10 November 2017
Following an earlier period of consultation about the new Help to Save accounts scheme, HMRC have published draft legislation alongside a further technical consultation document. This sets out proposals for the main features, processes and requirements of the scheme, which is set to commence in 2018.
Help to Save will be targeted at working families on low incomes to assist them in building up their savings. The scheme will be open to around four million individuals who either receive universal credit and have minimum weekly household earnings equivalent to 16 hours at the national living wage, or who receive Working Tax Credit (WTC).
The scheme will work by providing a 50% government bonus on up to £50 of monthly savings into a Help to Save account. The bonus will be paid after two years, with savers able to continue saving for a further two years. This means that people can save up to £2,400 and benefit from total government bonuses worth up to £1,200. Along similar lines to Lifetime ISAs, bonuses on Help to Save accounts will be exempt from Income Tax.
Accounts will be available through the government’s chosen provider, National Savings and Investments (NS&I). Customers will be able to register for an account through the gov.uk portal. HMRC will carry out eligibility checks (using Tax Credits and Universal Credits data) and will pass customers through to NS&I.
The consultation ran until 27 October 2017. Responses are being reviewed and the draft regulations will be revised as appropriate before they are laid before Parliament.
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