Tag: Treasury

The press release issued by HM Treasury on 27 April 2023.

Millions of people could benefit from plans to help them boost their future savings as the government today (27 April) publishes a range of tax measures to make the system simpler and more effective.

• Government moves towards simplifying Help to Save
• Action to be taken to help parents who haven’t claimed Child Benefit and may have missed out on credits for their State Pension
• Government publishes 23 technical tax updates, many of which simplify and modernise the tax system

The Help to Save scheme – for working people on low incomes who are claiming certain benefits – could be made simpler by reforms to how its bonus is calculated, the length of time an account can be open for and eligibility requirements, all with the aim of enhancing long-term savings habits.

Help to Save was launched in 2018 and allows certain people entitled to Working Tax Credit or receiving Universal Credit to get a bonus of 50p for every £1 they save. Accounts can be open for a maximum of four years and savers can put a maximum of £50 into their accounts every month.

The government wants to encourage more people to open accounts, since the scheme began more than £255 million has been saved through it.

These moves to simplify tax form part of 2023’s Tax Administration and Maintenance Day (TAMD), where 23 technical documents in total have been published.

Victoria Atkins, Financial Secretary to the Treasury, said:

Rising prices are putting household budgets under strain – and it’s in tough times like these that many people turn to their savings.

We want to support savers and make sure the tax system provides them with the options they need to shore-up their finances, helping them through rainy days as well as helping them plan for the future.

A simpler tax system will also help deliver on the Prime Minister’s priorities of creating economic growth and reducing our country’s debt.

The government also wants to address the fact that some parents who have not claimed Child Benefit could miss out on building their state pension. Those affected will in future be able to claim National Insurance credit retrospectively as ministers move to tackle this issue.

When parents claim Child Benefit, they can also receive a National Insurance credit which helps them build their state pension. This is aimed at those who, due to caring responsibilities, are out of work or not earning enough to pay National Insurance, to ensure they are still able to do that.

The Government wants to ensure that parents who have not claimed Child Benefit are not disadvantaged when they start claiming their State Pension and is announcing a resolution for affected parents.

Parents do not need to take any action immediately. The government intends to legislate to allow eligible individuals to retrospectively claim National Insurance credit, and the next steps to be taken will be published in due course.

TAMD is a regular event following the Budget which sets out updates needed to the tax system, allowing these measures to be analysed and discussed in detail by tax and industry experts. As announced at Spring Budget, this year’s TAMD is focused on tax simplification and modernisation, and tackling the tax gap.

These changes deliver on the government’s commitment for a simpler tax system to help boost productivity and economic growth by reducing time and money wasted. Since the closure of the Office for Tax Simplification the government has committed to putting simplification at the heart of all tax policy making.

Other measures announced today as part of TAMD include:

• Tackling promoters of tax avoidance: As announced at the Spring Budget, the government is publishing a consultation on a possible new criminal offence for promoters of tax avoidance who don’t comply with a legal notice from HMRC to stop promoting a scheme and, separately, on speeding up the disqualification of directors of companies who promote tax avoidance.
• Protecting customers claiming tax: As announced on 11 January 2023, the government will require repayment agents to register with HMRC from next month.

The press release issued by HM Treasury on 25 April 2023.

City minister re-establishes influential forum convening senior leadership from industry and the FCA to identify and harness the potential of innovative new technologies for the UK asset management industry.

The Economic Secretary’s Asset Management Taskforce has been joined by five new senior executives from the UK’s world-class investment industry, it was announced today (25 April 2023).

Hans Georgeson (CEO, Royal London Asset Management), Mark Murray (Senior Partner, Artemis), Joseph Pinto (CEO, M&G Asset Management), Nick Ring (CEO EMEA, Columbia Threadneedle) and Andrew Telfer (CEO, Baillie Gifford) have joined the Taskforce in the wake of the Chancellor’s Edinburgh Reforms, which aim to drive growth and competitiveness in the financial services sector.

