Posted by Commie B on May 24, 2010 at 10:29 pm
Consumer, taxpayer, same difference. If you live in the UK (especially London), you’re constantly getting (mind the language, please) f#cked. I’ve been meaning to write about this for a while – ever since this recession story made headlines – ever since Lehamn Brothers and Woolworths went out of business, but I’ve got my own battles to fight.
Long since my reading about Fair Tax in the United States, I have been a fan of the Fair Tax Proposal. Fair Tax essentially states that you only pay tax when you buy something. This is great for the consumer; it means you spend carefully. Suppliers are motivated to provide better products and services or you could go international and the government has reason to support businesses – the former only makes money if the latter are doing well.
Although I’m not saying that the theory of fair taxation is a flawless one – it has yet to be put to test – the democratic economic system (or whatever the hell you want to call it – it’s certainly not capitalist), followed by primarily most of Europe or the UK, is nothing short of hedonism.
Most of the so called developed world, and Europe today is the leading continent with that title along with our American friends (as eastern nations witness the dark ages), financially and emotionally violate their citizens. Now I haven’t lived in other parts of Europe, so I will stop alleging that they are categorical cheats. However, it saddens me to say that the British Government, the parliament, the bureaucracy – they all function with this one motive – screw the middle man – many of these middle men are so silly they don’t realize they’re getting screwed over in the process. I am sure you all are already familiar with this and if you aren’t, well, maybe this will explain why neither the liberals nor the conservatives of Britain stuck to their principles come election time. They are all out to get you. That is their greater purpose.
OK, so I will build the entire argument on a £3,000 per month pre-tax earning. Let’s say you earned that amount this month. Now, we’ll assume that you’re not one of those compromising residents of London who’s decided to live in shared accommodation. If that’s what you aspire for, you’re most likely happy being ravaged. Some of us have a little more ambition than that.
Out of this £3000 you will end up paying over 30% in PAYE and National Insurance. Many will actually pay more than this. The small business gets penalized grossly for hiring British employees – the government’s first step to ruin the economy and promote outsourcing to the Indias and Pakistans of the world. So, back to our simple mathematics, you are now left with £2100 (if you missed it, that’s £900 for the government). Don’t know about others, but my council tax is about 5% of what I earn pre taxation. That’s another £150 gone. Now, let’s talk about VAT. Almost everything has VAT, with an exception to some of the basics. Say you spend £600 on taxable groceries. Out of this, you’ve paid 17.5% VAT. This means you’ve paid another £105 to the government. This means that so far you’ve been robbed of £1155 (that’s £900 in payroll taxes, £150 in council tax and £105 in VAT on basic household items). Now, if you have a car, you are spending another £15 a month on road tax. If you live in London, you most likely also need a monthly ticket for the tube. Now there’s no tax on the train tickets, but you don’t exactly have a choice but to buy this. It is the price you pay for living in London – pay for a seat on the tube you will hardly ever get. It’s generally called overselling and is punishable under the law (in a fair and just system) but on the London Underground it’s called ‘moving right down into the carriage’. What a load of crap – pay £150 a month to COMPROMISE on the tube. If you live in your own flat or house on that salary, you’re probably living in zone 4+. So that’s another £135 for the train pass. It goes to TFL which is a puppet of the government, so the money essentially goes in the political basket – God knows they don’t fix the trains or the tracks. Wait, we all know that.
Let’s do a recap. How much money has the government taken from you so far, between travel, groceries, national insurance and payroll tax? £1,305 out of £3,000. That’s 43.5%. Can you believe that? Pure tax or overhead for living in the UK. You get absolutely nothing out of this money. For every £100 you earn, you literally have to give £43.50 away. Now I know we’ll have those fascists out their who will claim that the UK is the ‘leading’ European country because Germany’s taxes are in the 50% range or Scandinavia is 55%. Well, let me tell you something: who gives a shit. We’re talking about the UK and London, so let’s stick to the topic at hand.
If you can manage to do much other than paying rent and buying a movie ticket or fuel for your car from the remaining 56.5% of f the money you have left, you’re probably living in shared accommodation. But read on, you’re still getting screwed.
