Money: Now for the Ikea flatpack home

Swedes answer call for cheap housing; more with-profits bonus cuts; one million taxpayers miss self-assessment deadline
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The Ikea home could be coming soon to a neighbourhood near you.

In a tie-up with the Hyde housing association, which covers a large area in south-east England, the furniture store chain is to expand its empire by selling one- and two-bed timber- frame flatpack homes.

Expected to retail for about pounds 60,000 to pounds 70,000, they will be marketed in store but won't be available off the shelf.

While most Ikea kit is self-assembly, the homes will have to be built by professionals on sites bought by Boklok, a body set up in the UK to look for suitable land for development.

Likely to be built in blocks of six, the new-builds will fit in with the plans of Deputy Prime Minister John Prescott for ready-made cheap homes that can help first-time buyers on to the property ladder. It is hoped the first properties will be on sale by spring next year, with expectations that many will be built on city outskirts.

The homes have been available in Sweden for eight years, and were developed there in response to the same need - for inexpensive housing.

You can also expect Ikea to throw in a handful of furniture packs with every new building.

Endowment misery

The season for with-profits bonus announcements rumbled on last week with precious little cheer.

First, it was revealed that holders of with-profits endowment policies at Standard Life had suffered a fall in their annual bonus rates from 2.5 to 2 per cent. Those in its with-profits pension funds saw their bonuses cut from 3.25 to 2.5 per cent.

The slump in UK equity markets during the stock market falls between 2001 and 2003 destroyed much of the value in policies issued by Standard Life and many other with-profits companies. A subsequent switch into bonds then meant they missed out on much of the bounceback.

At Clerical Medical, annual bonuses on with-profits endow- ments dropped from 1 to 0.8 per cent, and from 1.5 per cent to 1 per cent on with-profits pensions. However, those who have a with-profits income bond with Clerical Medical saw the regular bonus stay at 4.5 per cent. The life company also cut its market value reduction - the cost of leaving the company - by between 2 and 4 per cent.

With-profits policies are designed to "smooth" out the peaks and troughs of volatile stock markets: profits in good years should allow insurers to maintain their annual bonuses for investors in the bad years.

Lax on tax

It is estimated that close to one million taxpayers failed to file their self-assessment forms by last Monday's 31 January deadline - generating around pounds 90m in penalties for Treasury coffers.

Those who missed last week's deadline for the 2003-04 tax year automatically incur an initial pounds 100 late payment penalty as well as being charged interest on any overdue tax.

If payments still haven't been received by 28 February, an additional surcharge of 5 per cent of the outstanding balance will be imposed. Persistent heel-draggers could face fines of up to pounds 60 a day.

This year's late-payment figures remain high despite an extensive advertising campaign by the Inland Revenue, says Chas Roy-Chowdhury from the Association of Certified Chartered Accountants. "Don't bury your head in the sand: delaying payment will cost significantly more in the long run," he warns.

Heavy use of the Revenue's website last weekend meant many who had returned self-assessment forms online just before the deadline, but made mistakes filling in the application, were not able to submit a corrected form on time.

The pounds 100 fine will be waived, however, if the corrected form is emailed back by 14 February.