New employment protections

New legislation, including three Government backed cross party Acts, came into force from 6 April 2024.

Pregnant women and new parents will now receive special treatment in a redundancy situation, as a suite of new laws are introduced – delivering the Government’s plan to support families and back hardworking Brits.

New laws will protect workers by strengthening existing redundancy protections to cover pregnancy and a period of time after parents return to work.

The Government-backed package of Acts will also boost support to vulnerable workers offering greater flexibility and confidence to workers and businesses – to help galvanise productivity, help grow the economy and tackle inactivity.

Families will receive new employment protections, including redundancy protections for pregnant women and new parents and a new leave entitlement for unpaid carers. In addition, there will be new flexible paternity leave and pay for parents of babies due on or after 6 April 2024. 

Against a backdrop of skills and labour shortages, these measures will help businesses to attract and retain talented staff. The measures also support groups more likely to fall out of the workforce, such as parents and disabled people, enabling them to thrive in the workplace.

Source:Other| 08-04-2024

Assistance with debt management

Earlier this month, saw the 10th anniversary of the StepChange Debt Charity’s annual Debt Awareness Week. This is designed to shine a spotlight on the causes of problem debt.

The focus on this year's campaign is looking at the main barriers to getting debt advice. This includes understanding that many people can take too long to get the help they need because they:

  • Don’t understand what debt advice is and how it works;
  • Are dealing with anxiety, stress or a mental health condition;
  • Are worried about my credit file;
  • Never have enough time to get debt advice; or
  • Feel ashamed and do not want their loved ones to find out.

It is important to be aware that there are various options available to help people who have serious debts that they cannot pay. Insolvency solutions include bankruptcy, Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs).

A senior leader within the bankruptcy and Debt Relief Order teams at the Insolvency Service has the following usual advice:

‘The first step for people who are struggling to pay off their debts is to seek free, regulated debt advice. They will identify the solution that is best for them. 

Sometimes this will be a formal solution, like bankruptcy or a Debt Relief Order. But a regulated debt adviser will make sure that whatever people decide will be the right solution for them. 

Your first step is picking up the phone, getting on webchat or visiting a debt advice office, and having that conversation.’

Source:Other| 25-03-2024

Rent a Room Scheme – another income stream

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home to create a valuable tax free income stream. If you are using this scheme, you should ensure that rents received from lodgers during the current tax year do no exceed £7,500. The tax exemption is automatic if you earn less than £7,500 and there are no specific tax reporting requirements. Homeowners can opt out of the scheme and record property income and expenses as usual if this is beneficial.

The relief applies to the letting of furnished accommodation and is used when a bedroom is rented out to a lodger by homeowners in their home. The relief simplifies the tax and administrative burden for those with rent-a-room income up to £7,500. The limit is reduced by half if the income from letting accommodation in the same property is shared by a joint owner of the property.

The rent-a-room limit includes any amounts received for meals, goods and services provided, such as cleaning or laundry. If gross receipts are more than the limit taxpayers can choose between paying tax on the actual profit (gross rents minus actual expenses and capital allowances) or the gross receipts (and any balancing charges) minus the allowance – with no deduction for expenses or capital allowances.

Source:HM Revenue & Customs| 25-03-2024

Cost of living final payment 2023-24

The Cost of Living support package has been designed to help over 8 million households in receipt of means tested benefits. The details of Cost of Living Payments due in the 2023-24 tax year were published in 2023 and have recently been updated with details of the final payment.

Eligible recipients will receive up to 3 Cost of Living Payments of £301, £300 and £299 during the course of the current tax-year. This includes those receiving pension credit and these payments will be made separately from other benefit payments. The first payment of £301 was made between April-May 2023 and the second payment of £300 was paid during August-September 2023.

The third payment of £299 was due to be paid in spring 2024. It was confirmed that 700,000 families who receive tax credits and no other qualifying benefits would receive their £299 Cost of Living Payment between 16 and 22 February 2024. 

In addition, more than 7 million eligible UK households have already received their £299 payments directly from the Department for Work and Pensions (DWP), these payments were made between 6 and 22 February 2024.

The payment from HMRC to tax credits customers will appear on bank statements as ‘HMRC COLS’, referencing Cost of Living Support. Those receiving the payment from DWP will see the payment reference as their National Insurance number followed by ‘DWP COL’.

