Customers miss out on telecoms savings

The Government has launched a campaign to raise awareness of cut-price social tariffs for broadband and mobile users after figures revealed less than a third of eligible customers had taken advantage.

The UK’s biggest broadband and mobile operators made commitments in the summer to support customers struggling with the cost of living, introducing tariffs starting at £10.

Digital minister Julia Lopez met leaders from the telecoms sector – including BT, Virgin Media, O2, Sky, Vodafone, TalkTalk, Three Mobile, Hyperoptic and Ofcom – at the Department for Digital, Culture, Media and Sport (DCMS) for an update on work to boost awareness of social tariffs.

Lopez urged the sector to commit to raising awareness of these affordable deals available for people in receipt of Universal Credit, which could save them up to £180 per year when compared to the average tariff.

An Ofcom report in September found that only 31 per cent of eligible groups were aware that social tariffs were available, despite them being available in 99 per cent of the UK to reach those who need the support most.

Lopez said: “Helping families manage the cost of living is a priority for this winter and beyond. It is vital to find out what more we and the telecoms industry can do to support families worried about their bills.

“Everyone should have access to affordable mobile and broadband services. We agreed that more has to be done to raise awareness of social tariffs and stressed the impact price increases have on people and families up and down the country.”

The meeting with telecoms leaders took place on the day the Government launched a UK-wide public awareness campaign as part of its Help for Households programme. The campaign aims to help people through the cost of living this winter and will help increase awareness and uptake of the cut-price broadband and mobile deals available to help those struggling with bills.

As well as agreeing to make vital steps to make sure eligible customers know about social tariffs starting from as little as £10, the industry agreed to share insight into the barriers beyond consumer awareness that are preventing households from taking up social tariffs.

In a move welcomed by the Government, Hyperoptic marked the occasion by announcing that they will be dropping the price of their fastest speed social tariff from £25 to just £20.

Minister for Social Mobility, Youth and Progression Mims Davies said: “We have already made it easier for vulnerable families receiving certain benefits to access cheaper broadband rates through our automatic verification system. I do welcome today’s discussion which further shows our commitment to working innovatively with industry to keep low-income families connected and able to progress as a result of this support.

“Social tariffs are just one of the ways we are assisting households at this challenging time, with millions already receiving £1,200 in direct payments and more on the way next year. I encourage anyone who thinks they might be entitled to further support to check their eligibility via our online benefits calculator.”

Do you know what support you are entitled to? Get in touch if you need any advice.

Green opportunities boosted by Government investment

Millions of pounds of Government cash are being invested in training opportunities for green energy workers.

Thousands of courses will be rolled out across England to grow a skilled workforce of heat pump and energy efficiency installers, as the Government announces winners of the Home Decarbonisation Skills Training competition.

Shining a light on the huge scope for economic growth and job creation in the green energy sector, the £9.2 million funding will offer free and heavily subsidised training opportunities for installers of clean heating and energy efficiency measures.

Business and Energy Minister Lord Callanan said: “The green energy sector is driving growth and creating jobs right across the country, and this funding will make sure we have enough tradespeople trained up and able to take advantage of these opportunities.”

The funding will see training providers deliver 8,900 courses at accredited centres across England for prospective heat pump and energy efficiency installers.

This will add to the rapidly growing number already saving households hundreds of pounds on their energy bills each year by delivering energy efficiency solutions, while helping the UK meet its ambitious carbon emissions commitments.

Lord Callanan said: “We are making homes greener and cheaper to keep warm and training thousands more skilled installers will ensure we keep accelerating the pace of creating cleaner and more energy efficient buildings.”

The Government is accelerating the pace of upgrading the energy efficiency of housing with £6 billion funding committed to 2028, in addition to £6.6 billion in this parliament. A further £4 billion has been committed through the ECO4 scheme, which is delivering home insulation measures to low income and more vulnerable households, and the £1 billion ECO scheme, which will install measures in households who have previously not been able to access support through the Energy Company Obligation scheme.

