The Chancellor, Rishi Sunak delivered the government's spending plans for the coming year to Parliament on 25 November 2020. The Spending Review usually covers 3 to 4 years but given the many unknowns as a result of the pandemic the review will only cover the period from April 2021 to April 2022.

The Chancellor said his immediate priority was to protect people’s lives and livelihoods as the country continues to battle the outbreak – allocating £55 billion to tackle the virus next year.

Plans were also announced for increased infrastructure spending with £100 billion of capital spending next year and a £4 billion Levelling Up Fund. As expected, it was also announced that there will be a public sector pay freeze with an exemption for the NHS and for public sector workers who earn below the median wage of £24,000.

The Chancellor also used the Spending Review to confirm that increased National Minimum Wage and National Living Wage rates will come into effect on 1 April 2021.

From 1 April 2021 the National Living Wage will increase by 19p to £8.72. This represents an increase of 2.2%. The National Living Wage currently applies to those aged 25 and over but from next April will be extended to 23 and 24 year olds for the first time. There will also be increases to the National Minimum Wage and other wage rates for younger people. The new rates mirror the recommendations made by the Low Pay Commission which have been accepted in full by the government.

Scotland’s Finance Secretary, Kate Forbes, has announced that the Scottish Government’s Budget will be published for 2021-22 on 28 January 2021. The date has been selected in order to allow the Scottish Government time to prepare for the new tax year.

This is the second time that Scotland has held a Budget before the rest of the UK. The announcement follows the UK Government’s decision to postpone its Autumn Budget until an unspecified date in the new year.

The Finance Secretary commented that:

‘Coming amidst an unprecedented global pandemic, the forthcoming Scottish Budget will be one of the most important since devolution.

It is my task to prioritise our resources as effectively as possible to drive the country’s economic recovery from coronavirus (COVID-19) while also managing the ongoing impact of the virus.

The Chancellor’s decision to delay the UK Autumn Budget until next year causes significant difficulties for the Scottish Budget process. Although we expect to receive some funding information from the UK Spending Review on 25 November, the absence of a UK Autumn Budget means we will have to make decisions based on partial and provisional information, with no indication of potential changes to UK tax policies.

In these circumstances, and to allow us to take account of the emerging position on any EU exit deal and also the evolving situation with COVID-19, I believe it is necessary to publish the Scottish Budget 2021-22 in early 2021, rather than later this year.’

The Scottish Parliament sets the Income Tax rates and bands for non-savings and non-dividend income in Scotland. Scottish taxpayers therefore pay Income Tax at separate rates and bands to the rest of the UK on their non-savings and non-dividend income.

The government guidance for landlords and tenants as a result of the coronavirus pandemic has been updated. The Coronavirus Act 2020 provides protection to social and private tenants by delaying when landlords can start proceedings to evict tenants. 

To give tenants greater protection from eviction, landlords are required to provide tenants with 6 months’ notice period before they can start possession proceedings. This applies except in cases raising other serious issues such as those involving anti-social behaviour, domestic abuse, false statement and where a tenant has accrued rent arrears in excess of 6 months’ rent.

The stay on possession proceedings expired on 20 September 2020 and landlords can now progress their possession claim through the courts. The most egregious cases will be prioritised by the courts ensuring landlords are able to progress the most serious cases.

To protect against coronavirus transmission, bailiffs have been asked not to enforce evictions during the national restrictions in England except in the most serious circumstances. Together with pause on enforcement of evictions starting in December that has been agreed with bailiffs, this means that evictions in England will not be enforced until 11 January at the earliest, except in the most serious circumstances. 

Landlords can continue to carry out repairs and safety inspections during the English lockdown period provided this is done in line with public health advice.

The guidance is clear that tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. Tenants who are unable to do so should speak to their landlord at the earliest opportunity.

The Financial Conduct Authority (FCA) has announced new proposals to ensure that lenders provide tailored support to mortgage borrowers who continue to face payment difficulties due to the COVID-19 crisis. This follows the additional government measures announced over recent weeks to control the spread of coronavirus.

