Tax Rebates Are Evil
We often get people asking us "How can I claim tax back" or "Can I get a tax refund" and whenever we secure the refund our clients are always very happy, as you would maybe suspect. Recently we have begun to look at things from a different perspective. We should not be unhappy to receive a tax refund and if we ever owe money to the Inland Revenue we should be happy. The reason behind this thinking is that if we are due a tax refund it means that we have unnecessarily paid tax throughout the year and have effectively given the government a interest free loan for 12 months.
Imagine if you are given a tax rebate of one thousand pounds. If this one thousands pounds was put into an instant access savings account for year at 5% it would have returned a gross amount of 50 pounds. Therefore the cost to us of having the tax refund is 50 pounds.
Let me put it another way, how would you feel about this: You give me 100 pounds out of your wages each month, and in a years time I will give you one thousands two hundred pounds. It doesn't sound as attractive now does it?
The opposite is also true, we should be happy when we owe the government tax, it means that they have given us an interest free loan. This thinking might help put a sugar coating on any tax payments you might have.
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