fpdteam

The government has announced new plans to modernise consumer credit laws to cut costs for businesses and simplify rules for consumers. This will see major reforms to the Consumer Credit Act that regulates credit card purchases and personal loans. A consultation on the direction of reform is expected to be published by the end of the year.

As part of the reform measures, the government intends to move much of the Act from statute to sit under the Financial Conduct Authority – enabling the regulator to quickly respond to emerging developments in the consumer credit market, rather than having to amend existing legislation. 

The reforms will be designed to allow lenders to provide a wider range of finance. For example, by ensuring that lenders are able to provide credit more easily for emerging and new technologies such as electric cars. At the same time measures will be put in place to maintain high levels of consumer protection. 

The reforms will build on the recommendations of the Financial Conduct Authority’s retained provisions report (published in March 2019) and the Woolard Review (published in February 2021) – which both made recommendations for a reformed regime. Leaving the EU has also created new opportunities for regulatory reform and may see some parts of EU retained legislation being repealed or replaced.

Commenting on the reforms, the Economic Secretary to the Treasury said:

'The Consumer Credit Act has been in place for almost 50 years – and it needs to be reformed to keep pace with the modern world. We want to create a regulatory regime that fosters innovation but also maintains high levels of consumer protection. That’s why I have committed to undertake this ambitious long-term reform – and it’s exactly what I’ll deliver.'

The government has announced their intention to fundamentally reform the private rented sector marking the biggest shake up of the private rented sector in 30 years. These measures are set to include a ban on section 21 ‘no-fault’ evictions and placing a legislative duty for landlords in the private sector to meet the Decent Homes Standard to the private sector by 2030. 

Other measures announced to help tenants include: 

• Helping the most vulnerable by outlawing blanket bans on renting to families with children or those in receipt of benefits.
• For the first time, ending the use of arbitrary rent review clauses, restricting tribunals from unduly increasing rent and enabling tenants to be repaid rent for non-decent homes. This will make sure tenants can take their landlord to court to seek repayment of rent if their homes are of unacceptable standard.
• Making it easier for tenants to have much-loved pets in their homes by giving all tenants the right to request a pet in their house, which the landlord must consider and cannot unreasonably refuse.
• All tenants to be moved onto a single system of periodic tenancies, meaning they can leave inferior quality housing without remaining liable for the rent or move more easily when their circumstances change. A tenancy will only end if a tenant ends or a landlord has a valid reason, defined in law.
• Doubling notice periods for rent increases and giving tenants stronger powers to challenge them if they are unjustified.
• Giving councils stronger powers to tackle the worst offenders, backed by enforcement pilots, and increasing fines for serious offences.

There will also be changes designed to benefit landlords including the introduction of a new Private Renters’ Ombudsman to enable disputes between private renters and landlords to be settled quickly, at low cost, and without going to court. There will also be measures to help tackle anti-social tenants a new property portal to help landlords to understand and comply with their responsibilities.

It is hoped that these reforms will help to ease the cost-of-living pressures renters are facing, saving families from unnecessarily moving from one privately rented home to another and thereby saving hundreds of pounds in moving costs.

There is a distinction to be drawn between tax avoidance and tax evasion. Tax evasion is illegal and describes a situation where someone acts to deliberately evade tax. This could include deliberately submitting false tax returns, falsely claiming repayments or reliefs or hiding income, gains or wealth offshore.

Tax avoidance on the other hand can describe a situation whereby a taxpayer takes advantage of the tax rules to reduce the tax they pay without breaking the law.

However, the lines between the two can get blurred as can be seen in the comments made by HMRC below. 

HMRC’s own guidance to help taxpayers spot the signs of tax avoidance, states that ‘tax avoidance involves bending the tax rules to try to gain a tax advantage that was never intended. It usually involves contrived transactions that serve no real purpose other than to artificially reduce the amount of tax that someone has to pay. It is not the same as effective tax planning but is often promoted as such'.

There is of course no restriction on taxpayers taking full advantage of tax reliefs and allowances in the legislation. This is not tax evasion [or tax avoidance in HMRC's terms] rather just paying the minimum allowable without breaking the law. Again, the lines between tax avoidance and tax planning can also get blurred. If you are approached to take part in a tax avoidance scheme, it is important to take proper professional advice and be aware that HMRC does not condone the use of schemes that they see as promoting tax avoidance.