On 19 April, a government-backed mortgage scheme to help people with 5% deposits get on to the housing ladder was made available to lenders.

First announced at the 2021 Budget, the scheme will help first-time buyers or current homeowners secure a mortgage with just a 5% deposit to buy a house worth up to £600,000. The government says this will provide ‘an affordable route to homeownership for aspiring homeowners’.

The government will offer lenders the guarantee they need to provide mortgages that cover the other 95%, subject to the usual affordability checks.

The scheme is now available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest having launched mortgages under the scheme and Virgin Money following shortly.

Miguel Sard, Managing Director of Home Buying and Ownership at NatWest, said:

‘We welcome the government’s new mortgage guarantee scheme to give further support to those with smaller deposits. For those customers, particularly younger or first-time buyers, saving up for a big deposit can often be difficult, and we know people in these groups are some of the hardest hit by the effects of the pandemic.

‘A government-backed scheme will help segments of the market for whom homeownership has felt far out of reach in recent months.’

Internet link: GOV.UK

Employees who are working from home will need to make new claims for tax relief for the 2021/22 tax year, HMRC has stated.

From 6 April 2020, employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home.

Employees who have not received the working from home expenses payment direct from their employer can apply to receive the tax relief from HMRC.

HMRC has also confirmed that the £6 per week payment is available in full, even if an employee splits their time between home and the office.

The allowance is to cover tax-deductible additional costs that employees who are required to work from home have incurred, such as heating and lighting the workroom, and business telephone calls.

Last year an online portal was launched that allows employees to claim tax relief for working at home. The portal was set up to process tax relief on additional expenses for employed workers who have been told to work from home by their employer during the coronavirus (COVID-19) pandemic.

Internet link: GOV.UK

The fourth Self-Employed Income Support Scheme (SEISS) grant is now live and HMRC has set out the penalties for abuse of the scheme.

An overclaimed SEISS grant includes any amount of grant which the self-employed individual was not entitled to receive or was more than the amount HMRC said the applicant was entitled to when the claim was made.

Overpayments must be notified to HMRC within 90 days of receipt of an SEISS grant.

When deciding the amount of any penalty, HMRC will take account whether the taxpayer knew they were entitled to the SEISS grant when they received it and when it became repayable or chargeable to tax because the individual’s circumstances changed.

The HMRC guidance states: ‘If you knew you were not entitled to your grant and did not tell us in the notification period, the law treats your failure as deliberate and concealed. This means we can charge a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive or keep.

‘If you did not know you were not entitled to your grant when you received it, we will only charge you a penalty if you have not repaid the grant by 31 January 2022.’

If you would like further advice or require a compliance review on your eligibility, please contact us.

Internet link: GOV.UK publications

Losses from pension fraud rose to £1.8 million in the first three months of this year, according to figures from Action Fraud.

107 reports of pension fraud were made in the first quarter of 2021, an increase of almost 45% when compared to the same period in 2020.

Pension scams often include free pension reviews, ‘too good to be true’ investment opportunities and offers to help release money from your pension, even for under 55s, which is not permitted under the pension freedom rules.

Pauline Smith, Head of Action Fraud, said:

‘Criminals are malicious and unapologetic when it comes to committing pension fraud. They are motivated by their own financial gain and lack any kind of empathy for their victims, who can often lose their whole life savings to these scams.

‘We know pension fraud can have a devastating impact, both financially and emotionally, but any one of us can fall victim to a fraud and it’s nothing to feel ashamed or embarrassed about. It’s incredibly important that instances of pension fraud and attempted scams are reported to Action Fraud.

‘Every report helps police get that bit closer to the people committing these awful crimes. Reporting to Action Fraud also allows our specialist victim support advocates to provide people with important protection advice and signpost them to local support services.’

Internet link: Action Fraud website

On 21 April, the online service for applications for the fourth Self-employment Income Support Scheme (SEISS) grant was opened for claims, HMRC confirmed.

All applications must be submitted by the individual self-employed worker and cannot be handled by accountants or tax advisers.

The fourth grant will be 80% of three months’ average trading profits, to be claimed from late April 2021.

Payment will be in a single instalment capped at £7,500 in total and will cover the period 1 February to 30 April 2021. The scheme has been extended to those who filed a 2019/20 self-assessment tax return prior to 3 March 2021.

Claimants must have been impacted by reduced activity, capacity and demand, or have been trading previously and are temporarily unable to do so. All claims must be made on or before 1 June 2021.

There is no requirement for an earlier SEISS grant to have been claimed to be able to claim the fourth grant.

The fifth SEISS grant will cover the period from 1 May to 30 September 2021 and will be available from July.

It will be set at 80% of three months’ average trading profits, paid out in a single instalment, capped at £7,500, for those with a turnover reduction of 30% or more.

Alternately, it will be worth 30% of three months’ average trading profits, capped at £2,850 for those with a turnover reduction of less than 30%.

Further details of the fifth grant will be provided in due course.

Internet link: GOV.UK