So the fact that you don’t have much money left to spend is just the beginning of how you, the British consumer, faces the shaft. You have credit cards, a car payment, or mortgage, don’t you?
The government takes your money and invests with banks, pays ridiculous salaries to MPs, bureaucrats and council employees – many of which are hired to make sure you get threatened and penalized if you don’t pay these taxes. That’s what happens with your council tax pounds and that’s what has happened with the billions in rescue funding for banks.
So, what do the banks do with this money? They gamble and loan. The money the government takes from you and gives to the banks is EITHER loaned back to you for your mortgage, car, or in the form of a credit card or is loaned back to businesses (who may be your employer) for a hefty interest charge.
In the event that you are loaned the money, basically, the government has taken your money, put it through this ‘system’ of taxation and loaned it back to you with interest you will pay to the bank, who will then fund the election campaign with part of that money or loan the interest back to your employer who will then again deduct tax from your salary and pay it back to the government again, creating wealth from your poverty inducing 43.5%. Exciting, isn’t it. So you are not only paying 43.5%, but when you get that 43.5% back as a loan, you again pay your credit card or loan interest, in many cases up to 20% plus, back to the bank. So, in essence, you paid 43.5% + 20% of this 43.5%. So your 43.5% is actually costing you over 52%. It’s either this or some twisted denomination thereof.
Let me make this simple and clear. The government takes literally over HALF of the money that you earn. They then piss this money way on gambling, election campaigins and sham programs that have to do with community improvement or whatever rubbish they can come up with (I wish they actually implemented any of these!). In many instances, the government will give your tax money to the bank, who will then give this cash to another international bank, which will then loan the money out, at, say 20% and give your bank 10%. Your bank is making 10%, but they don’t actually have any of this cash. Hell, they’ve even take the money you’ve put in your savings account and gambled that away -all with the consent of the government. It may very well be that your bank has taken all of your money and loaned it to your friends in the form of credit cards. Because your friends are law abiding citizens, they default on the card payments - so not only is your bank unable to pay you the .8% interest it promised you in exchange for the 28% it was charging your friends, it doesn’t even have the original amount. So when you go back to claim the 50% of your salary that you had claim too, the bank collapses. Enter recession and turmoil. It’s also called horse shit.
Guess what happens next? 43.5% of your next pay cheque will go towards stablizing the bank. I don’t know about you, but from where I’m standing, you’re kind of, sort of screwed!
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Posted by Asif on March 30, 2009 at 10:29 pm
I have long been a critic of British Education. Of course, long is a relative term and here long refers to the last 15 months. My basic education is British. My University education is American. My professional experience is split between the United States, Dubai and the United Kingdom.
I’ve said it from day 1: American education is by far the best. Why? Because the US education system does not focus on students learning concepts or memorizing answers to questions. It is a system that does not focus on and is not centred around academic knowledge alone. American education gives you the tools you need to succeed in life, in business, and on the job. In this context, I am referring to American education at the University Level, better known as the Undergradute and Graduate programs at universities across the United States.
British University education, well, clearly sucks. With Metro highlighting the launch of a Masters Degree in Facebook today, London has reached a new high in the quality of pathetic intellect and wasteful education; education that represents nothing but a mere high-class insult to the likes of Charles Dickens, William Shakespeare, Oscar Wilde and others from the Golden Age of British education. That said, I understand why the general level of British University education is so low.
The entire system is politicized and is a victim of bureaucracy. Having a University degree means absolutely nothing when you go and look for a job; academic fraud and cheating is at an all time high, and professors boast about their out-dated, memory ridden testing styles that are supposed to prep their students for the 21st century. Specifically speaking, when it comes to business education, more specifically, accounting education, British degrees are about as useful as a second rate high school diploma from China.
How do I know, you ask? Well, I must say with some sadness, I’m an accountant. I’m an accountant educated and experienced in the US, who now has the pleasure of coming to the UK and having to go through the bureaucratic system of so-called professional education, which is, from a learning standpoint, garbage. British degrees in accounting are useless because whether you have one or not, you can sit through a 3 year course with ACCA, CIMA or ICAEW and become a so-called qualified accountant. So then, why would you want a British degree? If qualified and educated means having a certificate, why is a degree needed? Precisely! That is the stance that Universities in the United Kingdom have also taken. They have totally eliminated the need to learn and enhance one’s skillset from the curriculum; have turned a blind eye to the widespread academic fraud and are simply there to collect money from students.
