Summary of some of the key information for employees and individuals and how to access the Government support. Whilst this mainly refers to employees, some is applicable to employers alike.
- Existing mortgages
- Homeowners with an existing mortgage can take advantage of a mortgage repayment holiday of up to 3 months. During this period interest will continue to accrue, but you will not have to make any payments towards your mortgage.
- Further information can be found here.
- New mortgages
- The mortgage market has gone into partial lockdown, as a number of lenders have stopped selling mortgages above 60% loan-to-value (LTV).
- This means that those without a deposit or equity worth at least 40% of the property value will not be able to secure a mortgage to buy a property, or even re-mortgage their existing property.
- Company car and fuel benefit
- It could be possible to reduce the tax paid by employees for both car and fuel benefit. Please see our detailed article for further information here.
- Private leased vehicles
- Some leasing companies are also willing to offer payment breaks for between 3 and 6 months.
- Where a car is due to be replaced, some leasing companies will also offer short term contracts for vehicles on hire for 3-6 months. This may take away the need to pay a large up front payment for a new vehicle.
Universal Credit & Working Tax Credit
- Universal Credit is available for those between 18 and state pension age, who are on a low income or out of work.
- The government has announced an increase to the rates of Universal Credit, by £1,000 per annum. This will be automatically applied, and there is no application needed.
- If you want to check whether you are eligible for Universal Credit, please use the following link. https://www.gov.uk/universal-credit/eligibility
- Working tax credits will also increase by £1,045 per annum from 6th April 2020 until 5th April 2021
Self Assessment Tax
- The government has announced that all Self-Assessment tax payments due by 31st July 2020 will be deferred until 31st January 2021. You do not need to apply for this relief, but should simply defer the tax payment until January 2021
- For anyone completing a tax return for the 2019/2020 tax year, it would be beneficial to complete and file this as soon as possible after the tax year end (5th April 2020). This will mean that if there is a refund due, the refunded tax will be received as soon as possible.
House rental costs
- The government has announced a further £1bn of support for house rental costs, through Housing Benefit and Universal Credit. This should be applied for when applying for Universal Credit.
- For families where either spouse/partner earns in excess of £50,000, you may have stopped receiving Child Benefit, as you would be incurring High Income Child Benefit Tax Charge.
- If you have been furloughed or have had to accept a pay decrease over the coming months, it would be worthwhile reviewing your gross pay for the 2020/21 tax year. You may be able to claim Child Benefit payments again.
- Using the following calculator, you can check whether it would be worthwhile receiving Child Benefit. https://www.gov.uk/child-benefit-tax-calculator
- The central government has created a £500 million COVID-19 Hardship Fund for local authorities, and the expectation is that the majority of this fund will be used to provide council tax relief.
- Local authorities are expected to confirm how the grant support package will be delivered, typically on their website.
The Financial Conduct Authority (FCA) has also started an emergency 4 day consultation on plans to help consumers manage their credit, including a temporary freeze on loans, credit cards, store cards and catalogue credit for up to 3 months. Further information on this should be available once this consultation has been completed.