One million eligible claimant families receiving tax credits, and no other means-tested benefits, will get the first 2023-24 Cost of Living Payment from Tuesday 2 May 2023, HM Revenue and Customs (HMRC) has confirmed.
The £301 UK Government payment will be paid automatically into most customers’ bank accounts between Tuesday 2 and Tuesday 9 May 2023 across the United Kingdom. Only eligible families who receive tax credits and no other means-tested benefits will receive the payment from HMRC.
This is the first of three payments totalling up to £900 for those eligible in 2023-24.
Chief Secretary to the Treasury, John Glen, said:“Higher prices make life difficult for everyone, which is why our priority is to halve inflation this year.
“But we are also going further to support those struggling most, with a total package of support worth an average of £3,300 per household this year and next – including up to £900 in direct cash payments starting next month for families receiving tax credits.”
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:“The £301 Cost of Living Payment will deliver vital financial help to eligible tax credit customers across the UK. Further support will be paid in autumn 2023 and spring 2024 to those entitled to payment.
“HMRC will pay eligible tax credit customers automatically and with no action required from the customer, to make this as simple and helpful as it can possibly be.”
The payment will show as ‘HMRC COLS’ in customers’ bank and building society accounts, so that they know the money is cost of living support.
For tax credit-only customers to be eligible for the £301 Cost of Living Payment, they must have received a payment of tax credits in respect of any day in the period 26 January to 25 February 2023, or later be found to have been entitled to a payment for this period.
Eligible customers do not need to apply or contact HMRC to receive the payment.
The Department for Work and Pensions (DWP) recently announced that eligible households receiving DWP means-tested benefits will receive their first 2023-24 payment between Tuesday 25 April and Wednesday 17 May. This includes tax credit claimants who also receive other income-related benefits from DWP.
The payments are part of a package of wider UK Government support announced to tackle the cost of living in 2023-24, including:
· a further £300 Cost of Living Payment for eligible families in autumn 2023, with a payment of £299 in Spring 2024
· a £150 Disability Cost of Living Payment for eligible disabled people to be paid during summer 2023
· a £300 Pensioner Cost of Living Payment to be paid during winter 2023-24.
This means that the most vulnerable can receive up to £1,350 in direct payments over the coming financial year if eligible.
Including both DWP and HMRC payments, the latest Cost of Living Payment will see more than 8 million households across the UK receive their £301 cash boost by mid-May 2023.
The UK Government is offering help for households. Customers should check GOV.UK to find out what support they could be eligible for.
Businesses across the UK can take advantage of the Chancellor’s capital allowances package from today as the new business tax year begins.
The new business tax year comes in today 1 April 2023, with a new regime to boost investment and spur UK growth
£27 billion cut to corporation tax, via Chancellor’s new full expensing policy, expected to boost investment by 3% in each of the next three years
Other tax changes coming into force include more business rates relief, extension to the fuel duty cut and a £450 income tax cut for carers.
The package, announced at Spring Budget, comprises 100% full expensing and a 50% first-year allowance. It will mean the UK has the most generous capital allowance regime in the OECD worth £27 billion over the next three years, amounting to an effective £9 billion a year tax cut for companies.
The OBR expects this regime to boost investment by 3% over three years.
To mark the milestone, Financial Secretary to the Treasury visited Brompton Bikes in Greenford, London, who’ll be using full expensing to stimulate their growth.
Victoria Atkins, Financial Secretary to the Treasury, said: “We are determined to make the UK the best place in the world to do business, which is why from today businesses can start to benefit from the raft of tax cuts on offer to boost their growth.
“With full expensing, the more a company invests the less tax they’ll pay, and I encourage companies of any size to take full advantage of this world-leading reform.”
With the new 25% corporation tax rate coming in for the top 10% most profitable companies from today, and the super-deduction ending yesterday, the Chancellor used his Spring Budget to ensure that the UK’s tax system fosters the right conditions for enterprise, investment and growth.
Full expensing lets companies deduct 100% of the cost of certain plant and machinery investments from their profits before tax. It is available from 1 April 2023 to 31 March 2026. It provides the same generosity as the super-deduction, saving firms up to 25p in every £1 of qualifying investment and is for main rate assets – such as construction, warehousing and office equipment.
