Questions Of Cash: Minimum payments may not cut credit card balance


Q. I've not used my Barclaycard for over a year and paid the minimum repayment monthly by direct debit. Yet I am regularly charged £12 for being "Over Credit Limit" and had to pay £100 in July to put my account on an "even keel". Even then, I was charged £12 in August for being over my credit limit. Barclaycard is now recommending that I pay £39.04 in addition to the minimum payment. HA, London.

A. You have been under a misapprehension that paying the minimum monthly repayment will necessarily reduce your monthly balance. Several card issuers have recently reduced the minimum monthly repayments, saying this helps customers to deal with the problems of the recession. But cutting repayments increases the period in which a customer is in debt, the amount a customer must pay in total and the bank's profits. It can also mean, as with you, that repayments are insufficient to pay off a debt. Borrowers should, if they can, pay more than the minimum repayments to clear their debt quicker.

Your account balance is higher because of the cost of your payment protection insurance (PPI). Which? and other consumer bodies strongly criticise PPI policies, advising consumers to avoid them. It provides online advice to consumers on how to reclaim past PPI payments – see www.which.co.uk/campaigns/payment-protection-insurance/index.jsp. You should lodge a claim to recover past PPI payments if you feel your policy was mis-sold. Meanwhile, Barclaycard has agreed to refund £108 in past charges, taking you further below your credit limit. Recent proposals announced by the Government would lead to higher minimum repayments, helping to protect consumers in your position.

Q. I am corresponding with HMRC to recover taxes paid on a medical invalidity allowance and a pension from the European Commission, which are exempt from national taxation under Article 13 of the Treaty of Rome Protocol on Privileges & Immunities and European Council Regulation 549/69. HMRC has accepted the exemption and since 2003/04 I have not been taxed on these incomes: tax on invalidity allowance back to 1994/95 has been repaid. But a large backlog of taxes on the pension and the invalidity allowance remains, going back to 1987/88. Is it true that a High Court case ruled that HMRC cannot impose time limits on requests for repayment of taxes? HB, by email.

A. Leonie Kerswill, a tax partner at PricewaterhouseCoopers, says: "The normal time limit for making claims for repayment of income tax is five years (reducing to four years from April 2010) from the 31 January following the tax year in question, so this limit probably covered the repayments already received for years back to 1994/95. As far as the earlier years' repayments are concerned I believe the cases referred to are Fleming (t/a Bodycraft) v Her Majesty's Revenue and Customs (HMRC); and Condé Nast Publications Limited (Respondents) v HMRC. Both these cases were heard by the House of Lords in 2008 and followed the introduction of a three-year time limit for repayment claims for overpaid VAT, which had retrospective effect.

In broad terms the Lords held that the three-year time limit should be disapplied until an adequate transitional period had elapsed, which resulted in numerous claims for overpaid VAT, some going back to the 1970s. Unfortunately these cases are unlikely to help the reader in his circumstances. The main issue in this instance seems not that HMRC don't accept the claim, but rather that they are being very slow in repaying the tax. It may be worth the reader making a complaint by writing to the complaints manager at the office concerned, who should normally reply within 15 days. If the reader is still unhappy, he can ask the adjudicator to investigate, and if still not satisfied, then he can ask his MP to refer the case to the Parliamentary Ombudsman, or take the matter up directly with HMRC."

Q. I sold some shares in September on an execution-only basis using TD Waterhouse. I tried to make a sell at market rate. TDW quoted a price, nothing seemed to execute and a notice appeared which stated that market trades during the working day cannot be cancelled. About 30 minutes later I found it had sold the shares at a lower price than quoted and significantly lower than the trades either side. TDW told me that because of the size of my shareholding, it had to deal with another broker. I then transferred my account to ShareCrazy and applied to transfer my portfolio. This happened on 1 October, but without my cash balance. I then found the cash balance had been reduced by £250 without explanation. I was then promised the cash balance would be transferred to ShareCrazy on the week ending 9 October – but I am still waiting. PM, by email.

A. TD Waterhouse gave us a detailed statement. When you placed your order to sell, it was unable to get a firm online quote from market makers. It advised you that you could submit your order online, which you did. TDW then again contacted market makers, who again did not quote for the shares. It was therefore traded manually. The touch price available at the time was between 1.25 and 1.33 and the sale made at 1.25. TDW argues that "there is not a requirement to get comparative quotes as long as the price available from the market is within the touch price".

While this was at the bottom end of the touch price, it says it acted within its terms and conditions and in line with FSA rules. You were charged £8 for the trade. The £250 is its charge for transferring stock to another broker: you held ten lines of stock and the charge is £10 per line. But TDW says it was "unacceptable" that it failed to transfer the cash balance of £368.55 to ShareCrazy. It has now transferred this, plus a refund of the £250 transfer out charge because of its failure to make the transfer in a timely manner.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: questionsofcash @independent.co.uk

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