Tag: Treasury

The press release issued by HM Treasury on 20 October 2022.

More than one million claimant families receiving tax credits, and no other means-tested benefits, will get their second Cost of Living Payment from Wednesday 23 November 2022, HM Revenue and Customs (HMRC) has confirmed.

This £324 government payment will be paid automatically into most eligible tax credit-only customers’ bank accounts between 23 and 30 November 2022 across the United Kingdom.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:

This second Cost of Living Payment will provide further financial support to eligible tax credit-only claimants across the UK.

The £324 will be paid automatically into bank accounts, so people don’t need to do anything to receive this extra help.

The second payment will see more than 8 million households across the UK receive their £324 cost of living cash boost by 30 November and follows the first cost of living payments of £326, which eligible families received from Department for Work and Pensions (DWP) from July and HMRC from September.

The government recently announced that households receiving DWP benefits will get their second Cost of Living Payment from 8 November continuing through to 23 November. This includes tax credit claimants who also receive other income-related benefits from DWP.

HMRC is making payments shortly after DWP in order to avoid duplicate payments.

This latest payment comes on top of wider government support with the cost of living this autumn and winter, including:

• the £150 Disability Cost of Living Payment, already paid to around 6 million disabled people
• more than 8 million pensioner households who will receive an extra one-off £300 Winter Fuel Payment this year

This is in addition to an extension to the Household Support Fund, which is providing an extra £421 million for use between October 2022 and March 2023 to help vulnerable people with the essentials. A £150 Council Tax rebate was sent earlier this year to those in Council Tax bands A to D in England, creating at least £1,200 in direct support for millions of households.

A £400 reduction on energy bills is also being given to all domestic electricity customers over the coming months, and the Energy Price Guarantee is protecting households from significant rises in their energy bills this winter.

The government is offering help for households. Customers should check GOV.UK to find out what cost of living support they could be eligible for.

The press release issued by the Treasury on 18 October 2022.

The sixth meeting of the Specialised Committee on Financial Provisions (SCFP) was held today, 18 October 2022. The meeting was co-chaired by officials from the UK Government and the European Commission. This Committee is assigned by the Withdrawal Agreement Joint Committee to undertake work related to the implementation of the financial provisions in Part V of the Withdrawal Agreement.

The UK and the EU exchanged updates on the tasks carried out under the remit of this Specialised Committee. Both parties noted the positive engagement on the annual reporting package required by the Withdrawal Agreement and the associated invoices. The fourth invoice was provided by the European Commission in September. The payment of these amounts will be made in eight monthly instalments, with the first due date set on 31 October 2022, in accordance with the terms of the Withdrawal Agreement. The European Commission will continue submitting these payment communications to the UK twice annually, in April and September, until outstanding net liabilities are extinguished.

The UK and EU sides reaffirmed their commitment to complying with their legal obligations under the Withdrawal Agreement.

The two sides appreciated the ongoing good cooperation in this field, and committed to continue working collaboratively on a range of implementation issues, in recognition of the mutual benefit of a smooth implementation of the financial provisions of the Withdrawal Agreement.

The press release issued by HM Treasury on 18 October 2022.

Lord Jitesh Gadhia, Sabine Chalmers and Tom Shropshire will take up their roles at the Bank’s Court in the coming months.

Her Late Majesty Queen Elizabeth the Second approved the appointment of three new non-executive directors (NEDs) of the Court of the Bank of England. These appointments will be made by the King.

The new NEDs will take up their roles at the Bank’s Court in the coming months for terms lasting four years.

The Bank’s Court acts as the governing body responsible for setting the organisation’s strategy, budget and taking key decisions on resourcing and appointments. The Court is not responsible for the matters reserved to the Bank’s main policy committees, the Monetary Policy Committee, the Financial Policy Committee and Prudential Regulation Committee.

