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Is getting your teeth whitened a good investment? It's a dilemma that Rich People's Problems columnist James Max has sunk his teeth into this week. If you fall victim to an investment scam, would you actually tell anyone about it? We hear why you should as the city watchdog launches a major campaign and our worst tax nightmares. Experts tell us what horrifies them most about the UK tax system just in time for Halloween. Welcome to The Money Show, the FT's weekly podcast about personal finance and investing. I'm Claer Barrett, FT money editor bringing you this week's money news.
Smile, and the world smiles with you unless perhaps your teeth are yellow decaying stumps. So is it time to invest in yourself and look for some cosmetic dentistry? Joining me in the studio to discuss is James Max, our Rich People's Problems columnist. Welcome, James.
Good morning. I'm conscious now. I'm almost doing that sort of strange thing where you put your hand in front of your mouth.
Well, yes, because this week you are writing about your gnashes. So explain your latest dilemma.
My gnashes. Well, the dilemma is I'm 47 years old, hair is going grey. It's the only part of my body that's thinning, and despite a recent diet, I think I'm still too fat. I like cake and chips and chocolate and all the other things that one--
We agree on many things in life I have to say.
I mean red wine, for example, terrible for your teeth. Terrible. So the dilemma is teeth are one of these things that the health of them is really important. And the health of my teeth is great. I've always brushed them. I don't have any fillings. All that sort of stuff. I've got a couple of baby teeth. They're still there. Nothing's fallen out. I'm not a toothless crone. But the issue for me is I'd like them to be a little bit whiter. And the question is do I go through that vanity project? Because it's very important, obviously, in this world where everything else is falling to hell in a handcart.
Well, it's very interesting because when you tell me about the ideas for your column, which some people may criticise and say, oh, this is a very trivial thing, it's surprising the amount of people in the office and in my kind of wider circle of friends say, oh, I was having a conversation at a dinner party about just that. Because it's not very cheap getting your teeth whitened. Talk us through the kind of pros and cons.
I guess the pros of having it done are that we live in a society that is increasingly judgmental, not only about how we dress. For example, I used to work with a chap in the office, and you could just accuse him of saying, look, did you get dressed in the dark? It's just terrible. And people look at what you wear and then how you look and if you're thin and fat and all that sort of stuff. People are judgmental, and then people are also detrimental about the state of your teeth. It's the most obvious thing that they can see.
And so I suppose the pros of having it done are that maybe it gives you self-confidence. It gives you one less reason to look in the mirror and think, oh, what a terrible state. What a bag of half-empty potatoes that is. It's terrible. So it's a vanity thing. It's rather like when you buy a new item of clothing. If you really like that new item of clothing, you can walk outside, and it doesn't matter whether you're as big as a house or otherwise. You walk out and you're just like, I've got a new coat. It looks epic, like a new pair of shoes-- lovely, lovely new pair of shoes. So all of those things it's a vanity project, and it might make you feel better in the same way that when you've had your hair done or whatever it may be that's also positive.
The negative is everybody knows that you've had it done. They'll think, oh, haven't you something better to do with your money or time or energy? And does that really stop you being somebody not very nice?
Well, it can look quite natural. There are lots of people on television, for example, who have got what you call in your column TV anchor teeth.
They're horrible. Why do you do that?
And it kind of negates the point of doing it if people look at you and think, well, they've obviously had their teeth done.
And this is the point about all these procedures. And we do go into some of the sort of more hefty procedures that I could not understand for the life of me. Went on holiday, these people turn up year on year, and every year they've had something done. And you begin to wonder why did you do that? You look terrible. I don't know whether you're happy, sad. I don't know if you can go in the sun anymore. I don't know if you've had to start shaving even if you're a lady. All these things. That you've had all these procedures, why do you do it? Does it actually make you feel better? And then you're mean to them. Many of them are as miserable as sin.
Well, let's talk about the cost. Because for you the cost wasn't the number one concern. Because, after all, you are the rich people's problems.
Listen, I'll let you into a little secret. It doesn't matter how much money you have. You've never got enough. And also, spending money on things that you are unsure about, whether it be a packet of Tic-Tacs that you're not sure that you need or a huge expensive thing, you're always concerned about it. And it doesn't go away just because you've got a bit more cash.
So tell us the bottom line on the teeth whitening.
So the bottom line is-- by the way, if you're thinking, oh, yes, I'll nip down to my local Boots, and I'll go and buy, other chemists are available. And I'll go and buy some of this teeth whitening stuff-- the paste, the things, the brushes-- forget it. Waste of money. So you got to go to your dentist. If you go to your dentist, then they'll say, oh, you can have these trays, and you can do it at home. 350 quid. Again, are you really going to bother with that? And it's not instant.