Enter professional education bodies. Then you have the likes of CIMA, ACCA and ICAEW, who have stooped to the level of every other governmental institution. Britain is a currently that is hard-coded with the problems that make the third world nations of the world today, well, third world. Bureaucracy is at the heart of such disasters, Britain is fast headed that way. With institutes and certificates for everything, from trash management to facilities management to the auctioneers association to the certified breathing association, the English have developed a certification for virtually everything. The result of such widespread certification is that anyone who pays a fee and memorizes a bog-standard exam can go ahead and get one of these, which makes him/her qualified for a job. However, what most of these certificate holders or degree holders know is of little relevance to their jobs. That’s if they know much at all.
A little off topic, but Britain apparently came up with a workplace homicide act in 2007. Is it just me, or does parliament have too much time developing crap laws that accomplish absolutely nothing. Take today’s news: Jacqui Smith’s husband charged 10 quid worth of pornography to the government and half the nation lost it. What are these people, silly? You are worried about 10 pounds when Members of Parliament in England have come up with a second house allowance and other ridiculous benefits that allow them to claim hundreds of thousands of pounds legally every year? Again, is it just me, or is the education of British universities and institutions like CIMA clearly reflective in the populations reaction such news?
So, let’s get to CIMA. Why am I picking on CIMA? Management Accounting has always been a subject of great interest for me. Ever since I took my first accounting course in 1998 (that’s right!), I knew I wouldn’t be going into public accounting. I, therefore, very clearly understand the mission, purpose, goals, aims, objectives and benefits of management accounting. Accountants, in general, are supposed to be trustworthy: that’s why they can notarize, attest documents, etc. Generally, people are supposed to trust accountants. Of course, the likes of Arthur Anderson and KPMG have made headway in damaging the reputation of accountants; probably rightly so.
You see, accounting bodies should never stoop to the level of crappy standard that universities have. However, like every other bureaucratic branch in industry and government, everyone wants to make their own mafia and claim that they have it right, when they have nothing, except for a bunch of illiterate, pathetic, politically connected lobbyists. I’m sorry, did I say CIMA? That goes for all of them: CIMA, ACCA and ICAEW.
Now, since I am settled in the good old United Kingdom, I figured I might as well take a shot at one of these Certifications since according to everyone else who is a ‘qualified’ accountant in the UK, degree education is useless. Not that I really care about what others think, but in the UK bring qualified or certified is necessary, because the level of truth telling is so low that people will generally not believe much of what you tell them on your CV, but they will all buy into the lie of what these ‘professional’ institutions tell them. In essence, it’s an idiot proof system designed by insecure accountants who know they are idiots, and is pushed by a further qualified brand of idiiots. See how it works? Dumb patting dumber on the back and issuing dumber with a certification that makes dumber dumb.
Well, I’ve been reading up on some CIMA course materials and some of the content published by CIMA and their partners is, well, plain wrong. CIMA, for instance, claims that they offer education that no university offers, thereby offering enhanced professional education which makes it equal to an MBA. I’m sorry, but who the fuck is CIMA kidding? CIMA education is not extravagant, and if you have a degree from any half decent US University, there is nothing new for you to learn here, except for maybe a couple of concepts at the Strategic Level, none of which will be relevant to you in your job.
CIMA examiners and instructors ALSO claim that when grading papers, they are looking for students to use ‘keywords’ in their answers, rather than explain or justify the argument they are making or decision they are supporting. That equates to memorizing and is, well, what you’re supposed to require in 6th and 7th grade, not at a professional level. Not only that, CIMA openly claims that management accountants are not supposed to be systems experts, but must have apt knowledge of systems to understand the ramifications of and be involved in decisions made in companies regarding information systems. Well, if you’re not experts, the wise thing to do is to stay the fuck out of it. Not only does CIMA promote this unhealthy atmosphere in business, but partner Systems Institutes which are also victims of bureaucracy promote their specialty, and neither really give you any practical education, stirring a recipe for disaster. It’s this kind of education that causes the Ministry of Defence to wrongly pay several hundred thousand soldiers. Bad accountants who claim to know it all because they’re certified, and bad systems experts who claim to understand it all because an IS is apparently the be all and end all. It is this kind education that has, over the years, ensured that the UK will never become the leading economy, in terms customer service, innovation or process efficiency.