Jeremy Hunt, the Chancellor of the Exchequer, said:

“I am delighted to be able to announce the appointment of Lord Jitesh Gadhia, Sabine Chalmers and Tom Shropshire. Each of them will bring immense skill and experience to the Bank’s Court.

“I look forward to continuing to work closely with the Bank’s leadership, and remain fully committed to its independence.”

Andrew Bailey, Governor of the Bank of England, said:

“I am very pleased to welcome Lord Jitesh Gadhia, Sabine Chalmers and Tom Shropshire as non-executive directors of Court. Their varied experiences make them invaluable additions to Court and the running of the Bank. I look forward to working with them all.”

David Roberts, incoming Chair of Court, said:

“I am delighted to welcome Jitesh, Tom and Sabine to the Bank’s Court of Directors. They will bring fresh insights, deep wisdom and wide experience to help Court fulfil its role of promoting the good of the people of the United Kingdom.”

About the appointments

The Bank of England is the central bank of the UK. It is governed by the board of directors known as the Court of Directors. Further information can be found at the Bank of England website.

All members of the Court are appointed by the Crown on the recommendation of the Prime Minister and the Chancellor of the Exchequer.

All appointments to the Court are made on merit and political activity plays no part in the selection process.

These appointments are regulated by the Commissioner for Public Appointments, who provides independent assurance that appointments are made in accordance with the Government’s Principles of Public Appointments and Governance Code.

About Lord Jitesh Gadhia

Lord Jitesh Gadhia has over 25 years of investment banking and financial services experience, having held senior positions at Blackstone, Barclays Capital, ABN AMRO and Baring Brothers. Lord Gadhia currently serves on the boards of Rolls-Royce Holdings plc, Taylor Wimpey plc and Compare The Market Limited. He previously served on the boards of UK Financial Investments Limited (UKFI) and UK Government Investments Limited (UKGI).

About Sabine Chalmers

Sabine Chalmers is general counsel, company secretary, and director of regulatory affairs at BT. Sabine was previously chief legal and corporate affairs officer and company secretary of Anheuser-Busch InBev. Sabine is currently a non-executive director at Anheuser-Busch InBev and has also served as a non-executive director at Coty.

About Tom Shropshire

Tom Shropshire is the general counsel and company secretary of Diageo plc. Prior to this, he was a partner at Linklaters LLP, where he was global head of the US Practice, founder and co-head of the Risk and Resilience Practice and a member of their executive committee.

Footnotes:

In accordance with the original Nolan principles, there is a requirement for appointees’ political activity (if any is declared) to be made public. Lord Jitesh Gadhia was appointed as a Conservative Peer in 2016 and he became a non-affiliated member of the House of Lords in February 2017. Sabine Chalmers and Tom Shropshire have confirmed they have not engaged in any political activity in the last five years.

The press release issued by HM Treasury on 18 October 2022.

Families could save up to £2,000 a year towards their childcare costs to help pay for October half-term holiday clubs and wraparound care during the school terms, reminds HM Revenue and Customs (HMRC).

More than 391,000 families saved money on their childcare costs in June 2022, worth a total of £41.6 million in top-up payments, and HMRC is urging thousands of other families to not miss the chance to save up to £500 every 3 months, or £1,000 if their child is disabled.

Families can sign up to Tax-Free Childcare to help pay for holiday clubs, before and after-school clubs, childminders and nurseries, and other approved childcare schemes. It is available to families with children up to the age of 11, or 17 if their child has a disability.

The government will pay 20% of childcare costs by topping up the money paid into a Tax-Free Childcare account. This means for every £8 paid into the online account, families will automatically receive an additional £2 in government top-up.

Families can find out more about Tax-Free Childcare via the Childcare Choices website.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

Tax-Free Childcare can make a big difference to families, helping with the bills for things like holiday clubs, nurseries, childminders and after school clubs. It’s easy to register – search ‘Tax-Free Childcare’ on GOV.UK.