If you're going to spend that amount of money, I want it instant. 490 quid. So 490 quid gives you instant, but then by the way, they'll say you need the trays. Due to regulations something whatever, it can't be as powerful as it used to be. So if you want like really white sparkling teeth, get the trays, and then you can top it up. So all-in-all, it's a bag of sand. 1,000 quid, you're in.
OK. Well, you will have to read James Max's column to find out what his decision was. Should I get my teeth whitened in the FT Money section of the weekend newspaper this Saturday or online now at ft.com slash money.
If you fell victim to an investment scam, would you report it? Thousands of people lose money to so-called boiler room scams every year. But thousands more are contacted by scammers, yet realise in time that they are being conned. And For complex reasons, many people choose not to report what's happened to them-- an attitude the Financial Conduct Authority is keen to change. Joining me on the line now is Mark Steward, the FCA's director of enforcement and market oversight. Welcome, Mark.
Thanks, Claer.
So tell us why is it important that people who get contacted by scammers, yet see through you the sales pitch, get in touch with you to tell you about it?
Too often the start of the fight against investment scams begins quite too late when victims have already lost their money in circ*mstances where it's also very difficult, if not impossible, to get any of it back. So I think the fight against fraud shouldn't always start after the money has been lost. We're urging the public to help us fight investment scams before they cause damage. And we're also thanking those who are coming forward now to tell us about their experiences, so we can crack down on investment fraud better.
And what's the best way that they can contact you?
Well, they can contact us by calling our help line on 0 800 1 1 1 67 68, and provide us with information about what they've seen, heard or what their neighbours or friends have seen or heard.
Yes, because this is one of the things that people often don't phone themselves. But perhaps another relative or friend can do it for them. Give us a flavour of the typical kind of investment scams that the FCA is seeing at the moment.
Well, they come in all shapes and sizes, Clare. Typically, they'll be some quite exotic scheme, perhaps involving hotel development site in a foreign place or something that is quite difficult to find out about like a forestry plantation in South America. And it'll be accompanied by some glossy brochures and some quite detailed and fantastic promises about the returns that might be earned if you invest. And one of the things that often happens is people who are contacted with these sorts of offers almost invariably know right from the very beginning that it doesn't sound right. It sounds too good to be true.
And the fraudsters know that this is going to be the initial reaction. And so they cultivate the person. If they don't hear no straight away, they cultivate that person, and they work on them to build up such trust that the person then feels as though it would be a mistake not to proceed and to invest their money. And we've seen this pattern so many times. So given that many people do tweak that there is something not right right from the very beginning, we want to try and capture that and capture that in a sort of neighbourhood watch setting so that we can do something about it, and nip it in the bud before people lose their money.
Sure, and an imperative to do so at the moment with pension freedoms means that people over the age of 55 can obviously access big sums of money, and the fraudsters know that. And likewise, the statistics are showing us that this is a really big problem. 176 million pounds worth of investment fraud was reported to Action Fraud in the last financial year. So maybe not surprising that many victims are so embarrassed about being had that they don't want to tell anyone about it.
It's not just victims, Claer. We know that fraudsters play the percentage game. They will get many more knockbacks than they do get victims saying yes, I'll invest my money. So it's getting those people who know right from the very beginning, and they say no. Getting them to actually tell us what's going on is really important. Invariably, if we're waiting for the victim to tell us, it's already too late.
Well, thanks very much to Mark Steward. You can read more about this story now on our web site ft.com slash money or in Saturday's FT Money section. And once again, if you think that you have been victim or you've been contacted by a fraudster, then definitely make use of the FTA's helpline. Give them a ring.
Tax doesn't have to be taxing. Yeah, right. That was the attitude of a host of tax experts when FT Money asked them to reveal the things that most horrified them about the UK tax system. We've come up with a selection of 10 of the nastiest things just in time for Halloween. And joining me now to discuss is Paul Morton, tax director of the Office for Tax Simplification. Welcome, Paul.
Thank you.
So many of the top 10 nasties the experts have highlighted in this report relate to the complexity of the UK tax code. Do you think it is too complicated for normal people like me to understand?
Yes, there are about 20 million words or more in the UK tax code. So I think it's probably too complicated for tax experts to understand, let alone normal people. That's why we were created in 2010 to make recommendations as to ways of simplifying the tax system and why we exist today as a statutory entity within the treasury- independent, expressing our own views and recommending ways of simplifying all of this complexity. And we're particularly interested these days in the user experience-- what it's like to be a taxpayer and how it feels to submit a tax return or start a business and register yourself. How does that feel? And how can we make that a better experience?
