189c6a94 8eef 4518 a032 acf11de94ab9 800x380 - Have you claimed your Child Trust Fund cash?

Have you claimed your Child Trust Fund cash?

Young persons who turned 18 on or after 1 September 2020 may have cash waiting in a dormant Child Trust Fund (CTF) account. This could be as much as or more than £1,000. The actual amount on deposit depends on certain factors.

Children born after 31 August 2002 and before 3 January 2011 were entitled to a CTF account provided they met the necessary conditions. These funds were invested in long-term saving accounts for newly born children. HMRC has confirmed that there are many thousands of teenagers that have turned 18 and not yet claimed the cash to which they are entitled.

Around 7 million CTF accounts were set up since the scheme was launched in 2002, roughly 6 million by parents or guardians and a further 1 million set up by HMRC where parents or guardians did not open an account.

Around 55,000 accounts mature each month and HMRC has created a simple online tool to help young people find out where their account is held.

Economic Secretary to the Treasury, John Glen, said:

‘It’s fantastic that so many young people have been able to access the money saved for them in Child Trust Funds, but we want to make sure that nobody misses out on the chance to invest in their future.’

If you’re unsure if you have an account or where it may be, it’s easy to track down your provider online.

The actual CTF accounts are not held by HMRC, but by CTF providers who are financial services firms. Anyone can pay into the account, with an annual limit of £9,000, and there’s no tax to pay on the CTF savings interest or profit.

Source: HM Revenue & Customs Tue, 12 Oct 2021 00:00:00 +0100
83ca44c2 74a4 453f 9033 3cb404b85996 800x380 - £500m support for vulnerable households

£500m support for vulnerable households

The government has launched a new £500 million package of support for vulnerable households. The new Household Support Fund will be used to help those most in need with essentials over the coming months as the country continues its recovery from the pandemic.

The fund will be used to help support millions of households in England and monies will be distributed by councils. This means that local councils will also be able to use the funding to provide discretionary support to vulnerable households. This could include using small grants to meet daily needs such as food, clothing, and utilities. Cash will be made available to Local Authorities in October 2021.

The Barnett formula will apply in the usual way to additional funding in England. The devolved administrations will therefore receive up to £79m of the £500m. This will be allocated as follows: £41m for the Scottish Government, £25m for the Welsh Government and £14m for the Northern Ireland Executive.

This fund is in addition to other previously announced measures including the Warm Home Discount which provides a £140 rebate on energy bills each winter to over 2.2 million low-income households and the Cold Weather Payment which provides £25 extra a week for poorer households when the temperature is consistently below zero.

Source: Department for Work & Pensions Tue, 05 Oct 2021 00:00:00 +0100
f6fcf8ca 0ba0 437f a7d4 0eed0239be78 800x380 - MTD for Income Tax has been delayed by one year to April 2024

MTD for Income Tax has been delayed by one year to April 2024

The introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) has been delayed by one year until April 2024. This change was announced in a Written Statement to Parliament. The reason for the delay was given as combination of the issues many UK businesses and their representatives are facing as a result of the pandemic as well as feedback from interested parties.

MTD for ITSA will fundamentally change the way businesses, the self-employed and landlords interact with HMRC. The regime will require businesses and individuals to register, file, pay and update their information using an online tax account. From April 2024, the rules will apply to taxpayers who file Income Tax Self-Assessment tax returns with business or property income over £10,000 annually.

General partnerships will not be required to join MTD for ITSA until a year later, in April 2025. The date other types of partnerships will be required to join will be confirmed in the future. The new system of penalties for the late filing and late payment of tax for ITSA will also be aligned with the new MTD dates.

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the MTD for ITSA. The pilot is not affected by the delay and will be extended in 2022-23 in preparation for larger scale testing in 2023-24. Under the pilot, qualifying landlords and sole traders (or their agents) can use software to keep digital records and send Income Tax updates instead of filing a Self-Assessment tax return.

The MTD regime started in April 2019 for VAT purposes only when businesses with a turnover above the VAT threshold were mandated to keep their records digitally and provide their VAT return information to HMRC using MTD compatible software. From April 2022, MTD will be extended to all VAT registered businesses with turnover below the VAT threshold of £85,000.

Source: HM Government Mon, 27 Sep 2021 00:00:00 +0100
c12a49d4 f2a1 4efc 8e7b ce4f260b8ef9 800x380 - OTS releases video update

OTS releases video update

The Office of Tax Simplification (OTS) was established in July 2010, to provide advice to the Chancellor on simplifying the UK tax system. The OTS has recently published a recording of an online video update setting out its recent publications on three separate issues. 