For thousands of families who use Tax-Free Childcare, the money they save each month on their childcare costs is money that goes back into their pockets. Accounts can be opened at any time of the year and can be used straight away, money can be deposited at any time and used when needed. Any unused money that is deposited can be simply withdrawn at any time.

More than one million families in the UK are entitled to some form of government childcare support and the government is encouraging those eligible to not miss out on their entitlements. Families can find out what childcare support is best for them via Childcare Choices.

The press release issued by HM Treasury on 17 October 2022.

The press release issued by the Treasury on 17 October 2022.

• The ‘Energy Markets Financing Scheme’ opens today to help support viable energy firms with major operations in the UK from the unprecedented volatility triggered by Russia’s illegal invasion of Ukraine.
• These firms will be able to apply for government-backed guarantees to secure commercial financing and meet large margin calls from energy price volatility.
• Following a rigorous approval process, a 100% guarantee will be issued to commercial banks on additional lending for approved firms. The Government will only be liable if a firm defaults on their repayment.

Russia’s brutal and illegal invasion of Ukraine has led to unprecedented volatility in wholesale energy markets. Over the past month, natural gas futures prices have been changing by more than 15% a day.

This backstop scheme will help firms facing temporary short-term financing problems.  The EMFS will allow commercial banks to provide larger credit lines to approved energy firms that are unable to meet extraordinary margin calls due to large moves in energy prices.

This vital intervention will help support wider confidence in the energy market and could help reduce the eventual cost of energy for businesses and consumers.

The scheme will be open to firms of good credit quality playing a significant role in UK energy markets, as generators, shippers or suppliers. They must currently operate in the UK energy market and must be, or have an entity which is, Ofgem-licensed. Firms will need to demonstrate they are facing large liquidity needs from margin calls when hedging their energy price risk. The EMFS is broadly similar to schemes launched in Germany, Finland and Sweden.

Chancellor of the Exchequer, Jeremy Hunt, said:

“A resilient energy market is vital as we all grapple with the consequences of Putin’s horrifying invasion of Ukraine and his decision to weaponise Russia’s energy reserves.

“Today we are continuing to act to ensure the market itself is secure, significantly reducing any risk of market failure.”

Governor of the Bank of England, Andrew Bailey, said:

“The volatility in energy markets we have seen in recent months, caused by Russia’s invasion of Ukraine, has resulted in a number of energy firms facing extraordinary liquidity requirements.

“This scheme will provide short-term financial support for these firms so they can weather this period, while also supporting the wider resilience of energy markets in the UK.”

From today, the Bank will screen initial applications for eligibility. HM Treasury will then robustly assess the credit risks and limits before giving final approval. The Bank will then issue a 100% guarantee to the energy firms’ existing commercial bank or banks they use for additional lending. Whilst using the scheme, energy firms will be required to comply with a set of policy conditions, such as restrictions on the use of funds, executive pay, and capital distributions.

Firms have three months to apply and once approved will be able to benefit from a guarantee for a further 12 months.

State owned firms and energy firms owned by financial institutions and commodity trading houses will not be eligible for the scheme.

The ‘Energy Markets Financing Scheme’ was announced on 8 September 2022 alongside the Energy Price Guarantee, with further details confirmed as part of the Government’s Growth Plan on 23 September 2022.

The press release issued by the Treasury on 17 October 2022.

The EMFS was announced by the Prime Minister on 8 September, and in The Growth Plan the then Chancellor confirmed that it will provide a 100% guarantee to commercial banks to provide additional lending to energy firms.

Delivered with the Bank of England, this scheme addresses the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and electricity markets as a result of margin calls.

Energy prices have been high and volatile in recent months. As a result, large amounts of collateral are required to enter into contracts firms use to effectively insure themselves from price fluctuations, or otherwise firms must accept large credit exposures to their counterparties.

The details of the scheme are being announced today, and firms can start to apply via the Bank of England. Applications will be accepted for a period of three months.