The funding will provide training for people already working in the heating and plumbing sector who are looking to retrain or grow their existing skills, as well as for those looking to enter and work in the energy efficiency, building retrofit and low carbon heating sectors, building the overall number and skill levels of trained installers across England.

Training through the latest round of the Home Decarbonisation Skills Training competition will be delivered until 31 March 2023 and follows the success of the previous round of funding in 2021 when the Government invested £6 million, resulting in almost 7,000 training opportunities.

Organisations that have been successful in the latest funding round will provide appropriate installer training that leads to a recognised NVQ qualification or equivalent and Continuing Professional Development-style short courses.

Training opportunities will be provided across England with courses being run at centres in towns and cities from Truro to Newcastle and the Isle of Wight to Cumbria.

Fiscal drag

What is fiscal drag?

The Oxford dictionary defines it as:

‘The deflationary effects of a progressive taxation system on a country’s economy. As wages rise, a higher proportion of income is paid in tax’

The recent comments made by the Chancellor in the Autumn Statement, froze most Income Tax allowance and rates at current levels until 2028.

This means that wage earners who receive pay increases until April 2028, to try and keep spending power intact, will pay income tax on any increase. In certain circumstances, they may also see their taxable income boosted into the 40%, or 45%, Income Tax bands.

If wage increases continue to lag behind inflation, then wage earners will suffer a double hit to their spending power in coming years.

Capital Gains planning

Readers may have noted that the Chancellor announced a significant reduction in the annual Capital Gains Tax allowance, currently £12,300, from April 2023.

 

It is reducing to £6,000 from April 2023 with a further reduction to £3,000 from April 2024.

 

Taxpayers who are contemplating the disposal of a chargeable asset next year, which will create significant chargeable gains, should consider organising these disposals before, rather than after, 5 April 2023; unless they have already crystalised gains during 2022-23 and fully used their £12,300 tax-free allowance.

And don’t forget, married couples and civil partners both qualify for the £12,300 allowance in which case organising joint ownership of these assets before disposal may be beneficial.

Uprating benefits and cost of living payments

Changes to these support payments were announced in the Autumn Statement last month. They include:

 

  1. State Pension – will increase in line with inflation.
  2. Cost of living payments – the government will provide households on means-tested benefits with an additional £900 Cost of Living payment in 2023-24. Pensioner households will receive an additional £300 Cost of Living payment, and individuals on disability benefits will receive an additional £150 Disability Cost of Living payment in 2023-24. These payments will be made on a UK-wide basis.
  3. Uprating of benefits – the government is protecting the most vulnerable in society by increasing benefits in line with inflation, measured by September CPI which is 10.1% this year. Around 19 million families will see their benefit payments increase from April 2023. This includes increasing the State Pension by inflation, in line with the commitment to the Triple Lock. The standard minimum income guarantee in Pension Credit will also increase in line with inflation from April 2023 (rather than in line with average earnings growth). This will ensure pensioners on the lowest incomes are protected from inflation and do not lose some of their State Pension increase in the Pension Credit means test. Some disability benefits are devolved in Scotland, so it is for the Scottish Government (SG) to decide uprating. Department for Work and Pensions (DWP) benefits are fully devolved in Northern Ireland, so it is for the Northern Ireland Executive to decide uprating in Northern Ireland.

National Living Wage changes from 1 April 2023

Employers will need to update their systems to reflect the changes in the National Living and Minimum Wage rates from 1 April 2023.

They are:

  • Increasing the National Living Wage for those aged 23 and over by 9.7% to £10.42 an hour;
  • Increasing the rate for 21–22-year-olds by 10.9% to £10.18 an hour;
  • Increasing the rate for 18–20-year-olds by 9.7% to £7.49 an hour;
  • Increasing the rate for 16–17-year-olds by 9.7% to £5.28 an hour;
  • Increasing the apprentice rate by 9.7% to £5.28 an hour; and
  • Increasing the accommodation offset rate by 4.6% to £9.10 an hour.

As this will increase the payroll costs of affected business owners these changes will need to be factored into business plans for 2023-24.

