. If few of these neighborhoods are located in far-off, undesirable places, it is possible that demand doesn’t match supply, and property prices overall in those areas decrease.

Mortgage rates

Mortgage rates also have an impact on supply, whose effect we saw in the above sub-category. Mortgage prices have remained at historic lows, and as per the government’s promise, will continue to do so. However, keeping a look at global trends is useful since that can cause unexpected ramifications to Britain.

Real estate as an asset

While real estate remains and probably will remain the most stable asset, the emergence of numerous alternatives can mean that investors increasing prefer other asset classes for personal and institutional investment. If your neighborhood has a huge proportion of properties that are pure capital investments and not residential purchases, it will be volatile to factors such as interest rates and emergence of alternative asset classes, all of which are beyond your control.

These trends are important to keep in mind. While you cannot control everything, think of a home as an investment as much as an emotional decision. We have published more factors to consider when buying a property in another post here: www.hearthtax.org.uk/property/3-factors-consider-before-buying-property

3 key reasons why the hearth tax was unpopular in Britain

Posted on August 4, 2018 by Nicholas Blackburn

The hearth tax was a revolutionary policy in the 1600s and set the trend for tax collection and proper recording. While at the institutional level it simplified and made transparent the entire process, the public reception was not very favorable. Read more about the introduction at www.hearthtax.org.uk/about/history.html

At the broader level, the tax system is adept at measuring wealth inequality and taking measures to bring down the levels. The system was fair in its design, as wealthier property owners paid twice as much as the average property owner. Property owners who owned properties worth more than 20 shillings paid 2 shillings in annual tax (10%) whereas the rest paid 1 shilling.

Let us begin by neglecting the most widespread cause of unpopularity, which is that tax evasion was no longer possible. This is not a reason that should at all be factored, as it is every citizen’s duty to pay tax. With transparency and proper recording of tax records, tax evasion could easily be monitored and eradicated.

It was not so much the design and the intent of the tax system, rather the execution and administrative complexities that made it unpopular at the time. The structure allowed the role of private tax collectors, who could enter homes and collect taxes, which were then passed to the crown. However, due to a lack of proper execution, there were cases where tax information was incorrectly passed on.

This happened when tax collected visited homes when people were away. In some cases, they tried to count the number of chimneys in a house from outside in order to determine the number of hearths. This resulted naturally in incorrect counting and wrong tax calculations. This created dissatisfaction and outrage among some sections of the community.

In some other cases, people would deliberately not answer the doors when the tax collectors came, to avoid paying taxes. The same outcomes resulted from such situations, although in this case it is hard to blame execution. You cannot forced someone to enjoy paying taxes!

There were also loopholes that were fully exploited by citizens. For example, in those times it was possible to evade tax by declaring yourself to be poverty-stricken. Such declarations were easily possible by downgrading to a home worth very less, which would indicate that you are poor. These was no comprehensive check on all means of finances at the time.

The situation could have been tackled in various ways, mainly by proper communication. When the tax was introduced, the full disclosure of what the tax revenue will be used for, and what kind of future benefits it could produce to the very same citizens that pay up initially, would have resulted in relatively more willingness to pay taxes. These are lessons for the future.

It’s not just tax, governments have other revenue sources too!

Posted on July 2, 2018 by Nicholas Blackburn

Let us begin with macroeconomics. All of us have studied this at some point or the other. Macroeconomics presents the concepts of tax, public spending, deficit, trade imbalances and recession. These concepts are crucial to understanding the current economic context.

Every institution, individual, company or government has sources of revenue and sources of expenses. When it comes to government, the key revenue source is taxation. Taxation can come in many forms – income, capital gains, property, wealth, inheritance, pensioners and corporate. With each of these tax types, there are usually different slabs catering to different categories of taxpayers.

Why is tax important? Let us begin with the annual budget. At the beginning of every fiscal year, the government releases an annual budget for its expenditures. Expenditures range from key categories such as trade, education, social service and infrastructure, to minor categories such as foreign aid and presidential /royalty expenditures. All these expenses are meant to serve the citizens of a nation, ergo are funded by the citizens’ income.

When there arises a situation wherein tax revenue exceeds expenditures, you have a fiscal surplus. And vice versa, when revenues fall short of expenditures, you are faced with a fiscal deficit. While both situation are not ideal, fiscal deficits can potentially lead to more disastrous consequences. When governments try to win the popular vote by reducing tax when they are not supposed to, their fiscal situation becomes unstable and they can fall into serious debt issues.

It is obviously important to keep a balance between fiscal stability and the overall public health. This is the reason why tax has not just one lever, but several. When there are looming threats of wage disparity or unemployment, you move the levers of taxation such that the policies don’t negatively affect the middle-class or lower income earners. When you are faced with the threat of domestic investors finding the local situation a tad too unfair and moving their investments abroad, you adjust (to an extent) levers that affect the wealthy such as wealth, property and capital gains taxes.

If the government would like to keep tax rates intact and still is in dire need to raise revenue, there are always other sources. However these need to be planned in advance and cannot be exploited as easily as tax levers. Two additional revenue generating means for the government are trade and external loans. In times of surplus, governments can consider issues loans to foreign institutions or governments to rely on a predictable interest stream for the future.

There is also trade. Countries like Germany enjoy the flexibility of tax adjustment decisions due to the immense trade surpluses that they enjoy, Naturally trade surpluses have their own pitfalls, but when it comes to revenue sources they are as good as any. So citizens, take note! When you are doubting the effectiveness of a policy designed to increase revenues, it is good to have the full situation known.

The challenges of property tax in developing countries

Posted on June 25, 2018 by Nicholas Blackburn

When it comes to developing countries, every is complicated. Setting up a system and administering it is not an easy job. Most developing countries have a problem when it comes to population density, which complicates the issue further.