The scheme is aimed at providing a backstop to support energy firms facing large and unexpected margin calls. Pricing and conditions will reflect this objective. The scheme will provide resilience to energy markets and therefore help to reduce the eventual cost for businesses and consumers.

Further details on the structure of the scheme can be found on the Bank of England’s website and the market notice published today. To apply to the scheme please contact EMFS-Applications@bankofengland.co.uk

Scheme Eligibility
As part of the application process, firms will need to demonstrate that they meet the eligibility criteria.

The EMFS is intended to support energy firms who are facing short term liquidity challenges but would be otherwise in sound financial health. Eligibility will be considered based on the following criteria:

Firms must demonstrate they are in sound financial health (firms must be otherwise solvent and solvency will be assessed through robust due diligence processes)
Firms must be Ofgem-licensed (or have an Ofgem-licensed entity), and have a pre-existing relationship with an approved commercial bank or banks;
In addition, firms must also demonstrate they are making a material contribution to UK energy markets through meeting one or more of the requirements outlined below:

They make material contribution to the UK electricity or gas markets and can demonstrate that they are likely exposed to large margin calls;

They are heavily inter-connected and the loss of activity would have a significant impact on markets or other energy firms.

Eligibility will be assessed by the Bank of England and an Advisory Committee convened by HMT, who will make a recommendation for the Chancellor to make a decision to approve or reject each application.

Eligible firms who wish to apply for a guarantee will be required to comply with a set of policy conditions, such as restrictions on executive pay and capital distributions. For the full list of conditions, please refer to the market notice.

Financial institutions, state owned enterprises or commodity trading houses are not eligible for this scheme. State owned enterprises should seek to access alternative support from their relevant governments before approaching the Government.

Application process
Firms can apply to the scheme for the next three months. Each loan facility agreement will last up to 12 months and will begin from when the guarantee is issued by the commercial lender.

Applications will be assessed initially by the Bank of England, and then by Advisory Committee, who will make a recommendation for the Chancellor to decide whether to approve or reject an application.

The press release issued by the Treasury on 17 October 2022.

The Chancellor will make a statement later today, bringing forward measures from the Medium-Term Fiscal Plan that will support fiscal sustainability.

He will also make a statement in the House of Commons this afternoon.

This follows the Prime Minister’s statement on Friday, and further conversations between the Prime Minister and the Chancellor over the weekend, to ensure sustainable public finances underpin economic growth.

The Chancellor will then deliver the full Medium-Term Fiscal Plan to be published alongside a forecast from the independent Office for Budget Responsibility on 31 October.

The Chancellor met with the Governor of the Bank of England and the Head of the Debt Management Office last night to brief them on these plans.

The press release issued by the Treasury on 17 October 2022.

The Chancellor of The Exchequer Jeremy Hunt has today, Monday 17 October, brought forward a number of measures from 31 October’s Medium-Term Fiscal Plan.

• Changes designed to ensure the UK’s economic stability and provide confidence in the government’s commitment to fiscal discipline
• Basic rate of income tax to remain at 20% until economic conditions allow for it to be cut, IR35 and dividend tax rate reforms no longer going ahead
• Treasury-led review of energy support after April 2023 launched

Following conversations with the Prime Minister, the Chancellor has taken these decisions to ensure the UK’s economic stability and to provide confidence in the government’s commitment to fiscal discipline. The Chancellor made clear in his statement that the UK’s public finances must be on a sustainable path into the medium term.

Today’s announcement represents another down payment following the reversal of the corporation tax cut announced on Friday 14 October by the Prime Minister. The Chancellor will publish the government’s fiscal rules alongside an OBR forecast, and further measures, on 31 October.

