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Customers urged to renew tax credits

HMRC is urging customers who haven’t already renewed their tax credits to do so in the next week or risk having their payments stopped.

The deadline to renew your tax credits, including child tax credits and working tax credits, is 31 July 2017.

Missing the deadline will mean your tax credits will stop and you may have to pay back the payments received since 6 April 2017.

Last year, 410,000 customers had their payments stopped or altered due to missing the deadline to inform HMRC of any changes to their circumstances.

These include changes to working hours, income and childcare costs and can be renewed either online, by telephone or paper form.

Further help and information on renewing tax credits is available via the HMRC website.

Rachel McLean, interim director general of customer services at HMRC, said:

“We know life can be hectic so the start and stop feature allows customers to begin and complete their renewal on a day and time convenient for them.

“I urge customers who have yet to renew their tax credits to do so as soon as possible, thereby avoiding having their payments stopped. The deadline is fast approaching.”

Contact us to discuss tax credits.

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UK inflation drops to 2.6%

The Consumer Prices Index (CPI) measure of inflation unexpectedly fell to 2.6% in June, down from 2.9% in May 2017.

The rate of inflation fell for the first since April 2016, although it remains higher than the rates seen over the last 4 years.

Last month’s fall was largely down to a further drop in fuel prices, which fell for the fourth month in a row according to the Office for National Statistics.

Suren Thiru, head of economics at the British Chambers of Commerce, said:

“With UK economic conditions softening, it is crucial the Monetary Policy Committee holds its nerve on interest rates, particularly during this period of heightened political uncertainty. 

“Raising rates too early could undermine consumer and business confidence, stifling UK growth further.”

Mike Cherry, national chairman at the Federation of Small Businesses, added:

“Confirmation that rates bills will rise in line with CPI rather than RPI from 2020 will go some way to supporting small firms that are struggling against sharp hikes in the future.

“Given that operating costs are now at their highest in 4 years, and against a backdrop of unprecedented political and economic uncertainty, help is needed now.” 

Contact us to discuss your business.

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Government raises state pension age

Workers born between 6 April 1970 and 5 April 1978 will have to remain in employment for an extra year after the government announced it will increase the state pension age to 68.

The decision means an estimated 5.8 million workers – or 1 in 7 – will have to work an additional year before they qualify for the state pension.

However, those born on or before 5 April 1970 will not be affected by the change.

The proposal follows recommendations made by John Cridland CBE in March 2017.

Cridland’s review highlighted that by 2036/37, annual spending on the state pension would have increased by 1% of GPD on 2016/17.

To translate this into figures, this would equate to around £20 billion or a tax rise of £725 per household.

David Gauke, secretary of state for work and pensions, said:

“As life expectancy continues to rise and the number of people in receipt of state pension increases, we need to ensure we have a fair and sustainable system that is reflective of modern life and protected for future generations.

“Combined with our pension reforms that are helping more people than ever save into a private pension and reducing pensioner poverty to a near record low, these changes will give people the certainty they need to plan ahead for retirement.”

Contact us to discuss the state pension.

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Adults not saving enough on regular basis

56% of adults feel they are not saving enough of their pre-tax income each month, according to research from Aldermore.

The specialist bank polled 4,005 people and found the average person is saving just 8% – or £153 – of their monthly income, which equates to £1,832 a year. 

People on the lowest incomes were saving the most, with those earning £10,000 or less managing to stash away 15% of their earnings.  

From a regional perspective, people in London who earn a typical annual salary of £30,734 are saving on average £2,990 a year – more than any other region. 

However, those those on the lowest incomes in Northern Ireland and Wales are saving roughly the same ratio as the rest of the country.

People in Wales on an average salary of £18,865 per year save around 8% of their income (£1,429) per annum.

Simon Healy, managing director of savings at Aldermore, said:

“It’s clear many people feel they are not saving enough, particularly at a time when wages are not increasing in line with the cost of living. 

“We hope we can encourage people to make even a small change in their saving and spending habits, which can go some way to provide protection for the future.”

Talk to us about your saving strategy.

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SMEs hit with auto-enrolment fines

A total of 16,218 fines have been issued to small businesses for not complying with auto-enrolment duties in the last year.

For employers with less than 30 employees, 9,089 penalties were issued with an additional 1,143 fines handed out to employers with 31 to 250 members of staff.

Larger businesses with more than 250 staff received just 61 fines, suggesting smaller firms are more likely to ignore their auto-enrolment duties.

A Freedom of Information Act (2000) request for data from the year to March 2017 revealed:

  • businesses with less than 30 employees received an average fine of £540 for missing their duties
  • employers with 31 to 250 staff were hit with an average penalty of £990.

Darren Ryder, director of auto-enrolment at the Pensions Regulator, said:

“There are more than 500,000 employers whose duties are still to begin over the coming months. 

“I would urge each of them to check they know what they need to do and when they need to do it so they can seek our help if they need it.”

The deadline to complete your auto-enrolment duties is 5 months before your staging date, therefore it is a legal requirement to meet your responsibilities on time to avoid any penalties.

Contact us about your auto-enrolment responsibilities.