Source:Department for Work & Pensions| 18-02-2024

Setting up a payment plan with HMRC

The 31st of January is a key date for those of us who are registered for self-assessment. There are three deadlines:

  1. The closing date to file your 2022-23 tax return without incurring an initial £100 late filing penalty.
  2. The date by which any balance of tax, NIC, or student loan payback needs to be made for 2022-23.
  3. Due date for making the first payment on account for 2023-24.

What to do if you cannot afford to make these payments

HMRC will allow taxpayers who cannot meet these tax payments by 31st of January, to spread the cost by applying for a formal HMRC payment plan.

The instructions posted on the GOV.uk website are reproduced below:

Setting up a payment plan

To set up a payment plan you will need:

  • the relevant reference number for the tax you cannot pay, such as your unique tax reference number;
  • your UK bank account details – you must be authorised to set up a Direct Debit; and
  • details of any previous payments you have missed.

You may be able to set up a payment plan online, depending on which type of tax you owe and how much you owe.

If you owe tax from self-assessment

You can set up a self-assessment payment plan online if you:

  • have filed your latest tax return;
  • owe £30,000 or less;
  • are within 60 days of the payment deadline; and
  • do not have any other payment plans or debts with HMRC.

HMRC will ask you about your income and spending when you set up your plan.

Source:Other| 08-01-2024

Help with childcare costs

HMRC is reminding parents that they may be eligible for Tax-Free Childcare (TFC) to help pay for childcare costs. The scheme was used by almost 650,000 families during the 2022-23 tax year. This represented a significant increase over the previous year.

The TFC scheme can help parents of children aged up to 11 years old. The TFC scheme helps support working families with their childcare costs. There are many registered childcare providers including childminders, breakfast and after school clubs and approved play schemes signed up across the UK. Parents can pay into their account regularly and save up their TFC allowance to use during school holidays. 

The TFC scheme provides for a government top-up on parental contributions. For every £8 contributed by parents an additional £2 top up payment will be funded by Government up to a maximum total of £10,000 per child per year. This will give parents an annual savings of up to £2,000 per child (and up to £4,000 for disabled children until the 1 September following their 16th birthday) in childcare costs. 

The TFC scheme is open to all qualifying parents including the self-employed and those on a minimum wage. The scheme is also available to parents on paid sick leave as well as those on paid and unpaid statutory maternity, paternity and adoption leave. In order to be eligible to use the scheme parents will have to be in work at least 16 hours per week and earn at least the National Minimum Wage or Living Wage. If either parent earns more than £100,000, both parents are unable to use the scheme. The scheme is also not available if the parents or carers are in receipt of tax credits, Universal Credit or childcare vouchers.

Source:HM Revenue & Customs| 04-06-2023

Help to Save extended to April 2025

HMRC has confirmed that plans to extend the Help to Save scheme by 18 months, until April 2025 have been confirmed.

The Help to Save scheme is intended to help those on low incomes to boost their savings. Eligible users of the scheme can save between £1 and £50 every calendar month and receive a 50% government bonus. The 50% bonus is payable at the end of the second and fourth years and is based on how much account holders have saved. The bonus is paid directly into the account holder’s chosen bank account.

This means that account holders on low incomes can receive a maximum bonus of up to £1,200 on savings of £2,400 for 4 years from the date the account is opened. The scheme is open to most working people who receive Working Tax Credits or Universal Credit.

Almost 360,000 people have opened Help to Save accounts since the scheme was launched in September 2018 and an additional 3 million individuals could still benefit from the savings scheme as a result of the extension.

The government also published a consultation on the scheme that is looking at how the scheme can be reformed and simplified.

Source:HM Revenue & Customs| 29-05-2023

Cost of living payments 2023-24

The Cost of Living support package has been designed to help over 8 million households in receipt of mean tested benefits. The details for Cost of Living Payments due in the 2023-24 tax year have been published. 

Eligible recipients will receive up to 3 Cost of Living Payments of £301, £300 and £299. This includes those receiving pension credit. These payments will be made separately from other benefit payments.

The total payments expected are as follows:

  • £301 paid between 25 April 2023 and 17 May 2023 for most people on DWP benefits
  • £301 paid between 2 and 9 May 2023 for most people on tax credits and no other low income benefits
  • £300 to be paid during autumn 2023 for most people
  • £299 to be paid during spring 2024 for most people

There are also additional payments that may be made such as a Disability Cost of Living Payment of £150 that is expected to be paid to qualifying individuals during the summer.

