This week the Chancellor of the Exchequer, Rishi Sunak, has set out the government’s plans to help people with the cost of living. The plans bring together measures to provide support for those on the lowest incomes whilst raising tax revenue from the additional profits made by the oil and gas sector.
Key measures the Chancellor announced on Thursday include:
- a one-off non-taxable Cost of Living Payment of £650, made in two instalments, from the Department for Work and Pensions (and HMRC for Tax Credits customers), to provide additional support to more than 8 million people in receipt of income-related benefits. The DWP will make a separate additional payment of £150 in September to claimants of certain disability benefits. On top of this, pensioner households will receive a one-off £300 Pensioner Cost of Living Payment to help them stay warm this winter
- a temporary Energy Profits Levy surcharge of 25% on the extraordinary profits the oil and gas sector is making. The levy will include a new 'super-deduction' style relief to encourage firms to invest in oil and gas extraction in the UK
- a doubling of support to £400 for household energy bills through an expansion of the Energy Bills Support Scheme. The full £400 payment will now be made as a grant, which will not be recovered through higher bills in future years and is due to be paid in October.