General

There is a French saying “Plus ca change, plus c’est la meme chose” meaning, the more things change, the more they stay the same.

Its interesting to apply this to a change that is about to come about, if, as expected, the Labour Party form the next government from the 5^{th of} July.

The present Shadow Chancellor, Rachael Reeves, has indicated that there will be no immediate post-election budget, which means no immediate tax changes.

Both sides (Conservative and Labour) have underlined that they will not add to UK debt by increasing government spending. Instead, they have asserted they will cover any expenditure with tax funding.

But don’t hold your breath. Once the new government is safely ensconced at Downing Street who knows what may be in store for us.

One thing is certain, we may have to rethink any financial planning that we have implemented thus far if we have a Labour administration. Their longer term focus is likely to be tackling income inequalities and levelling up. We shall see…

Meantime, expect no immediate, drastic changes in economic policy. But expect movement next year as the new government becomes familiar with facts and figures. We may see evidence short-term that policy may appear to stay the same, but it’s unlikely that this will continue long-term.

The Digital Markets, Competition and Consumers Act has become law after receiving Royal Assent.

The Act paves the way to give consumers rights across the UK, with greater control and clarity over online purchases. 

It does this by requiring businesses to provide clearer information to consumers before they enter a subscription contract, remind consumers that their free trial or low-cost trial is coming to an end, and ensure consumers can easily exit a contract. 

Unavoidable hidden fees will also need to be included in the initial cost or clearly illustrated at the start of the purchasing journey. This will ensure consumers are clear from the offset about what they’re spending. 

The Digital Markets, Competition and Consumers Act will also give new tools to the Competition and Markets Authority (CMA) to address the challenges to competition in digital markets.

These tools will allow the competition regulator to set tailored ‘conduct requirements’ which require a powerful tech company to change the way it operates if it is not treating users fairly. These rules could give consumers the room to freely choose the services they use or stop companies from withholding information consumers need to make good decisions.  

The Act also gives the regulator powers to intervene and direct a firm to change its behaviour to boost competition – whether that is to benefit people using smartphones or businesses dependent on cloud services.   

The Act will also give new powers to the CMA to closely monitor road fuel prices and report any sign of malpractice to the government.

Only a handful of the most powerful global technology companies will be subject to these new rules if, following an investigation, they are deemed to hold ‘strategic market status’.

The Prime Minister, Rishi Sunak, declared from the steps of Downing Street (on 22 May 2024) that the next general election will take place on 4 July 2024. 

The Prime Minister confirmed that he had spoken with His Majesty the King to request the dissolution of parliament. The King granted this request, thereby confirming that the general election will take place on the 4 July 2024. This will be the first election to take place in July since 1945.

Following the announcement by the Prime Minister the Chief Executive of the Electoral Commission, said:

“The electoral community will now be putting all its planning into action, working to support voters and delivering well-run polls. I’m very grateful to all involved for their crucial work supporting our democracy. 

Voters need to be registered to take part in the election. Applying only takes five minutes at www.gov.uk/register-to-vote and must be done by 18 June. Voters can choose whether to vote at a polling station, by post or by proxy. 

For the first time at a UK general election, those voting at a polling station will need to show photo ID. Voters should check now if they have an accepted form of ID, and if not to apply for free ID, called the Voter Authority Certificate."

Key dates:

An economist from the Treasury explains exactly what a fall in inflation means for you.

How will lower inflation help the economy?  

Lower inflation supports people by maintaining the purchasing power of their money.  

If prices only rise slowly, people can plan their budgets more effectively – encouraging spending and investment, which fuels the economy.  

Lower inflation also helps businesses grow by providing a stable, predictable environment for them to operate in – allowing for more job opportunities or the ability to research new products and services. 

Finally, low inflation enhances the UK’s competitiveness in a global market. When the economy is stable and predictable, other countries are more interested in investing in the UK.  

This can bring in more money from foreign investors, give us better trade deals, and make the overall economy stronger. 

How will lower inflation help my business?  

