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Higher mortgage payments and COL crisis and tax

ended 09. January 2023

At 09:30 the ONS is publishing a report, entitled ‘How are changes in housing costs impacting households?’. It will focus on the fact people with fixed-rate mortgage deals coming up for renewals are facing significantly higher mortgage costs when they come to remortgage. Housing costs have also increased for those with variable rate mortgages and private renters. Few Qs:

  • Is there a worry people, after significantly higher mortgage or rental payments, won't have enough (or anything) left to put aside for their self-assessment tax bills if they are self-employed?
  • Are you already seeing signs of this? Could the housing crisis turn into a tax crisis for the Govt? Will some struggle to pay their (on-account) tax bills at the end of Jan?
  • Should the Government be more flexible when it comes to time to pay in the current climate?

1 responses from the Newspage community

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Mitul Pandya
Managing Director at Charterwells
For millions of small business owners, the squeeze on household finances is being exacerbated by the squeeze on their profits. They are seeing a sharp rise in their tax bills and, having recovered from the pandemic, their payments on account. This comes at the same time many have Covid loans to repay. There is less money in their business at the exact time many business owners have higher mortgage or rental costs, not to mention energy and food bills. It makes real fiscal sense for HMRC to consider offering small business owners more flexibility for their next payment on account. Helping household cash flow via tax flexibility may help to avoid a housing crisis and forced sales due to significantly higher mortgage and rent payments. HMRC has also increased interest on late tax payments, which will hit people's finances even harder.