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U.K economy experienced a huge dent with a steady rise in the debt figure in the recent years. People are juggling with multiple debts and looking for a reliable debt management program. A considerable number of people are unemployed and many others have lost their jobs. Even the insurance sector could not dodge the effect of this economic meltdown. As people are financially crippled they are trying to evade automobile insurance in the recent years. More than 350,000 car owners in Britain have not obtained any insurance according to the statistics from moneyexpert.com.

Auto owners should hold an automobile insurance according to the law in the U.K. The law has been made compulsory in order to safeguard against large medical bills or other obligations if a person meets with a serious accident. The reason behind not buying automobile insurance is still ambiguous for us. Financial experts assume cost as one of the factors. But the auto owners fail to understand the high risk involved in not purchasing insurance. These people jeopardise their personal safety along with the financial security of others.

Motorists can not be blamed for not obtaining automobile insurance but the rising theft of number plates shows that the miscreants are trying to avoid automobile insurance as well. Well-off people are involving themselves in crime due to severe financial crisis. The lending institutions have limited the option of refinancing due to the serious threat in the current economy.

The limitations on mortgage loans are increasing with the passage of time so it is difficult to acquire credit. Credit card debt is a burning issue in the U.K so restrictions are being imposed on credit card limits. Financially strapped people are grappling with high fuel and energy costs as well. There is a rise in the number of people submerged in the sea of debt.

In this situation refinancing or a consolidation does not seem to be the right solution for the indebted people. As insolvency rates are increasing in Britain individuals are selecting bankruptcy over IVA.

In such a catastrophic financial situation if you think that automobile insurance is a secondary concern then you've got to be kidding! If you face a serious injury in a car accident then you know the consequences. You might be unable to work for a minimum period of 6 months and the piling bills will keep on hovering over your head. Insurance will help to anchor you down so automobile insurance should be a target on your financial chart that you maintain. You might face problems in paying the premium for your automobile insurance but you might reap a good result in the long run.

This is a guest post by Kevin Craig who is a financial writer for various finance related communities. He has been providing advice on debt management since 2007. You might like to visit the page debt settlement Florida. With his advice many are now living a debt free life.

kevin.craig672@gmail.com

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ARTICLE (October 01 2010): The sphere of indirect taxes, especially the sales tax law has always been an orphanage both for our tax authorities and legislators. Due to this untoward attitude by the fiscal managers, the law could not be developed on the pattern of international or regional best practices.

The recent catastrophe on this front was the ill-timed value-added tax which, due to bad handling and confused approach of the government, demised even before it could see the light of the day.

Having said that, one side of the picture has remained consistent for many years - the inherent desire of our tax machinery to illegitimately withhold taxpayers' money! Rampant efforts are on the rise to curtail, restrict or at least defer the repayment of refunds to the taxpayers on one pretext or the other. A latest classic is Sales Tax General Order (STGO) 34 which has been issued by Federal Board of Revenue (FBR) "for maintenance/updation of active taxpayers' list in the FBR's database".

A detailed analysis of the STGO transpires while drafting the STGO, no one at the helm of the indirect tax affairs even bothered to examine the legal backing of the measures proposed therein. As a result of serious legal loopholes, the STGO can safely be termed as an 'extra judicial legislation'.

While the basic intent of the STGO is to restrict and discourage non compliant taxpayers from doing business freely in society and accordingly compel them to make due compliances with the tax laws, we are mindful of the obstinate principal that subordinate legislation derive its powers from the superior/primary statute and as such no law/procedure may contravene/override its basic framework. Unfortunately, the STGO not only overrides the enabling provisions of Sales Tax Act 1990 (the Act) but is also contradictory to Income Tax Ordinance 2001 (the Ordinance).

The STGO has introduced a wider definition of 'non-active taxpayers.' Besides, various serious repercussions have been listed therein when either such non-active taxpayers carry out businesses or when business transactions are made with them. However, when we look into the powers of the FBR prescribed in Section 55 of the Act, we note they may only be exercised when any difficulty arises in giving effect to the provisions of this act/rules. In such a case, the FBR may, through a general order issue instructions or directions to remove the difficulty subject to the mandatory condition that such directions cannot be inconsistent with the provisions of the act. In other words, any general order has to have a limited and specified role, ie, to remove the difficulty arising out of the main statute.

The STGO suffers from fundamental legal infirmity since, on one hand, the act does not contain any specific definition or criteria whereby a taxpayer may be classified as 'non-active', on the other hand, the STGO does not only lists down a self-contradictory definition of 'non-active taxpayers', but also specifies the repercussions if business is conducted by/with such taxpayers. In short, the FBR has attempted to legislate an entirely new mechanism, which obviously cannot be made under Section 55 through a general order. Thus the STGO may be struck down on this single score alone.

Coming towards the point wise analysis of the STGO, every person, who fails to file the return under Section 26 of the act within the prescribed period for two consecutive months, has also be classified as a non-active taxpayer. We are mindful that usually FBR Web Portal suffers from system problems near the filing date, which delays timely filing by the taxpayer. Nonetheless, no such cushion has been made in the STGO where the delay in filing is beyond the control of businesses. Secondly, this requirement is in direct conflict with Rule 11(4) of Sales Tax Rules 2006 (the rules) whereby non-filing of tax returns for consecutive 6 months may lead to de-registration of concerned taxpayer. A person, who fails to file any missing return within 15 days of notice issued to him, can also be classified as non-active. However, it has not been specified whether this reference is made towards missing return in the departmental database or otherwise.

Another glaring legal defect listed in the STGO relates to certain income tax non-compliances on the part of taxpayer. The STGO stipulates that anyone, who fails to file any due income tax return under Section 114 or who fails to file the monthly withholding tax statement under Section 165 of the ordinance for two consecutive quarters, will also stand disqualified as non-active taxpayer. The term 'non-active' has also not been defined in the ordinance.

The author feels, perhaps, our draftsman erred in ignoring the cardinal principle that both income tax and sales tax are two different sets of fiscal laws. Non-compliance unde