The insights into tax changes that have been considered by the OTS are as follows:

  1. Capital Gains Tax first and second reports. The first report looks at the policy design and principles underpinning the tax whilst the second report explores key technical and administrative issues. This included recommendations to align the CGT rates with Income Tax rates, changes to Business Asset Disposal Relief, improved CGT guidance and a review of main residence relief.
  2. Making better use of third-party data. The report sets out proposals for making better use of data held by third parties, such as reporting interest on savings and investments from banks directly to HMRC. 
  3. Exploring a change to the UK tax year end date. The OTS has explored changing the 5 April year end date for individuals. The OTS examined what a change would entail, and what benefits it would bring (looking at 31 March and 31 December year end dates). If the government wants to take this further, then additional scoping work and early planning for longer term implementation would be required. 
Source: Other Mon, 27 Sep 2021 00:00:00 +0100
6ab3e248 5135 4643 8959 4701df865b32 800x380 - Student tax scam warning

Student tax scam warning

HMRC is warning new students starting university that they could be targeted by scammers trying to steal their money and personal details. As new students start the academic year, they can be particularly vulnerable to tax scams. This is especially prevalent if they have a part-time job and are new to interacting with HMRC. This year, there is a significant increase in the numbers of students attending university and means that more young people may choose to take on part-time work. 

Many tax scams are directly targeting university students. Fraudulent emails and texts will regularly include links which take students to websites where their information can be stolen. Between April and May this year, 18- to 24-year olds reported more than 5,000 phone scams to HMRC.

These scams often offer fake tax refunds which HMRC does not offer by SMS or email.  Students can also be approached to act as ‘money mules’, with offers of various rewards for transferring funds through their own, genuine financial accounts, inadvertently laundering criminal funds.

Commenting on the warning, HMRC’s Head of Cyber Security Operations at HMRC, said: 

‘Our advice is to be wary if you are contacted out of the blue by someone asking for money or personal information. We see high numbers of fraudsters contacting people claiming to be from HMRC. If in doubt, our advice is – do not reply directly to anything suspicious, but contact HMRC through GOV.UK straight away and search GOV.UK for HMRC scams’ .

Source: HM Revenue & Customs Sun, 19 Sep 2021 00:00:00 +0100
597b4dd9 4bc2 4730 8c5f ad84696bf04d 800x380 - Government announces winter COVID plan

Government announces winter COVID plan

The Prime Minister, Boris Johnson has set out the government’s autumn and winter plan for managing Covid. 

The government is aiming to sustain the progress made and prepare the country for future challenges, while ensuring the National Health Service (NHS) does not come under unsustainable pressure.

The government plans to achieve this by:

  • Building our defences through pharmaceutical interventions: vaccines, antivirals and disease modifying therapeutics.
  • Identifying and isolating positive cases to limit transmission: Test, Trace and Isolate.
  • Supporting the NHS and social care: managing pressures and recovering services.
  • Advising people on how to protect themselves and others: clear guidance and communications.
  • Pursuing an international approach: helping to vaccinate the world and managing risks at the border.

This is known as Plan A. There are of course a number of variables that could change the expected outlook including the outbreak of new variants and other seasonal respiratory diseases such as the flu.

If the data suggests the NHS is likely to come under unsustainable pressure, the government has prepared a Plan B for England. It is hoped that this plan will not be required but the plan contains certain measures which can help control transmission of the virus while seeking to minimise economic and social impacts. 

This includes:

  • Communicating clearly and urgently to the public that the level of risk has increased, and with it the need to behave more cautiously.
  • Introducing mandatory vaccine-only COVID-status certification in certain settings.
  • Legally mandating face coverings in certain settings.
Source: HM Government Sun, 19 Sep 2021 00:00:00 +0100
576abdd2 672f 47a7 9c59 12761422409d 800x380 - Budget date announced

Budget date announced

The Chancellor of the Exchequer, Rishi Sunak has confirmed that the next UK Budget will take place on Wednesday, 27 October 2021. This will be the Chancellor’s third Budget and the first one to revert back to the Autumn Budget schedule that was interrupted first by Brexit related issues and then by the coronavirus pandemic. It means that this year, 2021, will see 2 Budget’s the first that took place in March and the second that has been scheduled for October.  

Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s speech in October.