We could talk all night, couldn't we? Of all of the examples that our experts have singled out in this article, pick some that you sympathise the most with.
Well, I'll pick on two areas. The first is, for example, high marginal rates for those earning over 100,000 pounds as personal allowances are withdrawn. There are many other cliff edges and thresholds in the tax system which are complicated, and of course, people are concerned.
And that particular one affects a lot of FT Money readers. So basically, if you're earning between 100,000 and I think 123,000 pounds, then your marginal tax rate is effectively 60%.
It is. And we've identified that and given that some thought. It's very hard of course to know what to do about some of these.
It's hard to feel sympathy for people who earn over 100,000 pounds.
Well, just from a complexity point-of-view, one would like to smooth some of these thresholds, but that would involve either collecting less tax or taxing people below the threshold to a greater extent than they are at the moment. So we continue to think about all kinds of thresholds. There are some thresholds at the lower end of the income scale which are also very complex and problematic.
With child benefit in particular.
Indeed. It's an area we're still looking at. The other area I would pick up is the separation of income tax and National Insurance Contributions. Now this is a huge cause of confusion and complexity. We did look a few years ago at the possibility of having National Insurance Contributions on the same basis in the same time period as income tax, which would greatly simplify the administration, make them both easier to understand. But if one were to do that, there would be some six million people who would pay more, and many millions of people would pay less.
And it's very difficult to take a simplification measure when so many people would be adversely impacted. We did suggest, for example, that National Insurance Contributions could be put onto an annual basis and an aggregated basis rather than the shorter periods which apply at present. But these are very difficult things to do, but still worth giving serious thought to.
And of those six million people who would pay more national insurance if treasury and HMRC listened and went with your plan, do you think they would typically be higher earners who are paying more, or people at the lower end of the income scale? Or was it evenly distributed?
No, there are some marked differences between parts of the country, between men and women, part-time and full-time. But generally speaking, the people affected would be at the lower end of the income scale, which I think makes this more of a question.
So probably not one to push through Mr. Hammond in his next budget. But let's talk about your day job. What other aspects of the UK tax system are you trying to simplify at the moment?
Well, we're looking at a quite a number of areas. We're looking at how technology can improve the user experience for tax payers. We're very interested in whether technology can just present a simpler picture to taxpayers, help people make choices more easily than perhaps they can at the moment. Interested in what other countries are doing with technology in tax administration too. We're also looking at inheritance tax, the tax on income from savings and investments. We're looking at how businesses relieve expenditure on capital equipment. And I should mention that we're publishing our report on VAT in a couple of weeks' time.
Wow, we'll certainly be covering that one.
Well, we're very excited about that. We've identified two or three areas which we think are very important. The most urgent of which perhaps is that of the VAT registration threshold. As a business grows in size, as it hits the 85,000 pounds revenue, it has to register VAT. And a business which is entirely taxable from a VAT point-of-view, as it hits that threshold, would have to collect 20% VAT on all of its sales-- some 17,000 pounds-- paid out over to HN Revenue & Customs. Now what we see is a noticeable bunching of businesses just below the registration threshold.
Interesting because they don't want to go over that threshold and have to charge VAT.
Now there will be some who choose to go into the hidden economy, but we know that there are many who simply choose to take practical steps to stay below the threshold. So they'll shut the shop for a month perhaps. They'll not let the extra room in their bed and breakfast. They'll perhaps go on holiday. We hear that cruise ships are full of people who are attempting to stay below the VAT registration threshold. We think this is an impediment to growth. Can't be healthy for the economy, and so we're looking at ways of addressing that so one could have a higher registration threshold. We already have a much higher threshold than any other country in Europe and one of the highest in the world. Singapore, for example, has half a million pounds. That would take many businesses out of VAT, avoid the problem, but much less tax would be collected.
It's always a complex argument between the two. Well, thanks very much, Paul, for joining us and making tax so interesting. You can read this Saturday's cover feature Your 10 Worst Tax Nightmares in the FT weekend newspaper from Friday. Online at ft.com slash money.
That's it from the FT Money Show this week. To get in touch with our team of financial experts, email us money@ft.com. Tweet us @FTmoney or comment on our articles online at ft.com slash money. Don't forget, if you've got a rich people's problems for James Max, he's on richpeoplesproblems@ft.com. We'll be back next week at the usual time. Goodbye.