I don’t have a beef with CIMA, per se. CIMA is an average accounting certification that will not teach the seasoned, experienced graduate (from a decent country and a decent university) anything new. What you need to pass CIMA is to learn how to tackle their exams. What you need to understand while preparing and practicing for CIMA exams is that many CIMA examiners are not CIMA qualified themselves, which makes for even more of a make belief ‘good’ education and curriculum.
My only problem with CIMA lies in some of the ridiculously incorrect content that is part of their course. CIMA examines some aspects of information systems design that are plain wrong. Not only that, they go on to test some of these CIMA-developed concepts and terminologies, and instructors and examiners who have absolutely no clue about what they are talking about get to grade you on this stuff. As proof, I have a book that is supposed to contain questions and answers from past CIMA exams, and some of the answers have a long explanation of what the examiner is looking for. The answer ends with the phrase ‘powerful software solution’ followed by the examiners comments in parenthesis ‘whatever that means!’ That, ladies and gentlemen, is the quality of education being offered to you by a professional institute that claims to offer some of the most sophisticated business education in the country today.
It is no wonder then, that banks are collapsing and businesses are functioning on non-existent cash. Here’s a hot tip: go nail your educational institutions and education providers, who’ve been teaching wrong information with outdated syllabi that do not give the typical British graduate or certificate holder any ambition or tools to build a career with. What you are stuck with is: get your degree, get your certificate, grow old and get a pay increase with age. That is the path to staying twenty years behind the rest of the world in everything. That is path to killing creativity and promoting uncooth bureaucracy.
Oh wait, I almost forgot. Welcome to Britain. And I don’t hate it; it’s great! It’s just that many of the people are not with it, and that’s highly representative of the population of the planet. It is for the same reason that Americans elected and re-elected George Bush that the British keep following into the footsteps of such brain-dead, mind-numbing bureaucracy with every passing year. I have 100 pounds waiting for someone who can correctly tell me what that reason is.
Go on, have at it. What have you got to lose?
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Posted by Commie B on June 19, 2008 at 12:51 pm
When I was making my move to the UK, I had a very difficult time finding the right resources and the right guidance. It was very difficult to get hold of information like ‘how to open a bank account’, or how phone service in the UK works, or what are the best resources to look for work or accomodation. I’m now in my 6th month of arriving in the UK, and I think I’m ready to put a rather comprehensive guide for somebody moving to the UK (particularly London). Now, please keep in mind that my background (when making comparisons) is US, UAE and Pakistan based, so most opinionated statements here may not apply to people moving from other parts of Europe (if they share the same system as Great Britain does).
The Basics
So, you’ve finally arrived (I’m going to skip the visa, if needed, plane ticket, etc. etc. because if you’re unable to arrange that, this guide probably doesn’t apply). Now, what are you supposed to do next? Well, if you’re anything but normal, maybe you’d want to start with communications and finances to get going.
UK Mobile and Landline Telephone Services
Okay, if you’re new, the good news is that you can use almost any GSM/GPRS enabled cellular / mobile phone in the UK, and mobile phone service is very cheap to start with. You can buy T-Mobile, Vodaphone, O2 or Orange SIMs for a pound, and that means you can get started with the phenomenon of pre-paid or pay-as-you-go mobile phone service. Be weary of who you call though, because outgoing call rates are outrageous, sometimes costing as much as 20p a minute (which is approx. 40 US cents). Please be aware that, depending on your carrier, it may be cheaper for you to call the US than it would be a UK number from your mobile phone.
Also need to get a landline? Well, you don’t have much choice. Just like you were screwed with Etisalat in Dubai, you’re going to get screwed by British Telecom (BT) and their highly, incompetent, un-educated, not-trained, low-life customer service. But, if you want to live a comfortable life in London, you need a BT Line, because half of this so-called metropolis is not wired with cable, which means that everything (your phone, internet, TV etc.) will all eventually be delivered through your BT Line in the event that you live outside of Zone 1 or Zone 2 in London (which most people do). Getting a BT line is not so difficult, it’s ONLY painful; just visit bt.com or call them. Best of luck!