Property tax administration is no exception to this rule. Developing countries face rampant corruption and bureaucratic nightmares. The concept of Black money, commonly termed so in countries like India and other parts of Asia, is especially prevalent in property investment transactions. Black money is the concept of money on the table that is not revealed to government officials so as to avoid taxation.

Let us assess the current scenario. Property tax is a difficult tax structure to govern and administer, unlike more straightforward cases like income taxesor sales taxes for a chiropractor in virginia beach. It depends on three factors to function – Decentralization, administration and visibility. Property taxes function best when they have a high degree of decentralization and are independent in nature, something that is not the case in most developing nations.

In terms of administration, property taxes are expensive to maintain and difficult to modify. It is closely related to visibility, wherein once after you introduce a modification it is not so easy to track the effects of such a modification. It is hard to punish delinquency as there aren’t many “fair” punishments. If you seize a land, this becomes an extreme form of punishment that can be met with political retaliation. Cutting of utilities, something that has been tried in some nations, doesn’t work well as well.

At the same time, abolishing or replacing property tax doesn’t make sense for a government. They are revenue generating and fair means of jurisdiction. They create a sense of equity and fairness. Wealthier people who own multiple properties pay more tax to prevent them from purchasing even more and driving up home prices.

Which means the only solution is efficient reform. In countries where manpower is not available or not efficient, technology is the safest bet. There is an immense initial task of identifying and tagging each property or land space that is present. This is being done currently in Bangalore, India, where unique property identification numbers are linked to tax records.

While technology is a good starting point, there needs to be a concerted effort from elected officials and tax officials. Central governments should ensure that the administrative process is not complicated, incentivize local officials to collect tax and not engage in bribery or other forms of corruption.

And finally, incentivize citizens to pay tax by reducing bureaucratic hassles. Payment in post offices, banks, selected convenience stores and online means are good starting points.

A look at the history of Income tax in Britain

Posted on May 16, 2018 by Nicholas Blackburn

Income tax is the most common means of tax that we are used to. As the name suggests, it is a tax on the income earned. It is the greatest example of socialism in today’s world and is based on the principle that everyone who receives income has an obligation to provide part of it for the cause of the greater good.

In this post, we look at the historic context of income tax in Britain. It was first introduced in 1798 by William Pitt the Younger. The intention of this tax structure at the time was to raise revenue to buy military equipment for the war with Napoleonic France. In a sense, people contributed part of their income to the crown to ensure the safety of themselves and their fellow citizens.

When it was introduced, it was quite nascent and its objective was to raise an annual revenue of GBP 10 million. It resulted only in 6 million in reality. One of the reasons was that at the time of introduction, the tax only applied to wealthy people above a certain threshold. Later, however, the threshold was widened to increase the collectible revenues.

With time, its structure was solidified by adding many of the concepts we can see today in modern Britain. For example, the concept of debiting the tax directly from source was introduced in 1803 by Henry Addington. There, however, remained a controversial aspect of implementing a tax during times of war. This became especially significant after the historic battle of Waterloo, when people were poorer and the tax came as a heavy burden on them.

As a result, the tax was repealed in 1816. But as is always the case if you recall basic macroeconomics, tax appears in significance when there is a widening deficit. This was exactly the case in 1842, when the tax was reintroduced. To avoid earlier controversies, it applied again only to the rich, and remained so for many, many years.

The colonial era began and the sources of tax began to shift increasingly towards the colonies, especially wealthier ones at the time such as Africa, United States and India. British citizens enjoyed a period of prosperity, unburned by the shackles of taxation. We can say with certainty that tax was not a public burden till the beginning of the 20^th century.

The 20^th century saw the rise of significance of taxation, especially due to the universal appeal of socialism as a way to reduce widening inequality. Of course, there was also the contentious issue of military spending during the two major world wars. The tax rate became 30% by the end of the 1^st world war and covered an average on 10 million British citizens.

The tax rate has stayed at these levels and has increased further. IT shows no signs of slowing down. Across Europe, a range of 30%-50% is the new normal today. One can only wonder what the situation would have been had there been no wars.

3 factors that you should consider before buying a property

Posted on April 15, 2018 by Nicholas Blackburn

Most of us own a property or aim to own a property in the coming years. Since ages, owning a property has been a symbol of status, security and importance. Property is an asset that appreciates slowly but significantly over a period of time, and isn’t as volatile as most other assets. Well, assuming we don’t witness another sub-prime crisis of the extent of 2009!

Before starting the journey of property hunting, there are things to note including administrative processes, rights, taxes, responsibilities etc. We assume that you have read up on basic things such as prices, location significance, neighborhood and average price increases in the area. Let us look at some key items you should be aware of that the average home buyer doesn’t think of.

Interest rates

For a decade now, global interest rates have remained at a historic low. In the UK, it has hovered around the 0.5% mark. However, with reports that the bank of England is set to raise rates above the 0.5% mark, home buyers should exercise caution. Borrowing mortgages, especially considering the average price of a London house, and rising interest rates don’t go well together. Funding part of the investment with a downpayment is recommended.

Negotiation doesn’t end

There are cases where negotiations are finalized, a contract is signed and something new pops up during further home inspections. Remember that your negotiation when buying a property should always be active till ongoing inspections are complete. You don’t want to have unpleasant surprises after you move in!

Long-term tenancy

We know you want to have your own property, and we understand. However, owning a home comes with its own set of hassles. Consider, perhaps, an option of a long term tenancy, which can be available for 99 years or 199 years depending on where you are located at. It offers the same benefits of ownership such as security and stability, with less hassles.

These are just three aspects to consider before signing on the piece of paper. A thorough evaluation will ensure you don’t have regrets later.