If inflation is lower, it means the price of materials businesses use to produce their goods and services aren’t rising as quickly, so there is less pressure on them to pass price increases onto their customers. 

For example, a coffee shop won’t face large increases in the cost of their coffee beans, paper cups, or the energy to turn on the lights in the coffee shop.  

Because none of those things are getting drastically more expensive, they don’t have to pass those costs on to coffee for their customers.

Lower inflation provides a sense of stability for businesses, which is important to empower them to make decisions about their future. 

If inflation is high and volatile, businesses aren’t able to plan for their future spending decisions.  

For example, if you want to invest in a factory that will take a year to build, it’s important to know how much things will cost in a year’s time.  

What does inflation going down mean for my mortgage?  

Inflation influences mortgage rates indirectly, through financial market’s expectations for the Bank of England’s base interest rate.  

The base interest rate, which is also known as the Bank Rate, is the tool used by the Bank of England to bring inflation down. 

Mortgages are generally priced to reflect what the financial markets expect future interest rates to be. 

This means that if markets start to expect higher inflation, they will raise their expectations for the Bank Rate, in order to cool the economy and bring inflation back to target. This is in turn reflected in mortgage interest rates.  

If inflation falls more quickly than expected, it may lead to reductions in market expectations for the base interest rate and therefore reductions in mortgage rates offered.

The Annual Tax Summary is a document provided by HMRC that shows details of the tax you pay and how this is used by government.

The Annual Tax Summary shows:

• your taxable income from all sources that HMRC knew about at the time that it was prepared;
• the rates used to calculate your Income Tax and National Insurance contributions; and
• a breakdown of how the UK government spends your taxes – this makes government spending more transparent.

HMRC makes it clear that the tax summaries are for information purposes only and neither taxpayers nor agents should take any action based on the contents of the summary. The summaries are available online via the Government Gateway.

Taxpayers cannot access an Annual Tax Summary if they have paid no income tax or if information is outstanding. The Annual Tax Summary might also be different from other HMRC tax calculations because a taxpayer's circumstances have changed, or sources of income were not included.

Universal Credit claimants working less than half of a full-time week will have to look to increase their hours but will be able to benefit from extra work coach support. These changes will see 400,000 Universal Credit claimants receive more help to progress in work.

The changes come as the PM announces once in a generation welfare reforms to help people find work, boost their earnings, and grow the economy.

Before 2022, someone could work only nine hours a week and remain on benefits without being expected to look for more work.

The latest rise in the Administrative Earnings Threshold (AET) means someone working less than 18 hours – half of a full-time week – will have to look for more work.

These Universal Credit claimants will move into the ‘Intensive Work Search group’, meeting with their work coaches more regularly to plan their job progression, boost their earnings and advance the journey off welfare altogether.

Combined with previous increases, 400,000 claimants are now subject to more intensive Jobcentre support – and with that the expectation that those who can work must engage with the support available or face losing their benefits.

The move comes as last month the Prime Minister announced a once in a generation package of welfare reforms to help thousands more people benefit from employment, building on the Government’s £2.5 billion Back to Work Plan providing extra help to over a million people to break down barriers to work.

In a recent press release the Department for Education confirmed that parents of children from 9 months old can now apply to access government-funded childcare from September 2024, as England’s largest ever childcare expansion continues.

From 12 May 2024, eligible working parents of children who will be 9 months old by 31 August can apply to access 15 hours of funded childcare a week – set to benefit hundreds of thousands of families across the country.

This is the second step in the government’s long-term plan to support hard-working parents to balance their family and career. As the successful launch of the offer in April demonstrates, this plan is working.

Since the launch of the offer, 211,027 two-year-olds are already benefitting from government-funded places, providing parents with financial support to return to work or increase their hours and kick-starting the government’s commitment to grow the economy through affordable access to quality childcare.

Working parents whose children will be aged between 9-months and 23-months old on 31 August 2024 can apply for their government-funded childcare code via the childcare service, which they then take to their chosen childcare provider to validate. 