For pay month mobile services, you have contract and contract free options depending on your phone needs. Mobile phone service is expensive when compared with the US and some other countries, and if you are moving here from the States, get used to horrific customer service. The customer comes 3rd, not 1st, in the UK. Read all your terms and conditions whether it’s for your mobile or broadband service, especially when going with big companies like Virgin. They’ll try and stiff you whenever they can. In my opinion and experience so far, O2 has been good, both for mobile phone service and broadband. They provide reasonable quality and good, consistent pricing.
The Bank Account
This one is extremely important. The UK is a country where virtually every service you use has to be paid for by Direct Debit. So, chances are, no bank account, no internet, no TV, no BT Line, no monthly mobile/cell phone service, no life. But here is the kicker, to open a bank account, you’ll need a utility bill in your name for proof of address, or you will need a foreign bank statement (from your old bank) addressed to your UK residential address. That doesn’t happen at many international banks, so you’re basically screwed when it comes to proof of address.
Also, almost every UK bank will require you to have a job before you can open an account (how pathetic is that!). Can’t get paid without a bank account, and can’t get a bank account without getting paid. I wonder who came up with these pathetic rules. NatWest is probably the only bank which will allow you to open a full checking / current account without a job, which means you can have a cheque book, debit card etc. with it. Steer clear of the introductory accounts, which only give you an ATM card. They’re absolutely useless and are the banks’ way to take your money and restrict your access to it.
If you already have a job line up when you move to the UK, a letter from your employer will suffice for the purposes of opening a bank account.
You will also need an ID (your passport) to prove your identity.
Now, how do you go by getting your proof of address? You’ll have to get an existing utility bill amended at the place where you’re staying for it to reflect your name. That’s the only way it’s going to work. If you will get a BT Bill changed (mind you, internet service does not count as a utility in the UK), be aware that they will give you a run for the money. They will, in all likelihood, add your name as a c/o, and the bank will not accept it, so make sure they get it right. It’s easier to write to them rather than getting it done over the phone, because over the phone connects you to India, and that just doesn’t work. Also, note that BT will charge you upto GBP 5.00 to mail you a copy of the updated bill (or you can wait 3 months for bill to arrive, since most BT billing is done quarterly).
National Insurance
National Insurance is the US equivalent of Social Security. Both are rather wreckless tax policies, but they are nonetheless the law and you must abide by them. Note the YOU. You’ll have to call the local job centre in your area to make an appointment, where you will have to take the appropriate documentation that establishes that your presence in the UK is legal and that you are allowed to work. If you can convince the NI staff that you’re not here to rob the UK, they will issue you a National Insurance number, which will arrive at the address you provided via your proof of address when applying for your National Insurance Number (NIN).
Please note that you do not need to have an NI number to start working. You can start work, and your employer will apply for your NIN. However, the employer will deduct NIN from your pay cheque starting day one, irrespective whether you have or don’t have a number. When the number is issued, your employer would submit the contributions tot he government against your NIN. Please note that you don’t need the NIN to start working, but you need a National Insurance Number to continue working in the UK. So, don’t delay it.
Looking for Work?
Well, work ethic for recruitment consultants in the UK sucks. They’re paid to promote a very good picture and not necessarily deliver results, and nobody will give you good advice. Having your CV looking right is very important in the UK, and the American format will do you no good here. The more valid, relevant information you have on your resume/CV, the less chance you will have of getting an interview. The more short, ambiguous and unexplanatory your CV, the better off you are. It’s a dodgy job market.
Prepare in advance, get ready to wait. Consultants make you wait in London, and you must be prepared to survive 3-4 months without earning a penny, unless you are entrepreneurial and have other legal means of making a living, which London provides plenty of opportunity for.
Note that London is a good place for self employment. The level of incompetence (and I say this without much sarcasm) is pretty high (comparable with Dubai), and there is a lot more need for competent, professional people, which means that if you’re good at what you do, there is money to be made in the UK.
