Plunging pound to cost Britons £1billion in lost travel cash and higher mortgages for expats.

From The Mail Online

British holidaymakers, overseas property owners and expats are nearly £1 billion a year worse off because of the plummeting value of the pound.

The UK’s economic woes have stripped hundreds of pounds a month from those with mortgages and pensions that have to be transferred in to euros.

Every day since the currency plunge began at the start of the year more than £10 has been wiped off the annual income of a typical expat living in Spain.

Families who travel to the U.S. and Europe are also being forced to cut back on their holiday spending by hundreds of pounds.

Fears over further plunges have led to a sales frenzy of currency cards, which travellers can load up with euros or dollars at that day’s rate. Specialist International Currency Exchange has seen orders for pre-paid euro cards soar by 547 per cent in the past month, while those for the U.S. dollar card are up an astonishing 1,050 per cent.

The value of the pound in your pocket has dropped by 7 per cent against the euro and U.S. dollar since January.

Early last month, one pound would have got you €1.24 or $1.63 — last night it stood at just €1.15, the lowest for 18 months, and $1.52, a near three-year low. In 2007, when the banking crisis began, £1 would have got €1.43 and $2.04.

The slump has pushed up the cost of travelling abroad for Britons, with everything from sangria to ski passes becoming more expensive.

Experts believe sterling will plummet further against the euro as Britain balances on the brink of a triple-dip recession.

Nearly 400,000 Britons live in Spain; 152,000 in France; 104,000 in Germany; and just under 30,000 in Italy —the majority are retired.

While the weekly basic state pension is £107.45, currency specialists say the average amount claimed by a British couple living in Spain is £628 a month.

This would have given them a monthly €778 at the turn of the year. But now, at a rate of just €1.15 euro to every pound, they would receive only €722 — a drop of €56 or nearly £50.

This has wiped £600 off their annual income over the 58 days since the slump began — a massive hit, especially for anyone on a small fixed pension.

If even just half of the 686,000 expats receiving a pension in Europe suffer such an income drop, it will lead to an income loss of more than £205 million.

A family of five who booked early in January for a trip to the U.S. must plan to spend an average extra $330 dollars — that’s £217 more — on food, drinks and shopping. Britons who go on holiday to the U.S. will be £72.4 million poorer.

Since last summer, the euro has fallen roughly 10 per cent. This means £500 in your pocket can buy just €575 compared with €640. In total, figures suggest British tourists who travel to the Eurozone this year will be £304 million a year worse off.

Owners of second homes in Europe and the U.S. must fork out more. For those with mortgaged properties in the Eurozone it will be an extra £55 a month.

In total, the estimated 500,000 Britons with an overseas mortgage in Europe must find an extra £216 million a year to cover the average mortgage.

Add this to nearly £600 million lost on holiday spending and pension income, and the total approaches £1 billion.

The drastic currency slide is down to a number of body blows being dealt to sterling’s reputation. Since the turn of the New Year, a growing lack of confidence in the UK’s stuttering economy has convinced financial investors such as pension funds and banks as well as foreign exchange speculators to look elsewhere.

Where once the pound was seen as a safe haven — meaning they were confident its value would rise because of promising growth — it has begun to lose out to the U.S. and even the Eurozone.
When Moody’s, a ratings agency, decided the UK was no longer worth its so-called ‘triple-A’ rating late last week, it prompted a fresh sell-off.

Now there is burgeoning concern that the Bank of England could also add to the pound’s woes.
If it unleashes a further bout of Quantitative Easing (QE) — its policy of printing money to try to kick-start economic growth — a knock-on effect could see the pound’s value deflated further.
This is because QE keeps interest rates low, which, in turn, makes sterling an unattractive place to invest for returns.

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If you have not already seen it you may like this article from The Algarve Daily News about the new idea of getting a tax receipt for every thing you buy. Here is the answer. Read it all the way through.

Invoice war hots up “You need a search warrant” says Justice Minister

Paula Teixeira da Cruz, Portugal’s Justice Minister

Paula Teixeira da Cruz, Portugal’s Justice Minister, says no one can be forced to show invoices outside a shop, “You need a search warrant.”

The Justice Minister today clarified the legal position that citizens are not required to show anybody an invoice even if they are approached by a tax inspector on leaving a shop or restaurant.

Teixeira da Cruz believes that there has been “a hoax” around the subject, noting that there are limits to tax inspection.

“If I am leaving an establishment, no one can go up to me and search me to find the bill. You need a search warrant.”

On February 13^th the Ministry of Finance reported that “the new rules create the necessary conditions for surveillance activities by the Tax Authority which can be carried out outside shops to ensure that consumers actually have got invoices for purchases made.”

Vítor Gaspar’s ministry could not say how many people so far had been fined, nor the value ​​of any such fines.

A week later the Secretary of State for Fiscal Affairs, Paulo Nuncio, insisted that the obligatory issuing of invoices is aimed at combating tax evasionassured but admitted to Parliament that no widespread tax snooping initiative was in operation.

This system is in chaos as those responsible for devising and running such iniatives, deeply unpopular with the public, could at least launch them in a coherent way with clear guidelines.

One loophole is already being explioted by thousands of Portuguese shoppers who are demonstrating a finely-tuned sense of humour.

There is no law that states that the name on an invoice must be the purchaser’s, so jokers across the land are obtaining invoices in the names of V. Gaspar and P. Passos Coelho and other ministers who already, according to tax office records, have made purchases far in excess of their ministerial salaries, triggering an automatic alarm bell to ring in their local tax office for living far beyond their stated means.

An upright sort of information source such as algarvedailynews would be foolish to pass on these numbers, so here they are:

Miguel Relvas NIF 158792793

Vitor Gaspar NIF 120528223

Passos Coelho NIF 177142430