The 50% First-Year Allowance lets companies deduct 50% of the cost of other plant and machinery, known as special rate assets, from their profits during the year of purchase. This includes long life assets such as solar panels and lighting systems.
Minister Victoria Atkins visited Brompton Bikes in Greenford this week to see how these capital allowances will be used to help the firm invest and grow. The minister toured their factory, viewing a brand new state-of-the-art Autobraze machine and the production line. She also met a selection of 15 trainees currently on Brompton’s training programme.
Phill Elston, Operations Director at Brompton Bicycle, said: “The announcement of a super deduction replacement is great news for us. In previous years it has meant we could invest significantly in our production capabilities, upgrading equipment and building a more progressive factory; which has seen us move from making circa. 45,000 bikes per year in 2019, to around 100,000 bikes per year in 2022.
“Our mission is to improve how people travel around cities, which in turn creates happier communities, and the new expensing scheme helps to accelerate that goal.”
Other tax measures taking effect today include new domestic and ultra-long Air Passenger Duty bands.
For passengers flying in economy class, the new domestic band will be set at £6.50, a 50% cut to bolster UK-wide connectivity, while the new ultra long-haul band will be set at £91, meaning those who fly the furthest will pay the greatest level of duty.
Transport Secretary Mark Harper said: “Transport binds the United Kingdom together, and this cut to Air Passenger Duty will make travelling between our family of nations easier than ever.
“Boosting transport links between our four nations sustains jobs, creates opportunities and is an essential part of this Government’s plan to grow the economy.”
Further tax measures include:
To help household budgets further, the planned 11 pence rise in fuel duty has been cancelled, maintaining last year’s 5p cut for another twelve months, saving a typical driver another £100 on top of the £100 saved so far since last year’s cut.
More business rates relief, as part of the Chancellor’s £13.6 billion package from 2022’s Autumn Statement. This includes the freezing of the multiplier and the introduction of 75% relief for retail, hospitality and leisure businesses, helping the high street to thrive and compete with online firms.
Extending creative sector reliefs: theatres, orchestra and museums and galleries will benefit from a further 2 years of tax relief rates of 45%/50%. The museums and galleries exhibitions tax relief sunset clause will be extended for a further 2 years to allow these organisations to fully benefit from the extension of the highest rates.
The Annual Investment Allowance (AIA), an existing measure which also supports business investment, has been increased permanently to £1m today. This covers the investment needs of 99% of UK businesses.
Rebalancing the rates of Research and Development Expenditure Credit and the R&D SME scheme to ensure taxpayers’ money is spent as effectively as possible. As a result, today the UK now offers the joint-highest uncapped headline rate of R&D tax relief support in the G7 for large companies.
The government also committed to considering the case for further support for R&D intensive SMEs, and at Spring Budget announced that from today there will be an increased permanent rate of relief for the most R&D intensive loss-making SMEs. To support modern methods of innovation, for accounting periods beginning on or after today, businesses will also be able to claim for the costs of datasets and cloud computing under the R&D tax reliefs.
Expanding the Seed Enterprise Investment Scheme (SEIS) to help more UK start-ups raise higher levels of finance. This package will help over 2,000 start-up companies access finance.
Expanding the availability and generosity of the Company Share Option Plan (CSOP) scheme which will widen access to CSOP for growth companies and simplifying the process to grant options under the Enterprise Management Incentives (EMI) scheme.
On 6 April 2023 personal tax changes taking effect include removing tax-barriers that the medical community have made clear stop doctors working, delivering on the Prime Minister’s priority to cut NHS waiting lists so people can get the care they need more quickly.
The pensions annual tax-free allowance will increase by 50% from £40,000 to £60,000, the Money Purchase Annual Allowance will rise from £4,000 to £10,000, and the Lifetime Allowance charge will be removed.
The Office for Budget Responsibility estimate around 15,000 individuals will remain in the labour market because of the changes to the annual and lifetime allowances, many of whom will be highly skilled individuals, including senior doctors in the NHS.
Qualifying Carers Relief will be uprated with inflation from 6 April 2023 to representing a £450 per year income tax cut for carers. The uprating increases the amount of income tax relief from £10,000 to £18,140 plus £375-450 per week for each person cared for.
With the Easter school holidays nearly here, HM Revenue and Customs (HMRC) is reminding families in Scotland not to miss out on UK Government help to pay for childcare.