The Economic Secretary has also launched a new Technology Working Group, which will run in parallel to the Taskforce to examine the impact of new technology on the asset management sector. The group – chaired by Michelle Scrimgeour (CEO, Legal and General Investment Management) – will work to articulate the benefits of technology for investors and industry, and will identify the main opportunities presented by technologies including tokenisation, artificial intelligence and distributed ledger technology.

The group’s membership will be drawn from Taskforce members, government and regulators, and wider non-asset management stakeholders. It will hold a series of meetings over the next year and subsequently produce a final report to the Taskforce.

The report will explain the group’s findings and contain guidance and recommendations for government, regulators and industry. Previous reports produced by the Taskforce – on the UK funds regime and on stewardship – have been very successful in progressing their respective agendas.

Andrew Griffith, Economic Secretary to the Treasury said:

“Investment management is of central importance to the UK economy and I am determined to help it continue to flourish.

“The UK is well-placed to take advantage of the opportunities presented by new technology in financial services, and I look forward to the Technology Working Group’s findings with great interest.”

Asset Management Taskforce members

Stephen Cohen, Head of EMEA, BlackRock

Chris Cummings, CEO, Investment Association

Helen Dean, CEO, NEST

Hans Georgeson, CEO, Royal London Asset Management

Sean Hagerty, Managing Director of Europe, Vanguard

Peter Harrison, CEO, Schroders

Catherine Howarth, CEO, ShareAction

Mark Murray, Senior Partner, Artemis

Joseph Pinto, CEO, M&G Asset Management

Anne Richards, CEO, Fidelity International

Nick Ring, CEO EMEA, Columbia Threadneedle

Michelle Scrimgeour, CEO, Legal & General Investment Management

Andrew Telfer, CEO, Baillie Gifford

Patrick Thomson, CEO EMEA, JP Morgan Asset Management

Sarah Pritchard, Executive Director – Markets, Financial Conduct Authority (FCA)

The press release issued by HM Treasury on 18 April 2023.

459 directors were disqualified in 2022-23 for abuse of the pandemic financial support schemes, with average disqualification length of seven years four months, up from five years ten months last year.

Over 450 directors have been disqualified by the Insolvency Service in 2022-23 for abusing the COVID-19 financial support scheme, as the agency continues to clamp down on pandemic fraudsters.

Figures published today by the Insolvency Service also show that directors guilty of COVID-19 related misconduct are being hit with longer disqualification periods. The average length of bans handed out to directors in the last year was seven years four months, up from five years ten months in 2021-22.

Of the total 932 director disqualifications obtained by the Insolvency Service in 2022-23 – 459 were cases involving COVID-19 financial support scheme abuse.

In addition to its civil enforcement action, the Insolvency Service also brought criminal prosecutions against six directors in 2022-23 for COVID-19 related misconduct. All of the prosecutions resulted in a conviction and resulted in immediate imprisonment in one case.

Dave Magrath, Director of Investigation and Enforcement at the Insolvency Service, said:

These fraudsters are just the latest to find out that we will not hesitate to take firm action where we uncover such abuse, and this can ultimately result in a jail sentence.

The purpose of the Bounce Back Loan scheme was to support businesses during the pandemic, but it is clear a minority of company directors chose to maliciously abuse the scheme and defraud the taxpayer. Our team of experts continue to work round-the-clock to bring these criminals to justice.

In three of the most recent cases, Bahar Dag was sentenced at St Albans Crown Court to two years six months in prison, with her husband Baris Dagistan sentenced to two years, having both pleaded guilty to offences involving a fraudulent application for a Bounce Back Loan.

Bahar Dag had claimed the full £50,000 Bounce Back Loan by stating the company’s turnover was £200,000. However, it was closer to £40,000. When Insolvency Service investigators made contact, and the couple realised they had been caught, they repaid the Bounce Back Loan in full.

Separately, Jubelur Rohman, sole director of Better Day Ltd which gave its business address the Indian Ocean restaurant in Wrexham until 2019, has been disqualified as a director for 11 years following an investigation into his company’s £50,000 Bounce Back Loan obtained in October 2020.