Remember, the UK is, in the words of some Britons, in many ways “a third world country masquerading as a developed nation.” This means that 8 out of 10 times when looking for a job, it’s not what you know, but who you know. Make friends with recruitment consultants; that’s the best way to get interviews if that’s what you’re after.
Bargaining?
If you’ve come to the UK from the US, change your shopping habits. This is not a country where all prices are fixed (except for big brand chain stores), and you must negotiate to not get ripped off. Remember, everyone who’s selling something to is out to get as much as he possibly can for it, and since the customer does not come first in the UK, you must stand up for yourself and bring the price down to what is right. Don’t get ripped off.
Cost of Living
Everything here costs double of what it should. Movies, entertainment, food, rent. It is an expensive country, and quite frankly, it does not deliver the quality of life that the States does, even at twice the cost of living. Therefore, get ready to overpay and complain. To give you an idea, a 2 bedroom flat about 40 minutes to an hour away from the Centre of London will run you about $ 2500+ per month. And this won’t be a big flat/apartment; the bedrooms will barely fit a bed. This brings me to the next thing to prepare for….
Personal Space?
Since the UK is short on space, and quality of life is irrelevant for most, get used to cutting down on all kinds of personal space, especially the space you live in. Flats, apartments and houses are tiny; and estate agents plain flat out lie when they call some a 2-bedroom unit. Look for yourself. Do not beleive photos/pictures, but keep in mind that you’ll pay just about double the rent for the same space compaired to New York City, and probably double the rent and half the space compared to to other major US cities.
0800 Numbers
This is one thing I hate about this country. Since this is a safe haven for businesses prepared to stiff the general public, most businesses in this country don’t have a normal telephone number. They will advertise fancy numbers like 0845, 0870 etc., which are all rip offs. My advice, if you can live without using a product from one of these businesses, do it, because these are vampiric businesses and companies and they are not around to provide you with a good product or service. Why is that? Well, 0845 etc. numbers work like the opposite of a US Collect call.
Say, if I’m calling a store on their number 0845 1234 5678, I get charged about 4p to 50p a minute in excess of my normal call charges (depending on whether you’re calling from a landline or mobile phone), this business that I’m calling gets to keep half of that money. So, not only will you overpay this business for a third class product, but you are also being penalized to call them and inquire about the very product they want to sell to you. Two words: F@#*king A$$holes who’s business will fail and they will rott in hell. That goes for all of them: the Ikeas, the sainsburys the Tescos etc. etc. There, I feel better now. If a business isn’t courteous enough to give you information about the product they sell for free, imagine what kind of shady, dodgy third class products they are selling. Woe unto them.
Also note that 0800 numbers which are toll free, are only toll free if called from a BT landline. If they’re called from a mobile, they will suck up your designated minutes and you will be charged a cost per minute, which can vary from 10p to 1 pound depending on your mobile phone carrier and the number you are calling.
It’s all a rip-off. And it’s even more frustrating because…
Lack of Good Technology/Ecommerce
Yes. The UK is about 30 years behind the US. Things are not automated despite what banks, utility companies, and online stores claim. Online orders time out, websites are browser incompatible, and very often after you complete an online transaction you will get a call asking you to complete the transaction, well, because the businesses are cheap and incompetent. Get used to living in the stone ages, even in a hiflying proclaimed city like London. It is, after all, an American Village.
The Train, Tubes and Subway System
If you live in London, you rely on public transport to get you places, because driving a car is neither cost effective nor healthy for those of us with shorter tempers.
Without a doubt, the management of a transport system that operates on the scale of London is a mammoth task, but it’s not done too well here. The main reason for that is lack of foresight. I’m going to compare the Underground to the New York Subway, and to fans of London, they were both built in 1863. It’s just that New York built their system better by adding redundant tracks, and London failed to do so. The result, after 150 years is that the London Underground suffers from serious delays, where as the New York Subway doesn’t quiite have the same level or scale of problems.
More need not be said. Get ready to be frustrated and late for a transport system that will overcharge the living daylights out of you and your hard earned money.
Conclusion
I’d love to spend more time writing about this, but I’m short on time and I’m sure you’ve noticed a common theme. Brace yourself! The UK is not all that it claims to be. If you’re moving from the States, expect disappointment. If you’re moving from a former English colony that’s a third world country, don’t expect much different.
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