Tax-Free Childcare can pay for any approved childcare for children aged 11 or under, or 16 if the child has a disability. More than 26,000 families in Scotland used the scheme in December 2022.
Working families, where each parent or carer earns up to £100,000 can use it, meaning for every £8 paid into an online account they will receive an additional £2 from the government. This means parents and carers can receive up to £500 every 3 months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.
Whether children go to nursery, a childminder, attend breakfast, after school or holiday clubs, as well as out of school activities, Tax-Free Childcare could be used.
Opening a Tax-Free Childcare account is quick and easy and can be done at any time of the year. Families who have not yet signed up should check their eligibility and apply online today.
Victoria Atkins, Financial Secretary to The Treasury, said: “Tax-Free Childcare provides extra help with childcare costs which could make all the difference to working families and make childcare expenses more manageable.
“I would urge families to go online today to find out how it can help you.”
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Childcare is so important for working families, especially during school holiday time. Tax-Free Childcare provides financial support when it’s needed the most.
“Search ‘Tax-Free Childcare’ on GOV.UK to find out how it could help you.”
A Tax-Free Childcare account can be opened online in just 20 minutes. Money can be deposited at any time to be used straight away, or whenever it is needed.
Unused money in the account can be withdrawn at any time. Go to GOV.UK to register and get started.
Families could be eligible for Tax-Free Childcare if they:
· have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they can receive support until 1 September after their 16th birthday
· earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
· each earn no more than £100,000 per annum
· do not receive tax credits, Universal Credit or childcare vouchers .
The UK Government is offering help for households. Check GOV.UK to find out what cost of living support, including help with childcare costs, families could be eligible for.
The UK Government has extended the voluntary National Insurance deadline to 31 July 2023 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount they receive in State Pension.
This comes after members of the public voiced concern over the previous deadline of 5 April 2023.
The deadline extension was announced in a Written Ministerial Statement last week (7th March) and HM Revenue and Customs (HMRC) is urging taxpayers to ensure they don’t miss out.
Anyone with gaps in their National Insurance record from April 2006 onwards now has more time to decide whether to fill the gaps to boost their new State Pension. Any payments made will be at the lower 2022 to 2023 tax year rates.
As part of transitional arrangements to the new State Pension, taxpayers have been able to make voluntary contributions to any incomplete years in their National Insurance record between April 2006 and April 2016, to help increase the amount they receive when they retire. And after an increase in customer contact, the UK Government has extended the deadline l.to ensure people have time to make their contributions.
Victoria Atkins, The Financial Secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted.
“We recognise how important State Pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”
Thousands of taxpayers with incomplete years in their National Insurance record could be financially better off in their retirement if they make voluntary payments to top up any incomplete or missing years.
The UK Government has extended the voluntary National Insurance deadline to 31 July 2023 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount they receive in State Pension.
This comes after members of the public voiced concern over the previous deadline of 5 April 2023.
The deadline extension was announced in a Written Ministerial Statement last week (7th March) and HM Revenue and Customs (HMRC) is urging taxpayers to ensure they don’t miss out.
Anyone with gaps in their National Insurance record from April 2006 onwards now has more time to decide whether to fill the gaps to boost their new State Pension. Any payments made will be at the lower 2022 to 2023 tax year rates.
As part of transitional arrangements to the new State Pension, taxpayers have been able to make voluntary contributions to any incomplete years in their National Insurance record between April 2006 and April 2016, to help increase the amount they receive when they retire. And after an increase in customer contact, the UK Government has extended the deadline l.to ensure people have time to make their contributions.
Victoria Atkins, The Financial Secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted.
“We recognise how important State Pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”
Thousands of taxpayers with incomplete years in their National Insurance record could be financially better off in their retirement if they make voluntary payments to top up any incomplete or missing years.
A company which charged taxpayers significant sums to make claims for tax refunds has been stopped from operating.
Tax Credits Ltd (TCL) can no longer trade as a repayment agent after HM Revenue and Customs (HMRC) found they had committed serious anti-money laundering breaches.
As a result of breaching the regulations, which are predominately designed to prevent businesses being exploited by criminals to launder money, it is now a criminal offence for TCL to trade as a tax repayment agent.
The move comes weeks after HMRC outlined greater protections for customers using repayment agents.
