Doubling up leaseholders to receive refund

Thousands of homeowners who have been paying doubled ground rent on their leasehold properties are to receive a refund.

Many of the 5,000 households throughout the UK affected by ‘doubling clauses’ will receive a windfall and will see more money in their pockets each month as ground rents return to their original amount.

The announcement follows action from the Competition and Markets Authority (CMA), which has secured undertakings from nine companies that bought freeholds from leading housing developer Taylor Wimpey.

A further four national developers – Crest Nicholson, Redrow, Miller Homes and Vistry – have also agreed to work with the companies who purchased their freeholds to remove doubling terms.

Homeowners trapped

All nine firms must now remove problematic contract terms that cause ground rents to double in price every 10 years. These terms can lead to people being trapped in homes they cannot sell or mortgage. The firms will also remove contract terms which were originally doubling clauses, but were converted so the ground rent increased in line with the Retail Price Index (RPI).

The CMA believes that the original doubling clauses were unfair and should therefore have been fully removed – not replaced with another term that still increases the rent.

This action brings the total number of homeowners that have benefitted from the CMA’s investigation to over 20,000.

All affected leaseholders will now see their ground rents remain at the original amount and this will not increase over time. The nine freeholders have also agreed to refund residential leaseholders who had already paid out under doubled ground rent terms.

Sarah Cardell, interim Chief Executive of the CMA, said: “For years leaseholders have been plagued by what we believe are unfair practices. That’s why we sought to tackle the problem by launching action against some of the biggest names in the business.

‘New lease of life’

“As a result of our work, over 20,000 people now have a new lease of life, freed from issues like costly doubling ground rent terms.”

Secretary of State for Levelling Up, Greg Clark, said: “This is good news that will see thousands of leaseholders get the refunds they are entitled to.

“Levelling up home ownership and creating a fairer, more transparent leasehold system is a top priority for this Government, and these agreements are an example of this in action.

“We will work with the CMA to continue challenging industry on its practices, so we can ensure more leaseholders get the fair deal they deserve.”

Landmark changes

Since 2019, the CMA has sought to tackle issues around the possible mis-selling of leasehold homes and contract terms it believes are unfair. Its investigations involving seven leading housing developers – and businesses who purchased freeholds from these firms – have led to landmark changes.

As the investigation moves into the final stages, the CMA is engaging with additional firms, including the Abacus Land and Adriatic Land investment group, which bought freeholds from Taylor Wimpey.

Do you need advice on financial matters? Give us a call today for our help.

Starling flies to the top of banking polls

Starling Bank has proved unstoppable in the latest large scale banking surveys, coming top for business and personal accounts.

Personal and small business current account holders were asked how likely they would be to recommend their provider to a friend, relative or other business. The surveys also covered the quality of online and mobile provision, branch and overdraft services and, for small businesses, the quality of the relationship management they receive.

The results show customers how their bank is ranked on overall quality of service and make it easier for people to compare offers. They also promote competition between providers, resulting in better experiences for all account holders.

Winners and losers

Overall, the top-ranked personal current account providers in Great Britain are:

  • Starling Bank (=1st)
  • Monzo (=1st)
  • first direct (3rd)

The bottom-ranked are:

  • Royal Bank of Scotland (16th)
  • Virgin Money (15th)
  • TSB (14th)

Overall, the top-ranked business current account providers in Great Britain are:

  • Starling Bank (1st)
  • Monzo (2nd)
  • Handelsbanken (3rd)

And the bottom-ranked are:

  • The Co-operative Bank (15th)
  • Virgin Money (=13th)
  • HSBC UK (=13th)

The top-ranked personal current account providers in Northern Ireland overall are Starling Bank, Monzo and Nationwide while the bottom-ranked are AIB, Bank of Ireland UK and Ulster Bank.

The top-ranked business current account providers in Northern Ireland are Santander and Danske Bank while the bottom-ranked are Bank of Ireland UK and AIB.

‘Vote with your feet’

Adam Land, Senior Director at the Competition and Markets Authority (CMA), said: “As the rising cost of living bites, it’s important that people and businesses have the information they need to manage their money and make savings.

“These results show how banks are treating their customers at a time when many are feeling the pinch.

“When times are tough you find out who’s fighting your corner and if your bank doesn’t match up to the competition – you can vote with your feet and make a switch.”