The Budget will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.

The Chancellor also confirmed that the 27 October 2021 will also see the government spending plans set out under the Spending Review 2021. The three-year review will set UK government departments’ resource and capital budgets for 2022-23 to 2024-25 and the devolved administrations’ block grants for the same period.

Source: HM Treasury Tue, 14 Sep 2021 00:00:00 +0100
5f97e1fd 4d02 4134 b32f f1828d9ab9dc 800x380 - Capped social care costs from October 2023

Capped social care costs from October 2023

The government has announced new plans to cap social care costs in England from October 2023. This change is expected to see the introduction of a new £86,000 cap on care costs across an individual’s lifetime.

There will also be the following measures of financial assistance for those without substantial assets:

  • Anyone with less than £20,000 of assets will not have to pay anything towards their care from their savings or the value of their home.
  • People with between £20,000 and £100,000 of assets will be eligible for some means-tested financial support on a sliding scale. 
  • The new upper capital limit of £100,000 is more than four times the current limit of £23,250. This means more people will be eligible for some means-tested Local Authority support.

If someone’s assets are over £100,000 then full fees must be paid. However, the maximum that a person will have to pay over their lifetime towards personal care costs will be £86,000 as a result of the new cap. If the payment of these fees means that their remaining assets fall below £100,000 then some further financial support should be available. Once the £86,000 cap is reached, Local Authorities will pay for all eligible personal care costs.

Individuals may choose to “top up” their care costs by paying the difference towards a more expensive service, but this will not count towards the cap. There is also an important exception for ‘living costs’ which could amount to additional significant costs. There will be a lot more detail on these changes to come and of course the old limits will continue for the next 2 years, and any monies paid will not be part of the new cap. 

Source: HM Government Tue, 14 Sep 2021 00:00:00 +0100
53d7dfc4 d873 4a5d ac83 6420225796d0 800x380 - Child benefit when child turns 16

Child benefit when child turns 16

Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August on or after a child’s 16th Birthday. Under qualifying circumstances, the child benefit can continue until a child reaches their 20th birthday. A qualifying young person is someone aged 16,17, 18 or 19 in full time non-advanced education or in approved training.

Some examples of full-time non-advanced education are:

  • A levels and other general academic qualifications of a similar standard, for example, Pre-U and the International Baccalaureate
  • T levels
  • Scottish Highers
  • NVQs and other vocational qualifications up to level 3
  • home education – if it started before your child turned 16 or after 16 if they have special needs
  • traineeships in England

A child would not qualify if entering advanced education such as a university degree or BTEC Higher National Certificate.

Approved training should be unpaid and can include:

  • Foundation Apprenticeships or Traineeships in Wales
  • Employability Fund programmes in Scotland
  • PEACE IV Children and Young People 2.1, Training for Success, or Skills for Life and Work in Northern Ireland

Any parents with children that remain in approved education or training should contact the child benefit office to ensure they continue receiving the child benefit payments to which they are entitled. No child benefit is payable after a young person reaches the age of 20 years.

The weekly rates of child benefit for the only or eldest child in a family is currently £21.05 and the weekly rate for all other children is £13.95.

Source: HM Revenue & Customs Mon, 06 Sep 2021 00:00:00 +0100
a6f09071 7b62 4ad7 b515 68dd100b5da8 800x380 - How to deal with tax appeals

How to deal with tax appeals

There are a number of options open to taxpayers who disagree with a tax decision issued by HMRC. It is important to note that not all decisions by HMRC can be appealed against. There is normally a 30-day deadline for making a claim, so time is of the essence.

If you or your business have been affected by the coronavirus outbreak, the time limit has been extended. HMRC will give you an extra 3 months to appeal. You should still send your appeal as soon as you can, and explain the delay is because of coronavirus.

The case worker, who made the decision, will look at your case again and consider your appeal. If there is no change, HMRC will then carry out a review using HMRC officers that were not involved in the original decision. A response to an appeal is usually made within 45 days, but can take longer if a complex issue.

If a taxpayer does not want a review or disagrees with the review, they can either appeal to the independent tax tribunal or use the Alternative Dispute Resolution (ADR) process. The ADR uses independent HMRC facilitators to help resolve disputes between HMRC and taxpayer. The use of the ADR seeks to find a fair and quick outcome for both parties, helping to reduce costs and avoid a tribunal case. 

Source: HM Revenue & Customs Tue, 31 Aug 2021 00:00:00 +0100