Tax Diary December 2022/January 2023

1 December 2022 – Due date for Corporation Tax payable for the year ended 28 February 2022.

19 December 2022 – PAYE and NIC deductions due for month ended 5 December 2022. (If you pay your tax electronically the due date is 22 December 2022).

19 December 2022 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2022.

19 December 2022 – CIS tax deducted for the month ended 5 December 2022 is payable by today.

30 December 2022 – Deadline for filing 2021-22 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2023-24.

1 January 2023 – Due date for Corporation Tax due for the year ended 31 March 2022.

19 January 2023 – PAYE and NIC deductions due for month ended 5 January 2023. (If you pay your tax electronically the due date is 22 January 2023).

19 January 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2023.

19 January 2023 – CIS tax deducted for the month ended 5 January 2023 is payable by today.

31 January 2023 – Last day to file 2021-22 self-assessment tax returns online.

31 January 2023 – Balance of self-assessment tax owing for 2021-22 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2022-23.

HMRC app is a gift for Christmas workers and employers

This year, 10 of the UK’s largest seasonal employers are expected to hire 234,700 Christmas workers – up 74 per cent on 2021.

This growth is largely being driven by the likes of Amazon but businesses of all shapes and sizes throughout the land are currently advertising for extra help to cover the busy festive season.

Vacancies range from people simply providing additional support to fabulously festive roles such as seasonal chocolate packers, Christmas chefs, reindeer handlers, Christmas tree decorators, gift wrappers, turkey pluckers and helpers for Santa.

Whatever the role might be there is one thing the people filling these positions and their employers have in common – they all need to make sure they are paying the correct amount of tax.

In the past this has often caused a bit of a headache for businesses and their temporary employees but these days help is at hand with the free HM Revenue and Customs (HMRC) app.

How does the HMRC app help?

New employees can use the app to securely access information about their personal tax affairs so they can pass the details on to their employer, without the need to call the HMRC.

New functions and capability mean customers can now access their:

  • Income and employment history
  • Salary information
  • National Insurance number or tax code via the app, whenever they need it.

The information can be downloaded and printed – so there is no need to call HMRC to ask for it to be sent in the post. Using the app rather than calling the helpline makes the process much quicker.

What HMRC says about the app

Myrtle Lloyd, HMRC’s Director General of Customer Services, said: “Whether you’re starting a new role in customer services, delivering parcels or managing warehouse logistics – the HMRC app is a secure and easy way to access your tax code, National Insurance number and employment details so you can let your new employer know.

“It’s accessible at the touch of a button and is quicker than calling HMRC.”

Victoria Atkins MP, Financial Secretary to the Treasury, said: “Christmas is busy enough – especially if you have taken on a seasonal job – so anything which can save you time is to be welcomed.

“The free and secure HMRC app is just such a thing, it makes searching for employment information quick and easy, whether you need to check your National Insurance number, find out how much you will be paid and much more.”

What do you need to use the HMRC app?

App users will need a user ID and password, so they can access their personal information. If customers need to set one up, the app will guide them through the process.

More than 3.5 million people have used the HMRC app since it launched in September 2016, and more than 1.6 million customers used it at least once in the last year.

HMRC has released a video which explains how customers can use the HMRC app to check their employment history, income, tax codes and National Insurance number.

To find out more, read the HMRC’s guide to using the app

The increasing pull of fiscal drag

This month’s Autumn Statement has led to an onslaught of headlines featuring the phrase ‘fiscal drag’.

Sometimes referred to as a ‘stealth tax’ the term doesn’t normally move beyond the Westminster bubble or the financial pages so why is it currently causing so much of a stir?

To understand why commentators are getting so animated about it, we first need to look at what the term means.

What is fiscal drag?

Fiscal drag is a term economists use to explain what happens when tax thresholds do not increase in line with the rising cost of living.

Typically, each year employees can expect to see their wages increase to some extent to help them keep up with the cost of living. This is not a pay rise, rather it is an attempt to ensure employees’ wages are keeping up with inflation.

