Prime Minister Rishi Sunak has made his new year pledges, including halving inflation and growing the economy.

He listed his five immediate priorities when he gave his first speech of 2023, asking the public to judge him on the results.

Not surprisingly, critics are, however, suggesting that the PM’s pledges are a little vague – and even suggesting that his inflation promise is unnecessary as economists believe it has already gone as high as expected.

He hasn’t been clear on timelines for growing the economy, which his opponents feel will make it harder for the electorate to judge the success or otherwise.

The PM said: “As your Prime Minister, you need to know what my focus will be, so you can hold me to account directly for whether it is delivered.

“So I’d like to tell you my five immediate priorities.

“These are the five foundations I know can build a better, more secure, more prosperous future that this country deserves.”

PM’s top five

The undertakings included:

• Halving inflation this year to ease the cost of living and give people financial security.
• Growing the economy, creating better-paid jobs and opportunity right across the country.
• Ensuring the national debt is falling to secure the future of public services.
• Bringing NHS waiting lists down by March to enable people to get the care they need more quickly.
• Passing new laws to stop small boats, so anyone entering the country illegally will be detained and swiftly removed.

“These are five pledges to deliver peace of mind, so that you know things are getting better, that they are actually changing.

‘Hold me to account’

“That you have a government working in your interests, focused on your priorities, putting your needs first.

“And I fully expect you to hold my government and I to account on delivering those goals.”

He used the opportunity to reflect on the progress of the Government since he moved in to No 10, saying the economy has been stabilised; billions of pounds have been given out for cost-of-living support; and more money had been invested in schools, the NHS and social care.

What are your thoughts on Sunak’s pledges?

Millions of families will be starting the new year with the welcome news they will be receiving cost-of-living support.

The lowest-income households across the UK will get up to £1,350 from the Government in 2023/4 to help with rising costs across energy and food bills.

The new cost-of-living support will be paid from spring, following up to £1,200 in support for more than eight million low-income households in 2022.

Work and Pensions Secretary Mel Stride said: “We are sticking by our promise to protect the most vulnerable and these payments, worth hundreds of pounds, will provide vital support for those on the lowest incomes.

“The Government’s wider support package has already helped more than eight million families as we continue to deal with the global consequences of Putin’s illegal war and the aftershocks of the pandemic.”

Cash in the bank

The new £900 cash boost for more than eight million eligible means-tested benefits claimants, including those on Universal Credit, Pension Credit and tax credits, starts in spring and will go direct to bank accounts in three payments over the course of the financial year. There will also be a separate £150 for over six million disabled people and £300 for more than eight million pensioners on top of their Winter Fuel Payments.

Exact payment windows will be announced closer to the time, but are spread across a longer period to ensure a consistent support offering throughout the year. They will be broadly as follows:

• £300 – First cost of living payment – during spring 2023
• £150 – Disability payment – during summer 2023
• £300 – Second cost of living payment – during autumn 2023
• £300 – Pensioner payment – during winter 2023/4
• £299 – Third cost of living payment – during spring 2024

Chancellor of the Exchequer, Jeremy Hunt said: “I know these are tough times for families across the UK who are struggling to meet rising food and energy costs, driven by the aftershocks of Covid and Putin’s war in Ukraine.

“That’s why we’re putting a further £900 into the pockets of over eight million low income households. These payments are on top of above-inflation increases to working-age benefits and the Energy Price Guarantee, which is insulating millions from even higher global gas prices.

“Tackling inflation is this government’s number one priority and is the only way to ease the strain of high prices, drive long-term economic growth and improve living standards for everyone.”

No need for action

If individuals are eligible they will be paid automatically, and there will be no need to apply. Claimants who are eligible for any of the cost-of-living payments and receive tax credits, and no other means-tested benefits, will receive payment from HMRC shortly after DWP payments are issued.

The Government’s Energy Price Guarantee continues to cap energy costs, saving the average household around £900 this winter and a further £500 in 2023/24. Benefits, including working age benefits and the State Pension, will also rise in line with inflation from April 2023, ensuring they increase by over 10 per cent. April will also see the biggest ever cash rise to the National Living Wage, bringing it to £10.42 an hour, and a further year-long extension of the Household Support Fund in England and associated devolved nation funding worth £1 billion in total.

If you need any advice on your financial challenges, get in touch.