The survey was established as part of the Retail Banking Order, a set of reforms established by the CMA following its retail banking market investigation in 2016.

Broadband bill cuts help families stay connected

Struggling families have been given the welcome news that their broadband bills could be cut as the cost-of-living crisis continues to bite.

Millions of low-income households could be eligible for cheaper deals with internet service providers being encouraged by the Government to offer ‘social tariffs’.

A new service, which goes live this week and is being run by the Department for Work and Pensions (DWP), will allow internet service providers to verify – with customers’ permission – whether they are in receipt of a relevant benefit and therefore eligible for extra financial support.

The Government has called on all broadband providers to offer and promote discounted broadband and mobile deals for people on Universal Credit and other benefits. Current statistics show that only 1.2% of those eligible have taken advantage of such a package.

The scheme is already being supported by Virgin Media O2 who, following discussions with Government, has announced that they will use the system to verify eligible customers signing up to their Essential Broadband tariff. The company will also waive early termination fees for those moving from existing tariffs.

Savings of £100-plus

Customers on social tariffs could in some cases save more than a hundred pounds a year. The new system will also simplify the process by removing the need for customers to prove their entitlement to broadband providers as regularly as every month.

The Government’s Cost of Living Business Tsar, David Buttress, has welcomed the new scheme and committed to continue working with industry to scale up and promote existing social tariffs, as well as encourage all providers to offer a discounted tariff.

He said: “Times are tough and families across the country are feeling the pinch, so we’re making it easier for companies to reduce phone and broadband bills for struggling families.

“Some of the biggest network operators have already committed to take advantage of this new scheme and we want to see other providers follow their lead so that everyone eligible for a social tariff can access one.”

Digital Secretary Nadine Dorries said: “Social tariffs are vital for families struggling with bills, keeping them connected even in tough times.

“Our discussion with broadband companies led to the range of social tariffs on the market today and we’ve secured a raft of new cost-of-living commitments from them to ensure help is available for anyone that needs it.”

 

Permission needed

Internet service providers will be required to gain customers’ consent before speaking to DWP about their eligibility. DWP will minimise the information provided, sharing nothing other than confirmation that the person is entitled to a qualifying benefit at the time of contact. This ensures that claimants’ data remains as safe as possible.

Social tariffs are available to eligible customers in 99% of the country following Government-led negotiations with broadband companies.

Alongside the launch of this scheme, Mr Buttress has also announced new cost-of-living deals and discounts as part of the Help for Households campaign.

The new deals include:

  • Publishing firm Scholastic is offering 20% off children’s books. Scholastic will also donate an additional 20% of all order values over £10 in Rewards to local schools.
  • A curated set of Back-to-School deals from Amazon, with discounts on backpacks and school uniforms, as well as stationery essentials from BIC, Staedtler and Papermate.
  • A number of other Help for Households partners, including Marks & Spencer, Primark, Shoezone, ZSL and Go-ahead have agreed to promote their existing support schemes to raise awareness.

Paying your tax late? Be prepared for higher interest

Late taxpayers will be facing higher interest rates from this week following the rise in the Bank of England base rate.

HMRC’s interest rates for late payment are linked to the base rate that was increased to 1.75% from 1.25% earlier this month.

The changes will come into effect on:

  • 15 August 2022 for quarterly instalment payments
  • 23 August 2022 for non-quarterly instalments payments

The repayment interest rate will also increase.

How HMRC interest rates are set

HMRC interest rates are set in legislation and are linked to the Bank of England base rate.

Late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5%.

The minimum floor ensured that taxpayers continued to receive 0.5% repayment interest even when base rate fell to 0.1%.

The differential between late payment interest and repayment interest is in line with the policy of other tax authorities worldwide and compares favourably with commercial practice for interest charged on loans or overdrafts and interest paid on deposits.

The rate of late payment interest encourages prompt payment and ensures fairness for those who pay their tax on time, while the rate of repayment interest fairly compensates taxpayers for loss of use of their money when they overpay or pay early.

Do you need advice on your tax matters? Get in touch today.

Beautician gave �10k of Bounce Back Loan to sister

Abuse of the Bounce Back Loan scheme is continuing to land people in court as the Insolvency Service tightens its net around those who have misused the cash designed to help businesses during the pandemic lockdowns.