Payment holidays to support mortgage borrowers who are experiencing payment difficulties because of coronavirus will be extended. These measures were due to come to an end on 31 October 2020.

This means that:

• those who have not yet had a payment deferral will be eligible for 2 payment deferrals of up to 6 months in total
• those who currently have an initial payment deferral, will be eligible for another payment deferral of up to 3 months 
• those who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to 3 months 

Under the FCA’s proposals, borrowers would have until 31 January 2021 to request a payment deferral. A payment deferral under these proposals would not be reported as missed payments on a borrower’s credit file.

The FCA is also proposing that no one will have their home repossessed without their agreement until after 31 January 2021.

Some borrowers would not be eligible for a payment deferral because they may already have had 2 payment deferrals (of up to 6 months in total), and tailored support will be more appropriate to their circumstances. Tailored support may be reported on a borrower’s credit file, and lenders should inform borrowers where this will be the case.

The Help to Buy equity loans scheme is open to both first-time buyers and home movers on new-build homes in England with a purchase price up to £600,000. The Help to Buy equity loans provide a low-interest loan towards the deposit. The loan is interest free for the first 5 years. New home buyers need a 5% deposit, and the government lends up to 20% of the value of the home (up to 40% for London).

The deadline for the homes to have been finished in order to comply with the equity loan scheme has been extended from 31 December 2020 to 28 February 2021 to ensure home buyers do not miss out if there has been a delay in construction due to the pandemic. The deadline for the legal completion of the sale will remain the same – 31 March 2021. The completion of sale deadline may be extended further to 31 May 2021 if a reservation was in place by 30 June 2020. These changes apply to the equity loans scheme in England and not to similar schemes in Northern Ireland, Scotland or Wales.

The government’s new Help to Buy scheme, which will replace the current scheme, will come into place from 1 April 2021 and run for two years until March 2023. There are no plans for further extensions. The new scheme introduces regional property price caps and will only be available to first time buyers.

Since 18 September 2020, many designated venues in England have been required to enforce the rule of 6. The 'rule of 6' bans any social gathering of more than 6 people, except under limited circumstances such as if a single household or support bubble includes more than 6 people.

Services included within the legal requirements to enforce the rule of 6 include:

• hospitality, including pubs, bars, restaurants and cafés
• tourism and leisure, including gyms, swimming pools, hotels, museums, cinemas, zoos and theme parks 
• close contact services, including hairdressers
• facilities provided by local authorities, including town halls and civic centres (for events) and libraries

Children’s centres run by local authorities were included on the original list but were removed on 21 October 2020.

These reporting requirements mean that affected businesses and organisations are legally required to log details of customers, visitors and staff for NHS Test and Trace. Failure to enforce the rules could see businesses face fines of up to £4,000.

Businesses are also required to display the official NHS QR code posters to make it easier for people to check-in at different premises once the app is rolled out nationally. If individuals choose to check-in using the QR code poster they do not need to log in via any other route.

The rule of 6 applies in outdoor and indoor settings in England. There are further restrictions for Tier 2 (High Alert) and Tier 3 (Very High Alert) areas.

The government has announced plans to allow customers to get cashback from shops without needing to make a purchase. At the moment, cashback is only available to those who buy goods. The new proposals have been put in place to help protect the UK’s cash system following a steady decline in the use of cash. This process has accelerated significantly during the coronavirus pandemic.

Under the government proposals, cashback without a purchase could be widely available from retailers of all sizes in local communities across the UK.

Although cash use is declining, with people increasingly choosing cards, mobile and e-wallets to make payments, it remains crucial for at risk groups across the UK – including the elderly and vulnerable. Many find that cash is more accessible than digital payment methods or that it helps them to budget and manage their finances.

Current EU law makes it difficult for businesses to offer cashback when people are not paying for goods and this has been a barrier to widespread adoption. The government is now considering scrapping these rules once the transition period ends on 31 December 2020.

