Several financial lifelines are ending this week and some household bills will also increase. We explain the key money changes coming up and how they’ll affect your wallet
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From the end of furlough to the final self-employment SEISS grant, we explain six financial changes that are happening this week.
Other dates to mark in your calendar include the end of the stamp duty holiday and eviction notices returning to normal.
The energy price cap is also rising from this weekend – adding up to £153 on to the bills of struggling households.
It comes amid an energy firm crisis, with Avro Energy and Green Supplier becoming the latest suppliers to collapse in recent weeks.
Here are all the financial changes and deadlines to be aware of this week.
Furlough is ending
Furlough started being wound down from July, with the level of support from the government being tapered off from this date.
The government used to contribute 80% of pay, up to a cap of £2,500 a month, for hours not worked by furloughed staff. This then fell to 70%, up to £2,187.50, from July 1.
The support from the government then dropped again on August 1 to its current level of 60% contribution for hours not working, capped at £1,875.
Employers pay out the remaining 20% of furloughed income, plus pension and National Insurance contributions, again capped at £2,500.
The changes mean workers are still getting 80% of their pay while on furlough – it’s just the amount contributed by the government that has been reduced.
Employers have also always been able to top up wages to the 100% mark – but they don’t have to do this.
We’ve got a guide here on what to do if you’re being made redundant.
Are you worried about how these changes will affect you? Let us know: email@example.com
Final SEISS grant
The fifth and final SEISS (self-employed income support scheme) grant must be claimed by this Thursday (September 30) so there isn’t long left to claim up to £7,500.
The fifth SEISS grant is designed to cover the period of May 1 to September 30 – five calendar months – but confusingly is only worth three months’ of trading profits.
How much you get is based on your average trading profits over three months and how much your business has been affected by Covid.
If your turnover has dropped by 30% or more, you’ll be able to claim the full grant worth 80% of three months’ average trading profits, capped at £7,500.
But if your turnover has fallen by less than 30%, you’ll be able to claim a grant worth 30% of three months’ average trading profits, capped at £2,850.
We’ve got a full guide on the eligibility criteria and how to apply here.
Stamp duty holiday ends
The stamp duty holiday saw property prices surge during the Covid pandemic – but the final phase of this tax break will finish this Thursday (September 30).
Stamp duty is a tax charged when you buy a property – although it’s called “land and buildings transaction tax” in Scotland and “land transaction tax” in Wales.
Up until July this year, there was a tax break in place that meant you didn’t need to pay stamp duty on homes worth up to £500,000 in England and Northern Ireland.
This was then reduced from July 1, with no stamp duty due on the first £250,000 of any primary residential property.
But from October 1, the regular stamp duty rules will go back to normal – you currently don’t pay this tax on homes worth up to £125,000, or £300,000 if you’re a first time buyer.
Again, this applies to properties in England and Northern Ireland.
Energy price cap rising
The energy price cap is increasing from this Friday (October 1) meaning a rise in energy bills for 15million households.
Those on default tariffs paying by direct debit will see an increase of £139 from £1,138 to £1,277.
Prepayment customers will see a rise of £153 from £1,156 to £1309.
The energy price cap is the maximum amount energy suppliers will be allowed to charge customers on standard default tariffs.
It is reviewed twice a year by the energy watchdog Ofgem.
But energy customers have been facing more turmoil in recent weeks with several suppliers going bust due to the cost of rising gas prices.
Avro Energy and Green Supplier ceased trading last week, in a move affecting 835,000 homes ahead of the winter months.
The week before, Utility Point and People’s Energy confirmed they would stop trading with around 500,000 people left in limbo.
Eviction notices return to normal
Eviction notices will go back to normal from this Friday (October 1) after temporary measures were introduced to give people more time to find a new home during the Covid pandemic.
At the moment, landlords giving a Section 21 or Section 8 notice must give four months notice to tenants.
This has been the case since June this year, as before this point, the government said landlords must give six months notice.
But this will go back down to two months – the length of time that was allowed pre-Covid – from next month.
If you’re worried about being evicted, we’ve rounded up your rights and the help available here.
VAT is going up
The hospitality industry was handed a lifeline in the form of a VAT (value added tax) reduction during the Covid crisis – but this is going up from October 1.
VAT was slashed from 20% to 5% last summer for food, drink and holiday businesses.
The tax will rise to 12.5% for six months from next month, before then going back to its normal rate of 20% in April next year.
Many businesses passed on the VAT reduction to customers – meaning cheaper meals out and holidays – so you may end up paying more for these services once VAT goes up.