Five individuals have separately been made subject to bankruptcy restrictions totalling 48 years for exploitation of the initiative, which was introduced to support businesses during Covid-related trading restrictions.

In each of the five separate cases, the Bounce Back Loans were either wrongfully obtained through overstating their businesses turnover, or on behalf of a company that had already ceased trading prior to the pandemic, or were simply misused for personal use rather than legitimate business spending.

Charlene Wilson was a self-employed beauty therapist based in Jarrow. She received a £50,000 Bounce Back Loan by overstating her turnover and spent around £15,000 on personal expenses. She has accepted bankruptcy restrictions for eight years.

Georgiana Cercel ran a beauty business from her home in Lincoln while studying full-time. She received a £50,000 Bounce Back Loan by overstating her business turnover, and gave £10,000 to her sister. She is subject to bankruptcy restrictions for 10 years.

Florin Bodale worked as a building contractor through his company Varga Construction. He obtained a £50,000 Bounce Back Loan by overstating his turnover, although he told investigators he believed he had been asked for total turnover for the previous three years. However, this amount would still have been less than half the turnover he stated. He has accepted a 10-year bankruptcy restrictions undertaking.

Sarah Sweeting ran a farm shop home delivery service from October 2020. She obtained a £22,000 Bounce Back Loan despite not being eligible as businesses had to have been trading prior to March 2020. Of the £22,000, she transferred around £14,000 to her husband. She is subject to a 10-year bankruptcy restrictions undertaking.

Abbas Moradmand ran a tyre business from 2018 to 2019 after which point he worked as a taxi driver. After a short closure the business reopened and continues to trade under new ownership. However, Moradmand secured a Bounce Back Loan of £26,894 to which he was not entitled as it was based on an application on behalf of his former tyre business. He has accepted a 10-year bankruptcy restrictions undertaking.

Their bankruptcy restrictions mean none of the above individuals are able to borrow more than £500 without disclosing their bankrupt status. They also cannot act as a company director without permission from the court.

In each of the above cases the local Official Receiver is working on potential recovery action.

 

Kevin Read, Official Receiver at the Insolvency Service, said: “In all of these cases it was obvious, or it should have been obvious, that they either misused the Bounce Back Loan for personal benefit, took a larger loan than they were eligible for, or weren’t eligible for a Bounce Back Loan at all.

“This is taxpayers’ money they have abused and we will not hesitate to impose bankruptcy restrictions in these circumstances.”

Beautician gave Bounce Back Loan to sister

Abuse of the Bounce Back Loan scheme is continuing to land people in court as the Insolvency Service tightens its net around those who have misused the cash designed to help businesses during the pandemic lockdowns.

Five individuals have separately been made subject to bankruptcy restrictions totalling 48 years for exploitation of the initiative, which was introduced to support businesses during Covid-related trading restrictions.

In each of the five separate cases, the Bounce Back Loans were either wrongfully obtained through overstating their businesses turnover, or on behalf of a company that had already ceased trading prior to the pandemic, or were simply misused for personal use rather than legitimate business spending.

Charlene Wilson was a self-employed beauty therapist based in Jarrow. She received a £50,000 Bounce Back Loan by overstating her turnover and spent around £15,000 on personal expenses. She has accepted bankruptcy restrictions for eight years.

Georgiana Cercel ran a beauty business from her home in Lincoln while studying full-time. She received a £50,000 Bounce Back Loan by overstating her business turnover, and gave £10,000 to her sister. She is subject to bankruptcy restrictions for 10 years.

Florin Bodale worked as a building contractor through his company Varga Construction. He obtained a £50,000 Bounce Back Loan by overstating his turnover, although he told investigators he believed he had been asked for total turnover for the previous three years. However, this amount would still have been less than half the turnover he stated. He has accepted a 10-year bankruptcy restrictions undertaking.

Sarah Sweeting ran a farm shop home delivery service from October 2020. She obtained a £22,000 Bounce Back Loan despite not being eligible as businesses had to have been trading prior to March 2020. Of the £22,000, she transferred around £14,000 to her husband. She is subject to a 10-year bankruptcy restrictions undertaking.