An additional one-off payment of £150 or £300 will be paid to pensioners during winter 2023-24. The Winter Fuel Payment is provided by the government to help older people keep warm during winter. The amount a pensioner will receive depends on a number of factors including their age and the age of other people living with them.

HMRC’s guidance on the payments has been updated to clarify that claimants will not get a Cost of Living Payment for a low income benefit if their benefit is reduced to £0 because they received a ‘sanction’. They may still receive a Cost of Living Payment if they had a 'hardship payment' because they received a 'sanction'.

Source:Department for Work & Pensions| 08-05-2023

Pensioner Cost of Living Payment 2023-24

The Cost of Living support package has been designed to help over 8 million households in receipt of means tested benefits. The details for Cost of Living payments due in the 2023-24 tax year have been published.

Eligible recipients will receive up to three Cost of Living Payments of £301, £300 and £299. This includes those receiving pension credit and these payments will be made separately from other benefit payments.

The payments are expected to be made as follows:

  • £301 paid between 25 April 2023 and 17 May 2023 for most people on DWP benefits
  • £300 paid during autumn 2023 for most people
  • £299 paid during spring 2024 for most people

An additional one-off payment of £150 or £300 will be paid to pensioners during winter 2023-24. The Winter Fuel Payment is provided by the government to help older people keep warm during winter. The amount a pensioner will receive depends on a number of factors including their age and the age of other people living with them.

HMRC’s guidance will be updated with the qualifying dates for the payment when they are published. Pensioners will be sent a letter in October or November telling them how much Winter Fuel Payment they will get if they are eligible. Any money pensioners receive for the Winter Fuel Payment is tax-free and will not affect any other benefits they may receive. The payment is not means-tested.

Source:Department for Work & Pensions| 27-03-2023

Spring Budget 2023 – Childcare changes

One of the main areas targeted by the Spring Budget was changes to childcare. Billed as a revolution in childcare, the Chancellor, Jeremy Hunt, said that he wanted to reform the childcare system to help more than a million women come back to work. 

The 30-hours per week of funded childcare for eligible 3 to 4-year-olds in England will be extended to children from 9-months of age. This reform will be introduced in stages starting with the addition of 15-hours of free care for 2-year-olds from April 2024. The 15-hours will be extended to all children from 9-months from September 2024 before increasing to 30-hours from September 2025.

All schools will also be expected to offer breakfast and 'wraparound' clubs by September 2026 so all school-age parents can drop-off and collect their children between 8 am and 6 pm.

Universal credit provision on childcare is also being improved. This includes the government paying the upfront payment necessary to access subsidised childcare for any parents who are moving into work or want to increase their hours.

There will also be an increase in the maximum they can claim to £951 for one child and £1,630 for two children, an increase of almost 50%.

The Chancellor also announced an increase in the funding paid to nurseries providing free childcare by £204m from this September rising to £288m next year. The government will also change the minimum staff-to-child ratios from 1:4 to 1:5 for two-year-olds in England (the same as Scotland). The new ratios will remain optional. 

Source:HM Treasury| 15-03-2023

Mortgage Guarantee Scheme extended

The Mortgage Guarantee Scheme was set to end on 31 December 2022. In a last-minute announcement from HM Treasury, it was confirmed that the scheme will now be extended for a further 12 months until 31 December 2023.

The scheme helps prospective home buyers (mainly first-time buyers) who only have a small deposit and may find getting a traditional mortgage difficult. Under the scheme, lenders can offer 95% mortgage products.

The scheme has assisted over 24,000 households since it was launched in April 2021.

The scheme is open to first time buyers and home movers across the UK. Home buyers can purchase properties valued at up to £600,000 and both new-build and existing properties are eligible.

The government provides lenders with the option to purchase a guarantee on the top-slice of the mortgage (over 80%). Lenders will also take a 5% share of net losses above this 80% threshold. This helps to ensure that lenders are not motivated to provide poor quality loans. Lenders also need to pay the government a commercial fee for each mortgage in the scheme. The mortgage guarantee is valid for up to seven years after the mortgage is taken out.

Source:HM Treasury| 02-01-2023

Second cost of living payment

Back in May 2022, the then Chancellor Rishi Sunak announced a package of support measures targeted mainly to the most vulnerable members of society. One of the main measures was the Cost of Living support package to help over 8 million households in receipt of mean tested benefits. 