Taxpayers can use repayment agents to make claims for repayment of tax, and while many customers are happy with the service they receive, a large number of taxpayers have complained about the lack of transparency in agents’ processes for signing up clients and high charges for using their services.
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “TCL have ignored their responsibilities under the anti-money laundering measures designed to protect us all from financial crime.
“We will not allow a small number of bad actors to tarnish the reputation of the whole tax agent sector.
“It is crucial taxpayers understand the entitlements they can claim directly from HMRC and are properly protected from the misleading tactics used by some repayment agents. The greater protections we’re bringing in will help to stop people unwittingly losing their hard-earned money to misleading agents.”
Around 11,000 TCL clients, whose claims had been paused during investigations into TCL, will now receive their tax refund directly from HMRC.
HMRC will contact all affected clients by the end of March to explain their refund. The refunds will be made automatically – customers do not need to contact HMRC to receive their payment.
In response to public concern, HMRC recently consulted on how to protect taxpayers using repayment agents and unveiled a package of measures last month, which included stopping the use of legally-binding ‘assignments’ as part of claiming an Income Tax repayment, improving agent standards and a requirement for repayment agents to register with HMRC.
HMRC urges anyone thinking of using a tax repayment agent to carefully consider their options when appointing a tax adviser to act on their behalf. Taxpayers are urged to do their research before committing to anything, and are reminded that they, not the tax agent, are ultimately responsible for their own tax affairs.
Taxpayers are advised to be particularly careful when clicking on online ads as some unscrupulous repayment agents have made their customer sign-up pages appear to be mere requests for more information.
Anyone who thinks they are owed a tax rebate can make claims direct with HMRC via GOV.UK; they can do this for free and will receive 100% of any refund.
If a taxpayer can show a tax repayment agent has made an invalid claim with HMRC on their behalf, they can contact HMRC.
More than 26,000 families in Scotland saved on childcare costs in December thanks to Tax-Free Childcare and HM Revenue and Customs (HMRC) is urging those yet to sign up not to miss out.
The latest figures revealed by HMRC show an increase of 6,390 families in Scotland using the scheme compared to December 2021.
Tax-Free Childcare is a financial support for working families with children up to the age of 11, or 16 if their child has a disability. The government top up can be used to pay for any approved childcare including holiday clubs, breakfast and after school clubs, child minders and nurseries.
A total of £41.5 million in government top-up payments were made to working families across the UK in December 2022 with each family saving up to £2,000 a year per child or £4,000 if their child is disabled.
Opening a Tax-Free Childcare account is quick and easy and can be done at any time of the year.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help families get the most out of their finances and Tax-Free Childcare can help pay towards their childcare costs. Search ‘Tax-Free Childcare’ on GOV.UK to get started.”
For every £8 paid into the Tax-Free Childcare account, families automatically receive an additional £2. Families can save up to £500 every three months (£2,000 a year) for each child or £1,000 (£4,000 a year) if their child is disabled.
More than one million families in the UK are entitled to some form of government childcare support and the government is encouraging those eligible not to miss out on their entitlements. Families can find out more about Tax-Free Childcare via the Childcare Choices website.
The government is offering help for households. Check GOV.UK to find out what cost of living support, including help with childcare costs.
Married couples are being urged to consider giving the gift of Marriage Allowance to their husband, wife or civil partner this Valentine’s Day, and save up to £252 a year.
More than 2.1 million couples currently benefit from Marriage Allowance, but HM Revenue and Customs (HMRC) estimates that thousands more couples are missing out because they don’t realise they may be eligible, particularly couples where one partner has retired, has given up work to take on caring responsibilities, or is unable to work due to a long-term health condition.
Customers earning less than £12,570 a year can transfer up to £1,260 of their Personal Allowance to their higher-earning partner, to reduce the amount of tax they pay. They can backdate their claim to include any tax year up to 6 April 2018, which could be worth up to £1,242 in tax relief.
Couples can use the free Marriage Allowance calculator on GOV.UK to check if they are eligible for the tax relief.
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We want every eligible couple to benefit from marriage allowance tax relief. Couples whose circumstances have changed – perhaps one of them has stopped working or taken a lower paid job – may not realise they are entitled to claim.