After his company went into liquidation in 2022 with debts over £150,000, Insolvency Service investigators found it had in fact ceased trading in October 2019, with the restaurant currently at the address being owned by a different company. But the rules of the Bounce Back Loan scheme were clear that businesses had to have been trading on 1 March 2020 to be eligible for any funding.

Rohman took out over £40,000 in cash from the company’s bank account between October 2020, when the loan money was received, and March 2021. Yet there was no evidence to show the funds had been spent for the economic benefit of the company.

In another case, Craig McCourt, the sole director of Craig McCourt Electrical Services Ltd, an electrical installation company in Ross-shire, has been disqualified as a director after he applied for Bounce Back Loan funding on two separate occasions, despite his company having already ceased trading and therefore not eligible for any financial assistance.

Although he later dissolved his company, he was caught thanks to new powers granted to the Insolvency Service which enable it to investigate directors of dissolved companies, particularly where bosses are suspected of using this as a tactic to avoid repaying taxpayer-backed Covid-19 support money.

At the point he dissolved the company in October 2020, nearly all its £20,000 Bounce Back Loan remained outstanding. The company was identified on government counter-fraud systems and under the new powers – which came into effect in December 2021 – the Insolvency Service launched an investigation.

Investigators discovered that not only had Craig McCourt Electrical Services Ltd not been trading since September 2019 – meaning he had breached the terms of the scheme when he applied for the loan – but he had immediately transferred the £15,000 loan to another bank account. Investigators then discovered that he had applied for the extra £5,000 top-up loan for the company in November 2020 – a month after the business had finally been dissolved. He had also transferred this money to a separate bank account.

As a result, Craig McCourt has been disqualified for 11 years.

Rohman and McCourt’s bans prevent each of them from directly or indirectly becoming involved in the promotion, formation, or management of a company, without the permission of the court.

The press release issued by HM Treasury on 18 April 2023.

The Council provides independent, expert advice on economic policy to help grow the economy.

• Andy Haldane, Dr Anna Valero and Sir Jonathan Symonds CBE will join the Chancellor’s Economic Advisory Council (EAC).
• The council meets regularly to discuss the UK economy and advises the Chancellor – with a focus on growing the economy.

The Chancellor of the Exchequer, Jeremy Hunt has today (Tuesday 18 April) announced three new members of the Economic Advisory Council.

The Council provides independent, expert advice on economic policy to help grow the economy.

All members attend in an independent capacity and have been chosen for their personal knowledge and expertise.

The Chancellor of the Exchequer, Jeremy Hunt said:

“I am delighted to announce three new members of the Economic Advisory Council who collectively have decades of economic experience across the private and public sector.

“Economic growth is essential to our long-term prospects and in the face of global headwinds, this council plays a critical role in helping our economy meet these challenges.”

The appointments bring membership of the Council to seven advisors – and the next meeting will be convened later in the Spring.

About the members:

Andy Haldane FAcSS, FRS, FRSA

Andy Haldane has served as the Chief Executive of the Royal Society for Arts (RSA) since 2021. He worked at the Bank of England between 1989 and 2021 where he became the Chief Economist and a member of the Bank’s Monetary Policy Committee. Haldane was appointed Chair of the Levelling up Advisory Council in June 2022.

Dr Anna Valero

Anna Valero is a Senior Policy Fellow at the London School of Economics (LSE) Centre for Economic Performance, Deputy Director of the Programme on Innovation and Diffusion, and an Associate of the Grantham Research Institute on Climate Change. Her research is focused on the drivers of productivity and innovation in firms and regions. She also works on UK growth policy more broadly, with a particular focus on sustainable growth and green jobs.

Sir Jonathan (Jon) Symonds, CBE

Jon Symonds was appointed Chair of the board at Glaxo Smith Kline (GSK) in September 2019. He also serves as, Non-Executive director at Genomics England Limited, a member of the European Round Table for Industry, and as a Senior Advisor to Chatham House. Symonds has extensive international financial, life sciences and governance experience.