In this next stage, the historic rollout will deliver direct government support with childcare costs from the term after their child turns 9 months old, until they start school. By September 2025, support will increase to 30 government-funded hours a week, saving families an average of £6,900 per year.

The Ministry of Justice has published an urgent warning for anyone with unclaimed dormant funds held by the Courts Funds Office (CFO). Recent changes in legislation have changed the rules for individuals or entities with dormant funds held by the CFO.

The new rules come into effect from 1 June 2024 and mean that any account that has been held dormant within the CFO for 30 years or more will be surrendered and any future right to claim the funds will be extinguished.

Funds are classified as dormant if they have been held by CFO for an extended period, with no activity on the account, and any efforts to trace the intended beneficiary have been unsuccessful.

There is now less than 1 month left to claims funds dating back 30 years or more. Going forward, any account that subsequently reaches 30 years of dormancy will be surrendered on the date that this milestone is passed.

There is a range of reasons why CFO hold funds including, but not limited to, the following:

• damages that were awarded to children as a result of civil legal action in a county court in England, Wales, or the High Court of Justice;
• assets belonging to people who lack capacity to manage their own financial affairs and where the Court of Protection has appointed someone else to do so; and
• pending settlements of civil court action, or on behalf of dissenting shareholders, widows, and other clients.

If you think you may be affected there is an online database available at https://find-unclaimed-court-money.service.justice.gov.uk/ or you can contact the CFO directly.

New consumer protections against hacking and cyber-attacks came into force at the end of April 2024. All internet connected smart devices will be required by law to meet minimum-security standards. 

Manufacturers will be legally required to protect consumers from hackers and cyber criminals from accessing devices with internet or network connectivity – from smartphones to games consoles and connected fridges – as the UK becomes the first country in the world to introduce these laws.

Under the new regime, manufacturers will be banned from having weak, easily guessable default passwords like ‘admin’ or ‘12345’ and if there is a common password the user will be promoted to change it on start-up. This will help prevent threats like the damaging Mirai attack in 2016 which saw 300,000 smart products compromised due to weak security features and used to attack major internet platforms and services, leaving much of the US East Coast without internet. Since then, similar attacks have occurred on UK banks including Lloyds and RBS leading to disruption to customers. 

The move marks a significant step towards boosting the UK’s resilience towards cyber-crime, as recent figures show 99% of UK adults own at least one smart device and UK households own an average of nine connected devices. The new regime will also help give customers confidence in buying and using products, which will in turn help grow businesses and the economy.

An investigation conducted by Which? showed that a home filled with smart devices could be exposed to more than 12,000 hacking attacks from across the world in a single week, with a total of 2,684 attempts to guess weak default passwords on just five devices.

The Government has tabled amendments to expand the territorial extent of the Post Office Offences Bill. Convictions resulting from the Post Office Horizon scandal in Northern Ireland will now be within scope.

This blanket exoneration will automatically quash convictions brought about by the scandal, including 26 in Northern Ireland, clearing the names of many people who have had their lives ruined.

As in England and Wales, convictions in Northern Ireland will need to meet a set of criteria before they are quashed, including:

• Prosecutions brought about by the state prosecutor or the police.
• Offences carried out in connection with Post Office business between 1996 and 2018.
• Were for relevant offences such as theft, fraud and false accounting.
• Were against sub-postmasters, their employees, officers, family members or direct employees of the Post Office working in a Post Office that used the Horizon system software.

Postal Affairs Minister Kevin Hollinrake said:

” We always carefully consider the territorial extent of each piece of legislation and are rigorous in our commitment to devolution. However, it has become apparent that the Northern Ireland Executive does not have the ability to rapidly address the 26 convictions known to be within its purview.

It has become clear that postmasters in Northern Ireland could have their convictions quashed significantly later than those who were convicted in England and Wales, which would be unacceptable.

This follows the decision to introduce landmark legislation – which is making its way through parliament – to quash the convictions of hundreds of innocent sub-postmasters wrongly convicted as a result of the Horizon scandal. This will speed up the financial redress process – where we are offering a £600,000 fixed sum which can be administered quickly for those who accept it.”