“It’s easy to find out what you may be due – search ‘Marriage Allowance calculator’ on GOV.UK to get started. By applying on GOV.UK, rather than through a third party, you get to keep 100% of the tax relief due.”
Those who are eligible can apply at GOV.UK for free and keep 100% of their claim. Successful claims will result in a reduction in the amount of tax paid by the higher-earning partner.
Couples could benefit from Marriage Allowance if the following criteria applies:
· they are married or in a civil partnership
· they do not pay income tax, or their income is below the Personal Allowance of £12,570
· their partner pays income tax at the starter, basic rate or intermediate rate – which typically means their income is between £12,571 and £43,662
Marriage Allowance can be cancelled on GOV.UK if a couple’s circumstances change.
To find out what other UK Government support may be available, go to GOV.UK and search ‘Help for Households.’
Tax-Free Childcare can help working families pay for any approved childcare for children aged 11 or under, or, 16 if the child has a disability – whether the child goes to nursery, a childminder, attends breakfast or after school club, has holiday care or goes to an out of school activity.
For every £8 paid into an online account, families will automatically receive an additional £2 from the government. Parents can receive up to £500 every 3 months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.
Opening a Tax-Free Childcare account is simple and takes around 20 minutes. Money can be deposited at any time and can be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time.
Victoria Atkins, Financial Secretary to the Treasury said: “Tax-Free Childcare can make a big difference to household budgets and I urge families to make sure they are getting the help they are entitled to.
“It is a simple process – go online today, set up an account and start making real savings on your childcare costs.”
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help working families and by using Tax-Free Childcare, they can use the government top-up to make their money go further.
“Search ‘Tax-Free Childcare’ on GOV.UK to find out how it could help you.”
Families could be eligible for Tax-Free Childcare if they:
have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until 1 September after their 16th birthday
earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
each earn no more than £100,000 per annum
do not receive tax credits, Universal Credit or childcare vouchers
Families can learn more about the childcare offers available to them and what support they’re entitled to by visiting Childcare Choices.
The government is offering help for households. Check GOV.UK to find out what cost of living support, including help with childcare costs, families could be eligible for.
A record 11.7 million customers submitted their tax returns on time, HM Revenue and Customs (HMRC) has revealed.
On 31 January, 861,085 customers filed online to meet the deadline, some with minutes to spare. There were 36,767 customers who filed in the last hour before the deadline, but the peak hour for filing on the day was 16:00 and 16:59, when 68,462 customers submitted their tax return.
More than 12 million customers were expected to file a Self Assessment tax return for the 2021 to 2022 tax year. HMRC is urging customers who missed the deadline to submit theirs as soon as possible or risk facing a penalty.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Thank you to the millions of customers and agents who got their tax returns in on time.
“Customers who have yet to file, and who are concerned that they will not be able to pay in full, may be able to spread the cost of what they owe with a payment plan.
“Search ‘pay my Self Assessment’ on GOV.UK to find out more.”
The Self Assessment payment deadline was also 31 January. If customers are yet to pay any outstanding tax, HMRC is urging them to do so as soon as possible. There are many ways for customers to pay, including online, using the HMRC app, by bank transfer, or at their bank. Payment options are listed at GOV.UK.
Customers can plan ahead for their 2022 to 2023 tax bill and set up a regular payment plan to help spread the cost. HMRC’s Budget Payment Plan enables customers who are up to date with previous payments to make regular weekly or monthly contributions towards their next tax bill.
A Budget Payment Plan is different from payments on account, which are usually due by midnight on 31 January and 31 July.
Customers need to be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is available on GOV.UK.
Self Assessment 2023 facts summary:
12,060,872 Self Assessment returns due
11,733,465 (97.3%) returns received by 31 January. This includes expected returns, unsolicited returns and late registrations
11,399,465 expected returns received by 31 January (94.5% of returns expected)
an estimated 600,000 customers missed the deadline
10,965,993 returns were filed online (96.2% of returns expected, following adjustments)
385,296 paper tax returns were filed (3.4% of returns expected, following adjustments)
Unsolicited returns/late registrations are an estimate based on returns received by early January and previous filing behaviour.
Data is accurate at the time of publication but may be subject to future adjustments.
Anyone who has missed the 31 January deadline may face a penalty. The penalties for filing a tax return late are:
an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
after 12 months, another 5% or £300 charge, whichever is greater
There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months.