In his statement the Chancellor announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in parliament. The following tax policies will no longer be taken forward:

• Cutting the basic rate of income tax to 19% from April 2023. While the government aims to proceed with the cut in due course, this will only take place when economic conditions allow for it and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely. This is worth around £6 billion a year.
• Cutting dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase, which took effect in April 2022, will now remain in place. This is valued at around £1 billion a year.
• Repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will now remain in place. This will cut the cost of the government’s Growth Plan by around £2 billion a year.
• Introducing a new VAT-free shopping scheme for non-UK visitors to Great Britain. Not proceeding with this scheme is worth around £2 billion a year.
• Freezing alcohol duty rates from 1 February 2023 for a year. Not proceeding with the freeze is worth approximately £600 million a year. The next steps of the Alcohol Duty Review announced in Growth Plan 2022 will continue as planned. The alcohol duty uprating decision and interactions with the wider reforms to alcohol duties under the Alcohol Duty Review will be considered in due course.

This follows on from the previously announced decisions not to proceed with the Growth Plan proposals to remove the additional rate of income tax and to cancel the planned increase in the corporation tax rate.

Taken together, these changes are estimated to be worth around £32 billion a year.

The government’s reversal of the National Insurance increase and the Health and Social Care Levy, and the cuts to Stamp Duty Land Tax, will remain benefitting millions of people and businesses. The £1 million Annual Investment Allowance, the Seed Enterprise Investment Scheme and the Company Share Options Plan will also continue to further support business investment.

Energy bills support review

The government has announced unprecedented support within its Growth Plan to protect households and businesses from high energy prices. The Energy Price Guarantee and the Energy Bill Relief Scheme are supporting millions of households and businesses with rising energy costs, and the Chancellor made clear they will continue to do so from now until April next year.

However, looking beyond April, the Prime Minister and the Chancellor have agreed that it would be irresponsible for the government to continue exposing the public finances to unlimited volatility in international gas prices. A Treasury-led review will therefore be launched to consider how to support households and businesses with energy bills after April 2023. The objective of the review is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need. The Chancellor also said in his statement that any support for businesses will be targeted to those most affected, and that the new approach will better incentivise energy efficiency.

The government is prepared to act decisively and at scale to regain the country’s confidence and trust. The Chancellor stated in his speech that there will be more difficult decisions to take on both tax and spending. This means doing what is needed to lower debt in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.

In light of this, government departments will be asked to find efficiencies within their budgets. The Chancellor is expected to announce further changes to fiscal policy on 31 October to put the public finances on a sustainable footing.

The press release issued by the Treasury on 14 October 2022.

The government has today, Friday 14 October, announced that Corporation Tax will increase to 25% from April 2023 as already legislated for, raising around £18 billion a year and acting as a down payment on its full Medium-Term Fiscal Plan.

• The Prime Minister has set out that the way the government is delivering on its mission to achieve a low tax, high wage, high growth economy is to change.
• The legislated increase in the Corporation Tax rate from April 2023 will go ahead, with most small businesses benefitting from the new small profits rate.
• Chancellor Jeremy Hunt will deliver the Medium-Term Fiscal Plan on 31 October, detailing action to get debt falling as a percentage of GDP over the medium term.

The decision has been taken in recognition of the need to ensure the UK’s economic stability and reassure markets of its commitment to fiscal discipline, after elements of September’s Growth Plan went further and faster than markets were expecting.

The Prime Minister has set out that the government is prepared to do whatever is necessary to ensure debt is falling as a share of the economy in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.

The previously announced small profits rate of Corporation Tax will be maintained. Smaller or less profitable businesses will not pay the full 25% rate, and companies with less than £50,000 of profit – the large majority – will not see any increase at all, continuing to pay Corporation Tax at 19%.

The UK’s corporate tax regime will remain competitive and supportive of growth at the 25% rate, continuing to be the lowest rate in the G7. As part of the forthcoming tax review, the government will look at how the tax system can go further to promote growth and investment.

The government is committed to growing the economy and taking forward supply-side reforms that will ignite strong and sustained growth that delivers prosperity for the UK.

Chancellor of the Exchequer Jeremy Hunt will set out the government’s Medium-Term Fiscal Plan on 31 October, alongside a full forecast from the independent Office for Budget Responsibility.