ARE YOU GETTING ALL OF THE LOCKDOWN SUPPORT YOU NEED?
THE Government is easing the lockdown – but many will struggle financially until the economy opens up fully. So make sure you grab all the support available to you.
The deadline for claiming payment holidays expired on March 31 – but you can still get other help.
The situation can be confusing so do your research to see what you are entitled to.
Here is how the many rules stand now...
EMPLOYEES
Millions of employees working from home due to the pandemic can now claim tax relief on additional household costs in the new 2021/22 tax year. Those who did not claim last year can apply for both at the same time, through the HM Revenue and Custom micro service site at gov.uk or their tax return.
You can claim costs such as heating, metered water bills, home contents insurance, business calls or a new broadband connection, provided they were incurred as a direct result of working at home.
You can claim £6 a week deduction without providing proof of extra costs.
This is worth £62 a year for basic rate taxpayers, £125 for 40% taxpayers and £140 for 45% taxpayers. To claim more you must provide receipts or bills.
Nimesh Shah, chief executive at tax and advisory firm Blick Rothenberg, said “relaxed” rules mean people can claim this relief for the entire tax year if they work at home for just one day because of Covid rules, adding: “It’s a welcome move from HMRC.”
In last month’s Budget, Chancellor
Rishi Sunak announced extending the coronavirus Job Support Scheme to September.
Under furlough, employees will continue to receive 80% of normal wages to September 30, with employers covering 10% during July and 20% in August and September.
SELF-EMPLOYED
Sunak also extended the Self-Employment Income Support Scheme (SEISS) to provide a fourth and fifth grant to sole traders and partners in a partnership with annual profits of less than £50,000. Claims for the fourth grant, covering February to April, open later this month. It is worth up to 80% of average monthly trading profits over three months, capped at £7,500. Unlike the first three grants, the notional profit figure will take account of 2019/20 profits, so 600,000 people who filed a return in 2019/20 may claim for the first time.
But some will miss out as they failed to file their 2019-20 self-assessment return by midnight on March 2, 2021, warned Kevin Sefton from personal tax app Untied.
He added: “They face the possibility of a £100 penalty for not filing a tax return and missing out on the chance to claim SEISS.”
The fifth round will cover May to September, with applications from late July. Claim through gov.uk.
STAMP DUTY
The move to suspend stamp duty on the first £500,000 of property sales in England and Northern Ireland has been extended by three months to June 30. After that, the nil-rate band will halve to £250,000 until the end of September, then return to £125,000.
Miles Robinson, head of mortgages at broker Trussle, said buyers may already be too late to beat the June deadline with less than 80 days to go.
“The average house-buying transaction now takes 163 days,” he said.
You’ll also need to factor in the extra costs you will have to pay should your sale not complete inside the deadline.
PAYMENT HOLIDAY
The application deadline for a formal mortgage payment holiday expired on March 31, with schemes running to the end of July.
However, the Financial Conduct Authority says lenders may still provide tailored support to struggling customers.
Options could include temporarily stopping or cutting repayments or lengthening your mortgage term. But you still have to pay the money and interest.
Crucially, do not cancel regular payments without speaking to your lender, as this will show up on your credit record.
Justin Basini, chief executive of ClearScore, warned: “This could make accessing credit almost impossible for up to six years.”
Since April 1, lenders have been free to repossess properties again as a last resort, but with protection for those who are “particularly vulnerable to circumstances related to Covid”.
It is also too late to apply for a payment holiday on loans, overdrafts, credit and store cards, catalogue credit and motor finance.
Again, talk to your lender if you are struggling, pay some money rather than none at all and never cancel or cut payments without an agreement.
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Don’t forget to claim tax relief on costs you incur due to working from home
INSURANCE
If motor and home premiums are now unaffordable, your insurer could help by temporarily freezing or reducing payments, waiving admin and cancellation fees, or relaxing charges or interest on missed payments.
A payment freeze should not show up on your credit file, assuming you resume payments later. Where you paid the full premium up front, you may get a partial refund.
BENEFITS
Universal Credit, claimed by more than 5.5 million households, was upped by £20 a week in April 2020, worth £1,040 a year. This has been extended to September 30.