Abbas Moradmand ran a tyre business from 2018 to 2019 after which point he worked as a taxi driver. After a short closure the business reopened and continues to trade under new ownership. However, Moradmand secured a Bounce Back Loan of £26,894 to which he was not entitled as it was based on an application on behalf of his former tyre business. He has accepted a 10-year bankruptcy restrictions undertaking.

Their bankruptcy restrictions mean none of the above individuals are able to borrow more than £500 without disclosing their bankrupt status. They also cannot act as a company director without permission from the court.

In each of the above cases the local Official Receiver is working on potential recovery action.

 

Kevin Read, Official Receiver at the Insolvency Service, said: “In all of these cases it was obvious, or it should have been obvious, that they either misused the Bounce Back Loan for personal benefit, took a larger loan than they were eligible for, or weren’t eligible for a Bounce Back Loan at all.

“This is taxpayers’ money they have abused and we will not hesitate to impose bankruptcy restrictions in these circumstances.”

Eligible couples urged to apply for tax reduction

Thousands of couples could be missing the opportunity to reduce their tax by £250 a year.

Married couples and people in civil partnerships can sign up for Marriage Allowance, which allows them to share their personal tax allowances if one partner earns below the Personal Allowance threshold of £12,570, and the other is a basic rate taxpayer.

Eligible couples, including those who have been together for many years, can transfer 10 per cent of their tax-free allowance to their partner, which is £1,260 in the 2022 to 2023 tax year. It means couples can reduce the tax they pay by up to £252 a year. They can apply any time and, if eligible, could backdate their claims for up to four previous tax years to receive a payment of up to £1,242.

Marriage Allowance is free to apply for, and customers should claim directly via HMRC’s online portal to ensure they receive 100 per cent of the tax relief they are eligible for.

Marriage Allowance is one of a number of benefits and reliefs available to boost family finances at a time when many are concerned with the rising cost of living.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “We want to ensure people are receiving vital financial support at a time when they need it most. Married couples or those in a civil partnership could potentially receive tax relief worth up to £1,242, meaning extra cash in their pockets.”

More than two million couples currently benefit from Marriage Allowance, but there could be thousands more who are eligible to claim.

Even if couples don’t qualify for Marriage Allowance when they first get married, a change in circumstances years later could mean they become newly eligible. These include:

  • one partner retiring and the other remaining in work
  • a change in employment
  • a reduction in working hours which means their earnings fall below their Personal Allowance
  • maternity, paternity, or shared parental leave
  • unpaid leave or a career break
  • one partner studying or in education and not earning above their Personal Allowance

If a spouse or civil partner has died since 5 April 2018, the surviving person can still claim by contacting the Income Tax helpline.

Marriage Allowance claims are automatically renewed every year. However, couples should notify HMRC if their circumstances change.

If you have any questions on this, or any other tax issue, get in touch.

 

Thousands of businesses at risk of import delays

Businesses are being warned they could risk significant delays to importing goods if they don’t move to the UK’s new streamlined customs system.

Organisations submitting import declarations must use the Customs Declaration Service from 1 October 2022, when the Customs Handling Import and Export Freight (CHIEF) system will close for import declarations.

Businesses should check that their customs agents are ready to use the new service. Those without a customs agent must set themselves up to make their own declarations using software that works with the system.

Many businesses are already using the Customs Declaration Service, however around 3,500 businesses are yet to move.

It can take several weeks to be fully set up on the new system so those waiting to register risk being unable to import goods to the UK from 1 October.

Julie Etheridge, HMRC’s Director of Programme and Operational Delivery for Borders and Trade, said: “There are now only two months left until businesses must use Customs Declaration Service for imports. Businesses need to move now or risk being unable to bring their goods into the UK.

“Registering takes time so businesses should start moving to the Customs Declaration Service to ensure a smooth transition and avoid disruption to their business.”

To help all businesses and agents prepare for the Customs Declaration Service, declarants are being contacted by phone and email to inform them of steps they need to take. Further information is available on GOV.UK, including a Customs Declaration Service toolkit and checklists, which break down the steps traders need to take.

Traders can also register or check they have access to the Customs Declaration Service on GOV.UK and access live customer support services for additional help.

Once registered, businesses that use a Duty Deferment Account will need to set up a new Direct Debit Instruction for the Customs Declaration Service by 30 September. If this is not set up, the Duty Deferment Account will no longer be usable, and individual immediate payments will need to be made each time an import declaration is made.

