Wealth update – 31/10/2020

Wall saga

Our building now has both a new wall and a gate (although the lock is not yet working). We have actually noticed that the wall does its job – we saw a junky a week ago “hanging out” in front of the building next door, not ours. Yay! We’re both feeling much safer now.

With the second nationwide lockdown looming, I am more worried about the increase in crime and anti-social behaviour than a Covid-19 infection here in Holloway. In my view, the wall and gate in front of our building are very valuable additions.

Gas supply saga

I think I’m now able to switch my gas supply over to a cheaper provider and have requested the transfer. I’m glad to see some light at the end of this tunnel.

British citizenship saga

We (me and my girlfriend) have now paid £1,330 + bits each to apply for British citizenship and will need to meet with a bureaucrat next week on Friday to scan our passports I guess. I’m not too sure what that appointment is about other than scanning our passports… but it’s something we need to appear for in-person and need to bring along all of our paperwork. We almost booked this appointment at a cost of £90 per pop only to then find out that if we book one a few weeks later it will be completely free. What a massive government money grab!

An emergency

I had to use my emergency cash this month as I developed a toothache and had to see a dentist. It was a stressful task to find a dentist on short notice (I don’t have a dentist in the UK) and I was lucky to get an appointment for a Saturday. It felt good to know that I will be absolutely OK paying for the treatment out of pocket if I had to because I had £5,750 in emergency cash. I expected to have an expensive trip to the dentist but felt calm about it as I had the funds available. Luckily, my dental issue (dental abscess on the gum) was quite mild and I only needed some antibiotics – the whole thing only cost me about £60-£70 (including the antibiotics).

The piece of mind from having some cash set aside for emergencies is an amazing thing and I would recommend it to everybody. I managed to convince my girlfriend to do the same and now she’s joined the club and has £5K set aside for this (£2K in Premium Bonds and £3K in a pot with Monzo).

Counting my beans

OK. Numbers! My wealth has gone down this month again as we saw the worst week since March 2020 in equity markets. My net worth as at 31/10/2020 was £117,552 – a decrease of £10,730 or 8.4% from last month. This includes a £1,600 ISA top-up and £292 pension top-up and £50 into Premium Bonds.

My second EIS investment – Morpher – went tits up as well. I invested £500 a few years ago and got £150 (30%) back in tax relief. The rest i.e. £350 is now eligible for loss relief when I do my tax return… so I should get a further £70 (20% x £350) back from the taxman.

I have one EIS holding left. Time will tell if it’s another flop. 🙁

Working from home – claim tax relief from the government

Both I and my girlfriend are eligible to claim some money back from the taxman. From HMRC:

You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19).

You cannot claim tax relief if you choose to work from home.

Additional costs include things like heating, metered water bills, home contents insurance, business calls or a new broadband connection. They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax.

You can either claim tax relief on:

  • £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) – you will not need to keep evidence of your extra costs
  • the exact amount of extra costs you’ve incurred above the weekly amount – you’ll need evidence such as receipts, bills or contracts

You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).”

The way it works assuming you won’t bother with getting any receipts/evidence etc: if you claim it, your personal allowance is increased by £6 x 52 weeks = £312. This means that the highest £312 of your earnings are now taxed at 0% instead of the current 20%/40%/45% – depending on how much you earn. Thus you save £62.40/£124.80/£140.40 depending on which tax bracket you’re in.

It is very easy to apply for this – it takes 2-3 minutes. However, if you fill in annual self-assessments, then you have to apply for this on your self-assessment tax return and need to wait for the current tax year to end before you can claim it. So, please make a note to include this on your tax return for 2020/21.

Until next time!