Looking to get on the property ladder this year? A government support scheme has been extended until the end of the year,

The Mortgage Guarantee Scheme, which has already helped 24,000 first-time buyers, will now run an extra 12 months, giving you more time to take advantage.

The scheme, which was launched in April 2021, supports first-time buyers to buy a home with a five per cent deposit. It is just one of the ways the Government is helping people with home ownership

Chief Secretary to the Treasury, John Glen MP said: “For hard-working families facing today’s challenging economic conditions, it’s right that we continue to help them secure their first home or move into their dream house.

“Extending this scheme means thousands more have the chance to benefit, and supports the market as we navigate through these difficult times.”

Since 2010, more than 687,000 households have been helped into home ownership through government schemes. First-time buyers often find it hard to save for a large deposit, and the mortgage guarantee has helped households overcome this barrier and secure the keys to a new home with a deposit as small as five per cent.

More help for home buyers

As well as first-time buyers and current homeowners, the scheme has also helped support the wider housing sector. Lenders reduced the availability of high LTV products during the Covid-19 pandemic, with just eight 95 per cent LTV products available in January 2021.

The Government’s Mortgage Guarantee Scheme helped restore competition and consumer choice to the market, which has benefited businesses and boosted the market.

To also support people to get onto the property ladder, the Government has increased the level where first-time buyers start paying stamp duty from £300,000 to £425,000.

Furthermore, first-time buyers will pay only five per cent on properties costing from £425,001 up to £625,000, as opposed to £500,000 previously. Both of these measures are time-limited to April 2025.

The Government has also continued to provide a range of other options to support home ownership and the wider housing sector. For example, the Help to Buy ISA and Lifetime ISA have collectively facilitated over 618,000 households get on to the property ladder.

If you’re self-employed and have been worried about the approaching 2024 deadline for transitioning to Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA), you can relax.

The Government has made the decision to phase in the mandatory use of software from April 2026, two whole years after the original date.

Victoria Atkins, Financial Secretary to the Treasury, said: “It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.”

Who is affected?

From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.

Those with an income of between £30,000 and £50,000 will need to do this from April 2027. Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.

The Government has also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold.

The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after April 2027.

HMRC’s commitment

Mandation of MTD for ITSA will not be extended to general partnerships in 2025 as previously announced. The Government remains committed to introducing MTD for ITSA to partnerships in line with its vision set out in its tax administration strategy.

“Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs. That is why we have announced a review to establish the best way to achieve this.”

Jim Harra, Chief Executive and First Permanent Secretary, HM Revenue and Customs, said: “HMRC remains committed to the delivery of Making Tax Digital as a critical part of our strategy for digitalising and modernising the tax system, but we want to make sure we get this right and deliver it effectively.

“A phased approach to mandating MTD for Income Tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring.”

How it works

The announcement relates to MTD for ITSA only. Making Tax Digital for VAT has already been implemented and is demonstrating the benefits to businesses and the tax system of digital ways of working.

Under MTD for ITSA, businesses, self-employed individuals and landlords will keep digital records, and send a quarterly summary of their business income and expenses to HMRC using MTD-compatible software. In response they will receive an estimated tax calculation based on the information provided to help them budget for their tax.

At the end of the year, they can add any non-business information and finalise their tax affairs using MTD-compatible software. This will replace the need for a Self Assessment tax return.

GOV.UK guidance on Making Tax Digital for Income Tax will be updated shortly.

If you need any support with the transition, get in touch.

1 January 2023 – Due date for Corporation Tax due for the year ended 31 March 2022.

19 January 2023 – PAYE and NIC deductions due for month ended 5 January 2023. (If you pay your tax electronically the due date is 22 January 2023).

19 January 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 January 2023.

19 January 2023 – CIS tax deducted for the month ended 5 January 2023 is payable by today.

31 January 2023 – Last day to file 2021-22 self-assessment tax returns online.

31 January 2023 – Balance of self-assessment tax owing for 2021-22 due to be settled on or before today unless you have elected to extend this deadline by formal agreement with HMRC. Also due is any first payment on account for 2022-23.

1 February 2023 – Due date for corporation tax payable for the year ended 30 April 2022.

19 February 2023 – PAYE and NIC deductions due for month ended 5 February 2023. (If you pay your tax electronically the due date is 22 February 2023)

19 February 2023 – Filing deadline for the CIS300 monthly return for the month ended 5 February 2023.

19 February 2023 – CIS tax deducted for the month ended 5 February 2023 is payable by today.