However, if tax thresholds are not also increased you end up with a situation where more of the lowest earners begin to pay tax for the first time and other workers move into higher tax bands.

For example, currently the nil rate income tax personal allowance stands at £12,570. If this were to grow in line with wages, it should increase to £13,400 next April. If it were to grow in line with inflation it would increase to £13,965.

Without an increase to the tax threshold, someone currently earning £12,570 will be liable to pay tax for the first time if they receive a pay rise in line with inflation in 2023.

This means that although the individual has received a wage increase in line with inflation, after tax they will see a below-inflation rise.

Put simply, fiscal drag is when people pay tax for the first time – when they pay more tax – or when people are dragged into higher tax brackets – not because they are wealthier but because they are attempting to counter effects of inflation.

What happened in the Autumn Statement?

In the Autumn Statement, the Chancellor of the Exchequer, Jeremy Hunt, revealed that the nil income tax personal allowance, which stands at £12,570, would be frozen until 2028.

The Basic Rate income tax band, which goes from £12,571 to £50,270 and at which individuals are charged 20 per cent, will also be frozen until 2028.

In addition, the Chancellor announced that the threshold for when the highest earners start paying the top rate of tax – 45 per cent – will fall from £150,000 to £125,140 from April 2023.

These announcements apply to England, Wales and Northern Ireland. Scotland sets its own bands and rates.

What will the impact be?

The Government’s economic plans are independently assessed by The Office of Budget Responsibility.

It estimates that freezing thresholds until 2028 will create an additional 3.2 million new taxpayers and will mean 2.6 million more people pay higher rate tax.

Millions receive first energy bill payment

More than 27 million households across Great Britain have been given their first £66 payment towards their energy bills.

The Government’s Energy Bills Support Scheme (EBSS) has already handed out £1.8 billion in payments to 9 per cent of eligible households in England, Scotland and Wales in its first month.

This is the first payment made through the EBSS since it launched in October and will see households receive a £400 discount on energy bills paid in 6 monthly instalments. The second instalment of the EBSS will reduce households’ November energy bills, which brings the total amount spent on the scheme so far to £3.8 billion.

Vouchers have been sent to all two million customers with traditional pre-payment meters. The Government has urged consumers to redeem the vouchers as soon as possible, after figures showed only around two thirds had already done so. Suppliers will tell customers where to redeem them, for example at a Post Office branch or a PayPoint shop. Payzone outlets are unable to accept the vouchers.

Secretary of State for Business, Energy and Industrial Strategy, Grant Shapps, said: “The government is committed to supporting people facing unique stresses with the cost of living and rising energy costs. These figures show how we are making a difference in over 27 million homes across Great Britain.

“All vouchers have now been sent to customers who should have them, so I urge everyone who uses a traditional prepayment meter to make sure they receive their voucher from their supplier and redeem them promptly so they get the energy bill support they are entitled to.”

Exchequer Secretary to the Treasury, James Cartlidge, said: “We are facing a global energy crisis driven by Putin’s illegal invasion of Ukraine, and we know this is a huge challenge for people here in the UK.

“That’s why we have taken direct action, ensuring millions of households are protected this winter.”

From December onwards, the amount discounted from energy bills will increase to £67 as the scheme continues to provide support to households over the winter months.

Administered by energy suppliers, the scheme is designed so customers receive the rebate in the same way that they pay their energy bills, such as via direct debit, credit, smart meters and traditional prepayment meters. For the small minority who have not yet received the discount for October, this was down to factors such as issues around a customer’s bank details where they pay via direct debit, and customers on pre-payment meters who are yet to redeem the vouchers.

 

 

Gillian Cooper, Head of Energy Policy for Citizens Advice, said: “As winter starts to set in, this financial support should help millions of people to keep their heating and lights on. It’s vital it reaches everyone who needs it.”

Earlier this year, the Government introduced new powers that mean intermediaries, such as landlords, must pass on savings made under the EBSS and other energy support schemes to end users, who don’t pay their energy bills directly, for example tenants.

If you are facing any challenges with your finances over this period, get in touch for advice.