The Financial Conduct Authority (FCA) is set to introduce a new consumer duty to better protect users of financial services.
The new rules will help tackle harmful practices such as providers of financial services presenting information in a way that exploits consumers’ behavioural biases; selling products or services that are not fit for purpose; or providing poor customer support.
The FCA says it wants to ‘drive a fundamental shift in industry mindset’ by raising standards and helping firms to get products and services right in the first place.
The new rules will mean firms will have to place emphasis on supporting and empowering their clients to make good financial decisions and avoid foreseeable harm throughout the customer relationship.
Firms will be required to provide customers with information they can understand; offer products and services that are fit for purpose; and provide helpful customer service.
A consultation will be open until 15 February 2022 and the FCA?expects to confirm any final rules?by the end of July 2022.
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:
‘Making good financial decisions is vital to financial well-being and trust, but too often consumers are not given the information they need to make good decisions and are sold products or services that do not offer the benefits they might expect. We want to change that.
‘We’ve been working to set a higher standard for firms, to put more of the onus on them to act in their customers’ interests and get their products and services right.’
Internet link: FCA website
More than 440,000 small firms could be forced out of business by the late payment crisis, according to the Federation of Small Businesses (FSB).
An FSB study of more than 1,200 business owners found that close to one in three has seen late payment of invoices increase over the last three months, with a further 8% experiencing other forms of poor payment practice.
As a result, 8% of small businesses say late payments are now threatening the viability of their business. This equates to 440,000 of the estimated 5.5 million small businesses in the UK.
FSB National Chairman, Mike Cherry, said:
‘After another frustrating festive season, small firms are facing flashpoint after flashpoint. Today, it’s a fresh wave of admin for importers and exporters – in three months’ time it will be a hike to the jobs tax that is national insurance contributions, a rise in dividend taxation, business rates bills and an increase in the national living wage.
‘On top of that, operating costs are surging – many will soon be trying to strike energy deals without the clout of big corporates, or the protections afforded to consumers.’
Internet link: FSB press release
On 20 December 2021, the Welsh government outlined a Budget to ‘build a stronger, fairer and greener Wales‘.
The Welsh government unveiled a £116 million package of funding to aid with the economic recovery from the COVID-19 pandemic. This will be combined with existing permanent relief schemes that see over 85,000 properties continue to receive support. The scheme will be capped at £110,000 per business.
Many firms had been receiving 100% off their rates, which helps to pay for services provided by local government, but previous COVID-19 business rate schemes have come to an end.
A further £35 million has been set aside to freeze the non-domestic rates multiplier for 2022/23, so there will be no increase in the amount of rates businesses are paying.
Meanwhile, an additional £1.3 billion in funding will be supplied to the NHS in Wales to help provide effective, high quality and sustainable healthcare following the COVID-19 pandemic.
The Budget also tackles inequality and invests in future generations through an additional £320 million to continue a long-term programme of learning and education reform.
Welsh government Finance Minister, Rebecca Evans, said:
‘The UK government’s Spending Review did not deliver for Wales and this Budget is delivered in that context. While there are tough choices ahead, we have been able to provide funding that will allow Wales to rise to the challenges we face, grounded in the distinctively Welsh values of environmental, social and economic justice.’
Internet link: GOV.WALES
On 21 December 2021, Chancellor of the Exchequer, Rishi Sunak, unveiled a £1 billion COVID-19 fund, including cash grants of up to £6,000 per premises for each eligible firm.
Mr Sunak said the government would also help certain firms with the cost of sick pay for COVID-related absences.
The Chancellor also announced an extra £30 million to help support organisations such as theatres, orchestras and museums.
To support other businesses impacted by the Omicron wave – such as those who supply the hospitality and leisure sectors – the government is also giving a more than £100 million boost to the Additional Restrictions Grant (ARG) fund for local authorities in England.
The Chancellor said:
‘We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time.
‘So, we’re stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the Culture Recovery Fund.
‘Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to Get Boosted Now.’
Internet link: GOV.UK
HMRC has reminded self assessment taxpayers to declare any COVID-19 grant payments on their 2020/21 tax return.
According to HMRC, more than 2.7 million customers claimed at least one Self-employment Income Support Scheme (SEISS) payment up to 5 April 2021.
The tax authority says these grants are taxable and customers should declare them on their 2020/21 tax return before the deadline on 31 January 2022.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
‘We want to help customers get their tax returns right, first time. We have videos, guidance and helpsheets available online to support you with your self assessment.’
The SEISS is not the only COVID-19 support scheme that customers should declare on their tax return. Information on which support payments need to be reported to HMRC and any that do not is available on GOV.UK.
Internet link: GOV.UK