Capped social care costs from October 2023

The government has announced new plans to cap social care costs in England from October 2023. This change is expected to see the introduction of a new £86,000 cap on care costs across an individual’s lifetime.

There will also be the following measures of financial assistance for those without substantial assets:

  • Anyone with less than £20,000 of assets will not have to pay anything towards their care from their savings or the value of their home.
  • People with between £20,000 and £100,000 of assets will be eligible for some means-tested financial support on a sliding scale. 
  • The new upper capital limit of £100,000 is more than four times the current limit of £23,250. This means more people will be eligible for some means-tested Local Authority support.

If someone’s assets are over £100,000 then full fees must be paid. However, the maximum that a person will have to pay over their lifetime towards personal care costs will be £86,000 as a result of the new cap. If the payment of these fees means that their remaining assets fall below £100,000 then some further financial support should be available. Once the £86,000 cap is reached, Local Authorities will pay for all eligible personal care costs.

Individuals may choose to “top up” their care costs by paying the difference towards a more expensive service, but this will not count towards the cap. There is also an important exception for ‘living costs’ which could amount to additional significant costs. There will be a lot more detail on these changes to come and of course the old limits will continue for the next 2 years, and any monies paid will not be part of the new cap. 

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Breaking even – checking the numbers

In previous newsfeeds we have described how you can calculate the level of turnover you need to create in order to meet all your costs whether they be fixed costs (rent, rates etc.,) or variable costs (goods you need to buy to convert into goods you sell).

For example, if your fixed costs are £50,000 per annum and your variable costs are 25% of your turnover, the annual turnover you need to breakeven will be £200,000. The formula is:

Annual fixed costs divided by 25 (the gross profit)

Bereavement Support Payment

The amount of Bereavement Support Payment you can claim will depend on your relationship to the person who died and when you make your claim.

Your payments will be paid into your bank, building society or credit union account.

If you were married or in a registered civil partnership with the person who died

If you were receiving Child Benefit when your partner died (or did not get it but were entitled to it), you will get the higher rate.

This is made up of:

a first payment of £3,500;

Tax codes for employees

The P9X form is used to notify employers of the tax codes to use for employees. The latest version of the form has been published and shows the tax codes to use from 6 April 2023. The form states that the basic personal allowance for the tax year starting 6 April 2023 will, as expected, be £12,570 (£12,570 in 2022-23) and this means that the tax code for emergency use will remain at 1257L.

The basic rate limit will be £37,700 (£37,700 in 2022-23) except for those defined as Scottish taxpayers

Properties not let at commercial rates

There are special rules where a property is let at less than a commercial rate or isn’t let on commercial terms. These rules also apply if a property is occupied rent free or at less than a commercial rate, for example, a property is occupied by a family member at a reduced or nil rent.

In these circumstances, HMRC can take the view that unless the landlord charges a full market rent for a property and imposes normal market lease conditions, it is unlikely that the expenses of the property are

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