Further information

• Care will be taken to ensure Council members are not privy to any material non- public information, or market sensitive information.
• Read the terms of reference for the government’s Economic Advisory Council.
• The new members will join the below Council members announced in October:
  • Rupert Harrison, BlackRock
  • Sushil Wadhwani, PGIM Wadhwani
  • Karen Ward, J. P. Morgan Asset Management
  • Gertjan Vlieghe, Element Capital

The press release issued by HM Treasury on 18 April 2023.

All assets and economic resources belonging to Nazem Ahmad in the UK have been frozen.

• Suspected Hizballah financier Nazem Ahmad has been sanctioned using domestic counter-terrorism powers.
• Powers used for the first time in order to curtail a suspected international terrorism financing network.

The UK Government has announced a full asset freeze against an individual suspected of financing the terrorist group Hizballah.

Nazem Ahmad has been sanctioned as part of continued efforts to prevent terrorism in the interests of national security. The move will also protect the integrity of the UK economy from terrorist financing threats.

All assets and economic resources belonging to Ahmad in the UK have been frozen and no UK person may do business with him or any of the companies he owns or controls.

This is the first use of the Treasury-led domestic counter terrorism regime, which is used to target those who HM Treasury has reasonable grounds to suspect are involved in terrorist activity.

Treasury Lords Minister Baroness Penn said:

“We will always proactively defend our economy against those who seek to abuse it.

“The firm action we have taken today will clamp down on those who are funding international terrorism, strengthening the UK’s economic and national security.”

The action is part of a coordinated effort with partners to disrupt an international terrorist-financing operation.

Ahmad has an extensive art collection in the UK and he conducts business with multiple UK-based artists, art galleries and auction houses. Following his designation he will be prevented from trading in the UK art market, and other dealers in high-value items will no longer be able to conduct business with him and his associated companies including White Starr DMCC, Bexley Way General Trading LLC, Best Diamond House DMCC, Sierra Gem Diamonds Company NV, Park Ventures SAL and the Artual Gallery.

Further information

• This is first time use of powers to designate an individual under the Counter Terrorism (Sanctions) (EU Exit) Regulations 2019.
• An asset freeze means that it is generally prohibited to deal with the funds or economic resources which are owned, held or controlled by a designated person. The freeze prohibits the making available of further funds or economic resources directly or indirectly to a designated person, and engagement in actions that directly or indirectly circumvent the prohibitions.
• When an asset freeze is applied, the funds or economic resources are frozen immediately by the person in possession or control of them.
• Imposing an asset freeze does not change the ownership of the frozen funds or economic resource and nor are they transferred to the Office of Financial Sanctions Implementation or HM Treasury for safekeeping.

Sanctioned individual

Nazem Ahmad, suspected Hizballah financier who has control over White Starr DMCC, Bexley Way General Trading LLC, Best Diamond House DMCC, Sierra Gem Diamonds Company NV, Park Ventures SAL and the Artual Gallery.

The press release issued by HM Treasury on 13 April 2023.

The Economic Secretary to the Treasury, Andrew Griffith MP, has appointed Martin Egan as a Non-Executive Director of the Debt Management Office (DMO) Advisory Board.

Martin has extensive experience in financial markets, including as former Global Co-Head of Primary and Secondary Credit at BNP Paribas.

In this role Martin will support the DMO’s Chief Executive and senior team and bring considerable experience, skills and judgement to the full array of Advisory Board issues.

Martin will be appointed for a three-year term. He will replace Paul Richards whose term on the DMO Advisory Board has come to an end.

Economic Secretary to the Treasury, Andrew Griffith said:

“I am very pleased to announce the appointment of Martin Egan. He will bring a vast amount of knowledge, skill and experience to the Advisory Board, helping the DMO to continue delivering its critical role.

“I would also like to thank Paul Richards for his excellent contribution to the work of the DMO.”

Sir Robert Stheeman, Chief Executive of the DMO, said:

“I am delighted that Martin Egan has been appointed to join our Advisory Board as a Non-Executive Director.

“Martin’s extensive knowledge and experience of fixed income markets means that he will be well placed to support the DMO in continuing to deliver its critical objectives, including meeting the government’s financing requirements, to the highest standards.”