These households were set to receive a payment of £650 before the end of the year with the DWP making the payment in 2 lump sums. The first payment of £326 was made in July and it has been confirmed that the second payment of £324 will be made in November.

The money will be paid between 8 November and the 23 November. The second payment will automatically be paid into the bank accounts of those eligible in England, Scotland, Wales and Northern Ireland who receive a qualifying benefit, meaning they will not need to do anything to receive the money.

Some individuals who are not on a qualifying DWP benefit may still be eligible for the £324 payment as HMRC are also making payments to those who receive tax credits and no other eligible benefits.

The Work and Pensions Secretary, Chloe Smith said:

‘Millions of families will soon see a £324 cash boost as part of our extensive £1,200 support package, helping to raise incomes and manage the rising cost of living.’

An additional one-off payment of £300 will also go to the over 8 million pensioner households across the UK who receive the Winter Fuel Payment. This amount will be paid in addition to any other one-off support a pensioner household is entitled to.

The Winter Fuel Payment is not taxable and does not affect eligibility for other benefits. The government will make these payments directly to households across the UK. This money will be paid out as top-up to pensioner households annual Winter Fuel Payment in November / December.

Source:Department for Work & Pensions| 17-10-2022

Protecting your personal data

The next time you receive a request, by phone, text, or email, that requires you to take an action or verbally disclose information about yourself or your finances, alarm bells need to ring.

Criminals now use every means at their disposal to obtain details that will enable them, ultimately, to cause you financial harm. For example, they might:

  • Pretend they are the tax office and offer you a tax refund or threaten you with legal action if you do not pay tax, you apparently owe.
  • Pretend you have inherited from a distant relative and all you need to do is send them certain personal details.
  • Call your mobile or landline using automated software and offer you some form of reward, financial penalty, or legal action unless you immediately select a number on your keypad.

With your personal details, name, address, etc., they can pretend they are you and borrow money in your name. With your bank details they can transfer money from your bank account.

Criminals can do this from the comfort of their homes, all they need is a computer. And so, be cautious when responding to any request for personal information or bank details. If in doubt, do not respond. Instead, contact a trusted adviser, call the tax office or your bank using contact details published on official websites.

Source: Other Wed, 19 May 2021 00:00:00 +0100

Passports – expensive items

Many families will be organising UK holidays this year and so passports may be left in draws for 2021.

But when the market for overseas holidays opens up, better check that your passports still meet that important “6 months before they expire” condition if you don’t want to be turned back when you check in for your flight.

If travelling to the EU, you need to have at least 6 months left on an adult or child passport (not including Ireland).

Currently, charges to renew will vary depending on the way you apply. Unsurprisingly, applying online is cheaper than filling out a form.

Current charges are:

How you applyOnlineBy paper form
Adult (16 and over) standard 34-page passport£75.50£85
Adult (16 and over) 50-page frequent traveller passport£85.50£95
Child (under 16) standard 34-page passport£49£58.50
Child (under 16) 50-page frequent traveller passport£59£68.50
Passport for people born on or before 2 September 1929FreeFree

You’ll pay a different fee if you apply for a passport from another country. 

Source: Other Wed, 17 Mar 2021 00:00:00 +0100

What is pensions credit?

Pension Credit is an income-related benefit made up of 2 parts – Guarantee Credit and Savings Credit.

Guarantee Credit tops up your weekly income if it’s below £173.75 (for single people) or £265.20 (for couples). You may still be eligible if you have savings, a pension or your own home.

Savings Credit is an extra payment for people who saved some money towards their retirement, for example a pension.

You may not be eligible for Savings Credit if you reached State Pension age on or after 6 April 2016. You do not pay tax on Pension Credit.

What you'll get:

 Guarantee Credit per weekSavings Credit per week
Single peopleTop up to £173.75Up to £13.97
CouplesTop up to £265.20Up to £15.62

You might get more if you’re a carer, severely disabled, responsible for a child or young person, or have certain housing costs.

Use the Pension Credit calculator on the GOV.UK website to work out how much you might get.

If you get Guarantee Credit you’ll also qualify for other benefits such as Housing Benefit, Council Tax Reduction, Cold Weather Payments and help with the costs of NHS services. 

Source: Other Tue, 02 Mar 2021 00:00:00 +0100