Consumers want high interest lenders to be taxed more
A recent survey carried out by BDO Stoy Hayward has revealed that one of the top demands being made by consumers in preparation for Gordon Brown’s pre-budget report, due on 6 th December, is an increase in tax for lenders that make high interest loans to consumers. The survey revealed that consumers were calling for Gordon Brown to introduce some form of ‘loan shark tax’ for companies that offered loans at extortionate interest rates.
Over 2000 UK taxpayers were included in the survey, and the results indicated that consumers in the UK want the government to tackle the issue of rising and unmanageable consumer debt by implementing this type of taxation in relation to high interest lenders. The survey revealed that consumers rated the government tackling consumer debt in this way as the third most important issue after tax based changes. With the UK taking responsibility for a third of all unsecured debt in Western Europe, it seems that consumers feel that it is now time that the problem was tackled.
Many consumers in the UK are struggling to keep up with repayments after being lumbered with loans that charge extortionate interest rates, making it very difficult for the borrower to repay the debt, as most of the repayments get swallowed up in interest. Although there are some good deals available on loans from a range of reputable lenders, many consumers are unsure when it comes to finding the best deals and calculating what sort of interest rate can be construed as competitive. It is advisable that consumers looking to take out a loan shop around and look for competitive deals rather than settling for high interest loans from companies that are willing to lend irresponsibly simply because they can then make huge profits through charging extortionate rates of interest.
One partner at BDO Stoy Hayward stated: "As personal insolvency in the UK reaches an all time high, consumers are calling for the government to intervene and penalize those finance providers they feel are making money out of consumer debt, presumably through irresponsible lending."
Alisdair Milton
25th November 2006
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