Rac’s rapid bonus scheme has proved to be a very attractive incentive for younger drivers looking to build up their no-claims bonus as quickly as possible so they too can benefit from the savings offered to those already having accrued a number of no claim bonus years.
For those conscientious young drivers, being diligent early on will prove incredibly beneficial for their future insurance premiums. Another way young drivers can reduce their insurance premiums is by completing the ‘Pass Plus’ driving course. Taking a minimum of 6 hours over just a few lessons a young person can gain some extra discounts.
So how does the Rac’s rapid bonus insurance scheme work? Well rather than taking 12 full months to build up a single year of no claims bonus the Rac’s cover will allow you to do it in just 9 months! It may not sound ground breaking, but obtaining 5 years worth of no-claims bonus would only take just over 3 and a half years, not a bonus to be frowned at. Of the millions of young UK drivers on the road at any given time, which of them are eligible for such a lucrative offer?
Quite generously, Rac has extended this offer to drivers between the ages of seventeen and twenty-nine who have had no previous claims, accidents or convictions. In addition, the young driver would need to have less than 4 years no claims discount and would be currently driving a car that was a ‘group 15′ or less. The young person would also be looking to take out a fully comprehensive car insurance cover with the Rac. With such a huge perk one would not be alone in thinking ‘what’s the catch’, surely it all sounds too good to be true? Rac is quite literally giving one of the most dangerous demographics a bonus just for their age range, or are they looking to finally stop the ageist approach most car insurers take in relation to the youthful driver?
Are there any other ways a young driver can reduce their premiums, well the Rac makes a number of suggestions for the young driver, some include increasing your excess, by doing this you show the insurance company that you are confident in your driving capabilities, so much so that you are willing to put your own hard earned cash up against the premium to prove it. As well as this as mentioned before one can take part in the pass plus scheme, aimed at not only giving new drivers the much needed confidence it takes to tackle some of the more arduous road surfaces the UK has to offer. Once again by investing the time and the small amount of money it takes to complete the course you undeniably show the insurance companies that you are serious about your driving and are not looking to be reckless and treat the roads as your very own racing course.
All these benefits are undeniable but before taking out the policy be sure to take stock of all the features the policy has to offer as well as any potential flaws. One such flaw could be in that the Rac doesn’t guarantee that the years of no claims bonus accrued while under their scheme will be transferable over to other insurance providers. So while you have taken the time to invest in your future cost effective insurability it may in fact all be for nothing if other insurers refuse to acknowledge the schemes incentive and rewind your bonus to actual time and not incentive time.
All examples are based on customers who do not have any NCD-entitlement when they take out their insurance and who remain claim-free for the life of their insurance. We cannot guarantee that this No-claims discount will be transferable to other insurers.
Archive for January, 2009
Rac’s Rapid Bonus Scheme
Monday, January 5th, 2009Vat Schemes and Vat Thresholds
Saturday, January 3rd, 2009
Vat Registration
Businesses become liable for vat when sales reach the vat threshold set on 1st April 2007 at ?64,000 p.a. regardless of whether that business has registered for vat purposes.
Businesses whose customers are vat registered should consider opting for voluntary vat registration as sales would not be affected by vat registration and registering would permit that business to also reclaim vat input tax on purchases. Businesses with mainly non vat registered customers may wish to delay vat registration until the point is reached at which liability to vat tax becomes inevitable. Consideration should be given to maintaining sales below the vat threshold provided this does not result in a significant loss of profit. When the vat threshold of ?64,000 p.a. is exceeded Customs & Excise should be advised. It may be possible to delay vat registration if sales breached the vat threshold due to an abnormal sales period that may not necessarily be repeated in the foreseeable future.
Having reached the point of vat registration consideration should be given to the various vat schemes which are available to either simplify the vat calculation or smooth the vat tax liability.
Choose the right vat scheme for your business
Unless a vat scheme is adopted then the standard inputs and outputs vat scheme would be applied. This involves charging all customers vat on sales known as output vat and paying this amount to the Vat office each quarter. Vat Registered businesses can also deduct from the vat liability the input vat on purchases that suppliers have charged the business. It is important to ensure all sales and purchase invoices are retained and an audit trail from the individual transactions to the vat tax liability is maintained as Customs & Excise do inspect vat records, the frequency of those visits, often once every three years can increase dramatically if the vat records are considered inadequate. Accounting Software can provide a solution to record keeping and DIY Accounting produce automated vat calculations from the basic data entry of sales and purchases on excel spreadsheets.
Vat Schemes
Vat Flat Rate Scheme
The vat flat rate scheme can be adopted by businesses that have an annual turnover excluding vat of under ?150,000 p.a.
Instead of paying the difference between vat on sales and vat on purchases businesses that have adopted a vat flat rate scheme pay vat at a percentage of sales in line with the average for that trade sector. Vat is not reclaimable on purchases under the flat rate scheme. The Customs & Excise website contains details of the vat flat rate percentages for each sector.
Customers are charged vat at the normal vat rate, 17.5% if standard rated goods. The actual vat payable is then calculated at the appropriate percentage of the total sales figure including vat. An adjustment to the accounts would then be required to adjust for the difference between the vat paid and the amount payable if an inputs and outputs basis had been used. DIY Accounting software automates this flat rate calculation by automatically calculating the vat on sales at the flat rate and expensing the vat input to the purchase accounts.
Businesses in their first year of vat registration also receive a 1% reduction in the vat flat rate for their trade sector which can save tax.
Annual Vat Accounting Scheme
Not suitable if you receive repayments of vat, the annual accounting scheme is based upon an annual estimate of the vat bill which is then paid in monthly or quarterly instalments throughout the year with the balance payable or received at the end of the year when the annual vat return has been submitted.
The vat threshold for this scheme is businesses with a sales turnover not expected to exceed ?1.25m.
The main benefit of the annual accounting scheme is to smooth the vat payments over the year.
Vat Cash Accounting Scheme
Under the vat cash accounting scheme the vat return and liability to pay vat is based upon the date sales were received and the date purchases were paid rather than the invoice tax points.
The vat threshold for the cash accounting scheme is businesses with a sales turnover excluding vat of under ?1.35m.which can be extended for existing users to a turnover of ?1.6m and left in place for up to 6 months after the vat threshold has been breached.
Accounting for vat using the Cash Accounting Scheme may require businesses to record sales and purchases on cash received and paid basis and adjust accounting records for accruals. Alternatively, sales and purchases can be entered into the Accounting records based upon the invoice tax points and a quarterly adjustment made for debtors and creditors at the beginning and end of each quarter. Such accounting adjustments would not be suitable for everyone.
Vat Retail Schemes
Retailers selling to the general public may not easily be able to produce vat sales invoices to individual customers and there are various vat retail schemes available on the Customs & Excise website that retailers can adopt.
The main benefits of the vat retail schemes are to dispense with every customer being issued a vat invoice unless requested.
Vat retail schemes can be used in conjunction with both flat rate schemes and the annual vat accounting scheme.