It is not clear what impact such a move would have on retailers who could face additional costs and administrative issues dealing with providing cashback with no clear benefit for them.

The government has also said that it is considering giving the FCA overall responsibility for maintaining a well-functioning retail cash system given its existing regulatory role and consumer protection objective.

HMRC is warning new students starting university that they could be targeted by scammers trying to steal their money and personal details. 

As new students start the academic year they can be particularly vulnerable to tax scams. Coupled with an increase in remote working due to the pandemic can leave students particularly exposed to the work of fraudsters.

Many tax scams are directly targeting university students. Fraudulent emails and texts will regularly include links which take students to websites where their information can be stolen. 

HMRC has written to universities, via Universities UK, asking them to help ensure their students know how to spot a scam and to raise awareness of this issue. These scams can offer fake tax refunds or help with claiming Covid-related financial support. HMRC has also seen frauds offering spurious support with reclaiming council tax, purporting to be from TV Licensing, the DVLA or ‘GovUK’.

Students can also be approached to act as ‘money mules’, with offers of reward to transfer funds through their own, genuine financial accounts, inadvertently laundering criminal funds.

Commenting on the warning, the Chief Executive of Universities UK, said: 

'The security and welfare of students is always a priority for universities. The message to students, at what is a particularly stressful time, is to remain vigilant and question anything that seems unusual. Any student who fears their account may have been misused is encouraged to speak to either university support services, their bank, or to the police via Action Fraud.'

On 12 October, the Prime Minister announced the introduction of a new three-tier system of local COVID-19 alert levels across England. The new system sets the levels at medium, high and very high based on local transmission rates. The legislation to write the new three-tier system into law was approved by Parliament on 13 October 2020.

The medium level which covers most of the country consists of the current national measures, which came into force on 25 September. This includes the Rule of Six, and the closure of hospitality at 10pm.

The high level is for areas with a higher level of infections and additional restrictions will apply. Most areas of England that were already subject to local restrictions have automatically moved into the high alert level. This level primarily aims to reduce household to household transmission by preventing all mixing between households or support bubbles, indoors. The Rule of Six will apply to outdoor spaces, including private gardens.

The “very high” alert level will apply where transmission rates in England are causing the greatest concern. In these areas, the government will set a baseline of prohibiting social mixing indoors and in private gardens, with the Rule of Six allowed in open public spaces like parks and beaches. Pubs and bars will also be expected to close unless they can function as a restaurant and people will be advised not to travel in or out of these areas.

Non-essential retail, schools and universities will remain open in all levels.

Scotland, Wales and Northern Ireland are also considering bringing in deeper lockdown measures as the second wave of the virus gathers pace.

Our government has introduced a three-tier system for determining the local state of COVID infection and how restrictions in each area of England are to be applied. The grades are instructive.

The three categories are:

1. Medium alert level – This will cover most of the country and will consist of the current national measures, which came into force on 25 September. It will include the Rule of Six and the closure of hospitality venues at 10pm.
2. The High alert level – This will reflect many of the current local interventions, but there will now be consistency across the country. This primarily aims to reduce household to household transmission by preventing all mixing between households or support bubbles in any indoor setting. The Rule of Six will apply in outdoor spaces, including private gardens. Most areas which are already subject to local restrictions will automatically move into the “high” alert level.
3. The Very High alert level – This will apply where transmission rates are causing the greatest concern, based on an assessment of all the available data and the local situation. This includes incidence and test positivity, including amongst older and more at-risk age groups, as well as the growth rate, hospital admissions and other factors. In these areas, the government will set a baseline of prohibiting social mixing indoors and in private gardens, with the Rule of Six allowed in open public spaces like parks and beaches. Pubs and bars must close and can only remain open where they operate as if they were a restaurant – which means serving substantial meals – like a main lunchtime or evening meal. They may only serve alcohol as part of such a meal. People will be advised not to travel in and out of these areas and avoid staying overnight in a 'Very High' area if resident elsewhere. 

What is instructive is the absence of a Low alert level.