Martin Egan said:

“It is an immense privilege to act in an Advisory Role for the UK DMO in an incredibly exciting but also challenging environment. The UK DMO is recognised globally for its expertise and best in class standards and I hope my experience can assist the evolution of the DMO as we embrace the financial markets of the future.”

About Martin Egan

Martin Egan has 37 years of experience in financial markets. Most of his career was spent at BNP Paribas in various roles including Managing Director Global Co-Head Primary and Secondary Credit, Vice Chairman of the Global Markets Client Board, and Chair of BNPP UK Ltd. He was also Chair of the Diversity and Inclusion Network at BNPP UK. Earlier in his career he held roles at JP Morgan Ltd., UBS Investment Bank and Credit Suisse First Boston.

Martin was also the Chair of the Board of the International Capital Market Association from May 2017 to May 2018, and a member of the Board for another 5 years before that.

Martin confirmed he has not engaged in any political activity in the last five years.

About the appointment process

The DMO is an executive agency of HM Treasury which is responsible for debt and cash management for the UK Government, lending to local authorities and managing certain public sector funds.

Martin Egan has been appointed following an open recruitment process run by HM Treasury. A panel comprising of Dame Sue Owen (Non-Executive Chair, DMO Advisory Board), Ruth Curtice (Director of Fiscal, HM Treasury) and Kevin Parry OBE (independent panel member) interviewed a number of candidates and made recommendations to the Economic Secretary to the Treasury, which informed his decision.

The press release issued by HM Treasury on 13 April 2023.

Chancellor confirms UK stands ready to provide additional $500 million in UK guaranteed loans for Ukraine, plus $670 million in new loan funding for developing nations.

• New money brings total UK funding for IMF’s trusts to $5.3 billion to help reduce poverty and boost energy security, plus $1 billion for Ukraine this year
• Funding confirmed as Chancellor reaffirms his plan to get the U.K. economy growing to global finance ministers meeting in Washington D.C. this week

Today, Jeremy Hunt, Chancellor of the Exchequer, has confirmed the UK stands ready to provide an additional $500m in UK guaranteed loans for Ukraine, taking this year’s total to $1 billion and the total amount pledged by the UK in support of Ukraine to £6.5 billion. This comes as he attends the International Monetary Fund’s Spring Meetings in Washington D.C., alongside fellow supporters of Ukraine, and today took part in a roundtable on support for the country.

This new money will help to meet Ukraine’s economic needs including covering the costs of vital government services, such as running hospitals and schools as well as supporting the most vulnerable Ukrainians.

The Chancellor has also committed a further $670 million to reduce poverty and drive growth, going above and beyond previous commitments to boost financial support for developing nations through the International Monetary Fund’s (IMF) Poverty Reduction and Growth Trust. With this pledge the UK has fulfilled the commitment made during its G7 Presidency to deliver multi-billion-dollar funding to fight poverty and boost growth.

This funding brings the total given by the UK to the Trust to $2 billion and comes alongside the UK’s delivery of a $3.3 billion pledge to the IMF’s Resilience and Sustainability Trust, which provides affordable long-term financing to low-income countries and vulnerable middle-income countries to address challenges such as climate change, energy security and pandemic preparedness.

Chancellor of the Exchequer Jeremy Hunt said:

The $1 billion of budget support we have committed to Ukraine this year will ensure that the country has the financing to keep the lights on, hospitals running and schools open. This, alongside UK military support, will help defeat Putin.

But our efforts for a fairer world don’t end there. We are also making good on our G7 Presidency commitments and delivering a multi-billion-pound package of support to reduce poverty and bolster energy security across developing countries.

The UK’s financial commitment to Ukraine has helped unlock the IMF’s provision of a $15.6 billion 4-year programme for the country.

In total, the UK has pledged £6.5 billion in support of Ukraine, including $1 billion in loans guaranteed by the UK to support Ukraine’s economy in 2023 – meaning that it can continue to pay pensions and public sector pay – and £2.3 billion in military support for 2023. This June the UK will also host the Ukraine Recovery Conference, focussing on mobilising further private sector investment.

