They’re interesting statistics, but worrying ones for tax authorities. The reality is that those taxes drive the economy and without the revenue coming in, well, services have to be cut and customer expectations reset. But people are under pressure also, and paying the taxman is always seen as a burden.

According to the article, the three most common ways in which the tax authorities don’t get their due are inflating the value of charitable donations and claiming personal expenses as business expenses if you’re self-employed as well as people who can’t decipher the complicated tax code. You may think that claiming tax credit on your phentermine might make sense, but there’s really no legal basis to be doing it; it’s not really an “allowable expense”.

The Isle of Man’s economy is pretty dependant on the UK, so I hope they start heading towards some sort of recovery sometime soon.

It’s food for thought, especially if you’re in the market for a new mortgage; but don’t forget the knock on effect on other industries. At the end of the day, borrowing is what drives other businesses, whether you sell peanuts or diamond heart jewelry, whether you’re into services or hard liquor. Banks need to remain viable to provide this service to the economy, so producing a good margin of profit is imperative for them. But the question is, who decides what a reasonable margin of profit is? Should it be regulated by the government? Or should the free market decide?

So many questions!

These are the countries that were given the all clear:

• Argentina
• Australia
• Barbados
• Canada
• China
• Cyprus
• Czech Republic
• Denmark
• Finland
• France
• Germany
• Greece
• Guernsey
• Hungary
• Iceland
• Ireland
• Isle of Man
• Italy
• Japan
• Jersey
• Korea
• Malta
• Mauritius
• Mexico
• Netherlands
• New Zealand
• Norway
• Poland
• Portugal
• Russian Federation
• Seychelles
• Slovak Republic
• South Africa
• Spain
• Sweden
• Turkey
• United Arab Emirates
• United Kingdom
• United States
• US Virgin Islands

Some were expected but there are some interesting development there; what I find particularly interesting is that countries like Luxenbourg and Switzerland just didn’t make the list. So what does the result really mean? Well, the good news is that the Isle of Man can keep enjoying the fruits of hosting the segment of financial services it currently does and may even get some new business. If however we haven’t made the list, it could have proved disastrous to the Island’s financial sector; a bit like getting a truck rental and driving through a field of poppies; there wouldn’t be much left by the time you came out the other end.

Bank of England Base Rates

It must be pretty distressing for people living off their savings, as the drop means that their income has dropped drastically. But it is good news for people with mortgages, especially people who are now on negative interest rates. This came about from banks offering mortgages at 0.5%, even 1% below base rate 2 years ago. This made sense back then, but now it technically means that the bank should be paying them for borowwing the money. How crazy is that.

The thing to do here however is to maintain your mortgage payments. Instead of paying off interest you pay more of the capital; with the net result that you shorten the life of your mortgage. Personally, I’ve tried pushing my mortgage payments back up to what they were in the beginning and so far I’ve knocked 5 years off my 25 year mortgage.

Now to go see if I can find myself one of these negative rate mortgages. If you can get one of those mortgages, you might just be able to invest in that super yacht and retire for life.

So, the official word is out, the UK is in recession for the first time since 1991. The technical definition of recession is when the economy shrinks for 2 successive quarters, and that’s just what happened. Last quarter the economy deflated by 0.6% and in the last 3 months, the economy slowed by another 1.5%. Considering that happened over Christmas, which is supposed to be one of the busiest shopping periods of the year. Granted, the rest of the economy slows down but you don’t normally expect to see these sort of figures.

The pound is also losing value compared to other currencies around the world, which has the effect of making it harder for people to spend money abroad. For example, a tub of Ephedrasil hardcore costs $79 which today is around £58. Some time ago, this used to cost £45 just a few weeks ago. It’s not all bad news though; exporters get more for their products, assuming that they can make the sales they are after. And people being paid in dollars get more bang for their buck, figuratively speaking.

How has the recession affected you?

Another similar subject, is finance, particularly in the world of insurance. Insurance is really all about managing some sort of risk. The formal disciple, called risk management, has evolved into a practice where organisations recognise and measure the level of risk they are exposing themselves to, and put in place plans for avoiding, mitigating or absorbing that risk. But this also effects each and every one of us in a simple form. I’m thinking about taking out a car or bike insurance policy. What this does is pass on the risk of some unforeseen event from yourself to the insurance company who has the financial backing to be able to deal with that sort of eventuality. The insurance company collects premiums from people who want to be covered and uses these to foot any claims that may arise. Premiums are calculated by measuring the risk that your policy covers, which is really a function of the likelihood and the financial cost of one of a set of events happening.

It’s quite fascinating to see the different flavours of insurance available to people. I was looking through the FAQ page on the Autonet Insurance website just to get an idea of what is available. They claim to be the country’s largest independently owned insurance brokers and have a huge selection of different insurance policies on offer (including quad-bikes which is cool). Must bookmark them for future reference.

Here’s an interesting way to present some golden rules to help the general public deal with the current recession. It’s a great post today that lists the 10 Commandments of Personal Finance. Here’s a summary:

• Though Shalt Take Action
• Though Shalt Pay Off All Credit Card Debt
• Thou Shalt Understand the Difference Between Wants and Needs
• Thou Shalt Live on Less Than You Earn
• Thou Shalt Pay Yourself First
• Thou Shalt Set Financial Goals
• Thou Shalt Educate Yourself and Be Responsible for Your Decisions
• Thou Shalt Save and Invest
• Thou Shalt Protect Your Finances
• Thou Shalt Donate to Worthy Causes and Those Less Fortunate

Some of these are down to common sense, but it’s amazing how many people aren’t aware of the fundamentals. I have a friend who’s an expert at keeping himself and his family healthy (he can talk about healthy grilling for hours), but really doesn’t have an idea how to manage his finance. I bookmarked the post to send to him because it’s versed in a way he might understand.

So pop down to The Abundant Alliance Blog and read the detail.

The problem is that forcast sales of the goods produced by the Japanese economy is down. This is felt by factories and support industries, all the way down janitor and programmer jobs, everyoen is affected. Unfortunately until a positive outlook appears, everyoen is going to be affected and this is the net effect of the economic crisis we are facing.

There have been a couple of ripples here in the Isle of Man, but the politicians feel that we will not technically suffer a recession. The reality is that the Island has had a number of years of unprecedented growth and the hope is that any short-term blips will be cancelled out by long-term growth. We’ll just have to watch that …