CHIEF will close for export declarations on 31 March 2023, with businesses being required to use the Customs Declaration Service to send goods out of the UK.

Businesses unite to create summer offers for struggling families

Families struggling to make ends meet in the cost-of-living crisis will be able to take advantage of special deals over the summer holidays.

Some of the UK’s biggest businesses have signed up to offer discounts and deals through the Government’s Help for Households Campaign.

Asda, Morrisons, Amazon and Vodafone are among those supporting the initiative with deals designed to reduce costs at the checkout, help provide entertainment and ensure access to necessary services for families during the summer holidays and beyond.

Agreed with the Government’s Cost of Living Business Tsar David Buttress, the deals include the extension of Asda’s ‘Kids eat for £1’ scheme, where children aged 16 and under can access a hot or cold meal for £1 at any time of day in Asda Cafés across the UK.

Sainsbury’s is introducing it’s ‘feed your family for a fiver’ campaign, helping customers with budget-friendly meal ideas to feed a family of four for less than £5.

Theatres in London are uniting for Kids Week, an initiative giving children the chance to see a West End show for free throughout August with a full paying adult, with half price tickets for two additional children in the same group, while Vodafone is promoting a mobile social tariff of £10 a month.

Along with new initiatives, some deals are a continuation of successful support schemes which businesses are already running and want to promote under the Help for Households campaign to raise awareness.

These include Amazon’s new ‘help for households’ page that will provide access to free entertainment such as Freevee and Amazon Music, as well as educational resources for school-aged children and low-price essential groceries. Morrisons is also providing a free meal for every child at in-store cafes when a parent buys an adult meal.

The Prime Minister, Boris Johnson, said: “We’re facing incredibly tough global economic headwinds and families across the country are feeling the pinch. That’s why this government is providing an unprecedent £37bn worth of support to help households through the storm.

“Both the public and private sector have a role to play here – and that’s why it’s great to see so many leading UK businesses are now coming forward to offer new deals and discounts that will provide much needed respite at the checkout.

 

“This won’t solve the issue overnight but it’s yet another weapon in our arsenal as we fight back against scourge of rising prices and inflation.”

Software savings boost for small businesses

More than a million small businesses are now eligible for discounted software through a flagship government scheme after a change to the rules.

The Help to Grow: Digital Scheme, which cuts the price of leading software to boost productivity and growth in the UK’s smaller firms, is now available to businesses with just one employee.

With Customer Relationship Management software proven to boost firms’ productivity by 18% on average, the initiative offers businesses discounts worth up to £5,000 on approved software.

Previously, only businesses with more than five employees were eligible for the scheme. From July 25, the number of eligible businesses rose by 760,000 making the scheme available to 1.24 million small companies.

eCommerce software is also now available through the scheme to help businesses ramp up sales of products and services online. This includes helping them to manage their inventory, take payments and gather data and insights on customers’ needs. Businesses which adopt eCommerce software see on average a 7.5% increase in employee sales over three years.

This means businesses can now access a £5,000 discount on 30 software solutions from 14 leading technology suppliers for eCommerce, Digital Accounting and CRM software.

Additionally, the government has announced that Help to Grow: Digital will support one-to-one advice for SMEs on the best ways to adopt digital technology. The government has launched applications for advice platforms to partner with the scheme, and the advice service will go live later this year.

Business Minister Lord Callanan said: “Boosting productivity isn’t some abstract concept to be sniffed at – for individual SMEs it means bigger sales and breaking into new markets. It can add £100 billion to the British economy overall, creating jobs and opportunity across the country.

“Adopting the latest technology is proven to help businesses make the most of their potential, and by making more than one million firms eligible for the scheme, we’re helping to level up the UK economy and bolster the ability of our businesses to compete with the best worldwide.”

The Help to Grow: Digital sits alongside the Help to Grow: Management scheme as the government’s flagship programme to help small and medium-sized businesses to scale-up and grow. Help to Grow: Management offers business leaders 50 hours of leadership and management training across 12 weeks, with government covering 90% of the costs involved.

 

The schemes help businesses to boost their productivity and grow, which can lead to more high-skill, high-wage jobs. This is part of the government’s commitment to grow the economy to address the cost of living and level up opportunity across the UK, alongside standing behind businesses by cutting fuel duty and raising the Employment Allowance.