At the IMF Spring Meetings, the Chancellor will also highlight the impact of Russia’s illegal war in Ukraine on the global economy and push for action in addressing developing country needs on debt. The economic impacts from Putin’s illegal war in Ukraine are being felt across the globe, with developing nations particularly affected by increases in food prices. The latest $670 million commitment to the Poverty Reduction and Growth Trust adds to the UK’s previous agreement to the fund of $1.3 billion, with the total now standing at $2 billion.

The Chancellor signed this commitment on Wednesday alongside IMF Managing Director Kristalina Georgieva. In this meeting, he also finalised a $3.3 billion pledge on behalf of the UK to the IMF’s Resilience and Sustainability Trust. Funding for this Trust will play a vital role in providing financing to bolster energy and combat climate change, including for Ukraine and other countries worst affected by the war.

Foreign Secretary James Cleverly said:

Russia continues to bombard Ukraine’s people and destroy Ukrainian infrastructure. The UK is resolute in its commitment to support Ukraine until peace is agreed on Ukrainian terms.

This funding will boost Ukraine’s economic resilience and bolster its resistance against Russia. Working with the IMF and international partners, I am proud of the UK’s contribution to unlocking vital finance for Ukraine.

Ensuring Ukraine’s fiscal, humanitarian and recovery needs is a core part of our long-term commitment to Ukraine. That’s why the UK is proud to be co-hosting – jointly with Ukraine – the Ukraine Recovery Conference.

A challenging World Economic Outlook published by the IMF earlier this week predicted a ‘rocky road’ for global economies, including the U.K., however Britain is still forecast to see faster growth than Germany, France and Italy in each of years from 2025 to 2028. The UK avoided recession in 2022 and is now expected to avoid recession this year. According to the independent Office for Budget Responsibility, the UK is on track to more than halve inflation this year and reduce debt by the end of the forecast period.

The Chancellor is currently attending his first IMF meeting in Washington D.C., discussing how his Autumn Statement and Spring Budget have set the UK on a stable path to growth. He will attend IMF Committee meetings, G7 and G20 finance minister meetings and a series of bilateral engagements.

Chancellor of the Exchequer Jeremy Hunt said:

Our support for other countries comes at a time when I am deeply focussed on getting the UK’s economy growing, and our plan for that is working as we’re on track to halve inflation this year.

A strong UK economy, creating jobs and raising living standards for all will benefit citizens at home as well as having knock on positive impact around the world.

The press release issued by HM Treasury on 11 April 2023.

The Chancellor has today announced that he has appointed Megan Greene as an external member of the MPC of the Bank of England.

The press release issued by HM Treasury on 6 April 2023.

Lighthouse International Group Holdings Trading LLP has been wound-up in the public interest by the High Court following an Insolvency Service investigation.

Lighthouse was incorporated in 2012, and purported to offer life coaching services as well as mentoring, career and business development services. It promised on its website that customers subscribing to its products and services would be able to “optimise results in your life, in direct proportion to your investment of time, money and effort”.

Customers who subscribed to the service paid substantial sums as identified from analysis of Lighthouse’s bank accounts. Between August 2014 and July 2022 Lighthouse received over £2.4m in income from customers. From this income at least half was paid over to Paul Waugh, a Lighthouse member over a four-year period, and smaller amounts were paid to other members.

The court found that Lighthouse failed to deliver up its trading and financial records, as required by law, during the Insolvency Service investigation. Therefore, the investigators were unable to fully determine the exact nature of its business activities or verify Lighthouse’s account provided in proceedings that it had operated as a “research community” that had never launched its work as a viable business. Lighthouse was also found to have filed misleading or false accounts. The accounts filed recorded that over a 9 year period it had nil assets or liabilities suggestive that it had not traded.

Lighthouse, and its members failed to fully co-operate with the Insolvency Service’s investigation.

Edna Okhiria, Chief Investigator at the Insolvency Service said:

Lighthouse and its members refused to co-operate with our investigation and the court rightly agreed to wind up the partnership.

Paul Waugh’s efforts to obstruct our work were deemed ‘unacceptable’ and ‘deliberate’ by the judge, who also commended the investigation team for its professionalism. Where we find evidence that directors or partners are failing to adhere to their statutory obligations, for example failing to maintain adequate records, we will seek to have them wound-up in the public interest.

As a result, Lighthouse International Group Holdings Trading LLP was wound-up in the public interest in the High Court of Justice Business and Property Courts by Deputy Judge Jones on 28 March 2023. The Official Receiver has been appointed as Liquidator of the LLP and has a statutory duty to investigate the conduct of all current and former partners as part of the Liquidation proceedings.

The press release issued by HM Treasury on 4 April 2023.

HMRC announces date for the first Cost of Living payment during the 2023 to 2024 tax year, for tax-credits only customers.

One million eligible claimant families receiving tax credits, and no other means-tested benefits, will get the first Cost of Living Payment for the 2023 to 2024 tax year from Tuesday 2 May 2023, HM Revenue and Customs (HMRC) has confirmed.

The £301 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 the 2023 to 2024 tax year.

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 payment for the 2023 to 2024 tax year 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 government support announced to tackle the cost of living in the 2023 to 2024 tax year, 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 government is offering help for households. Customers should check GOV.UK to find out what support they could be eligible for.

Additional information

To receive the £301 payment someone must (subject to a very limited exception) have been entitled to a payment of a qualifying benefit as follows:

• eligible tax credit-only customers, who will receive the £301 payment between 2 and 9 May 2023, must have received a payment of tax credits in respect of any day in the period 26 January 2023 to 25 February 2023, or later be found to have been entitled to a payment for this period.
• for joint claimants, where one claimant receives Working Tax Credit and the other claimant receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit.
• to be eligible for the DWP payment, families must have been entitled to a payment (or later found to be entitled to a payment) of either:

Universal Credit – payment for an assessment period ending between 26 January 2023 and 25 February 2023.

For all other DWP means-tested benefits, payment in respect of any day between 26 January and 25 February 2023.

• receiving a previous Cost of Living Payment does not mean you will be entitled to a future one. Customers will need to meet the separate eligibility criteria for each payment.

Customers do not need to apply for this payment. If customers are eligible through receiving tax credits only, HMRC will make the Cost of Living Payment automatically into the bank account where claimants already receive their tax credits. Customers might find that their payment is delayed if they have recently closed the bank account their tax credits are usually paid into.

If customers have not let HMRC know that their bank account has changed, HMRC will pay the money into their old bank account, meaning the payment will be rejected. If this happens, HMRC will follow this up by letter to the customer, letting them know that we need updated bank details.

If tax credit customers believe they are eligible but have not received a payment between the published payment dates, they should wait until 16 May 2023 at the earliest to contact HMRC. This is to allow time for their bank, building society or credit union to process the payment. We will not be able to provide customers with any further information before this date.

More than 8 million families on means-tested benefits will receive up to £900 during the 2023 to 2024 tax year, in up to 3 payments. This includes all eligible families entitled to a payment of the following benefits: Universal Credit; Income-based Jobseekers Allowance; Income-related Employment and Support Allowance; Income Support; Working Tax Credit; Child Tax Credit; and Pension Credit.

This payment is tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

The 3 means-tested cost of living payments are being delivered in 3 slightly different amounts of £301, £300, and £299. The distinct value relates to a specific qualifying period before the payment is made. This allows HMRC and DWP to ensure support is targeted at those who need it and are eligible; to determine if a payee received the correct payment and identify the payment value; and to reduce the risk of fraud as HMRC and DWP will be able to clearly track those who have received payment.

Beware of scams targeting cost of living payments. If someone contacts you about this payment saying they are from HMRC, it might be a scam.

You do not need to apply for this payment. HMRC will never ask for your bank details by SMS or email. Do not let yourself be rushed. Check advice on spotting scams by visiting GOV.UK and searching ‘phishing and scams’. You can also find ways to contact us on GOV.UK – search ‘Contact HMRC’ and choose ‘tax credits’.