Overview

This bill outlines the government's contribution to Lifetime ISAs and Help-to-Save accounts. It details the rules around government bonuses, eligibility criteria, and the tax implications of these schemes, alongside mechanisms for enforcement and penalties for non-compliance.

Description

The Savings (Government Contributions) Bill introduces government bonuses for contributions made to Lifetime ISAs and Help-to-Save accounts. Specifics regarding eligible accounts, qualifying contributions, bonus amounts, and relevant periods will be set out in Treasury regulations.

Lifetime ISAs

For Lifetime ISAs, the bill establishes HMRC's responsibility for bonus payments and managing withdrawal charges. It sets out rules for claiming bonuses, including penalties for inaccurate information and procedures for recovering wrongly-paid bonuses. The bill also details the tax treatment of government contributions and the conditions under which withdrawals will incur a charge.

Help-to-Save Accounts

For Help-to-Save accounts, the bill specifies the paying authority (Treasury, HMRC, or Director of Savings) and outlines provisions for determining eligibility. Details such as the maturity period, maximum monthly contributions, and bonus calculations will be defined in Treasury regulations. The bill also addresses information sharing between HMRC and account providers, establishing penalties for non-compliance.

Regulations

The bill grants the Treasury extensive power to make regulations covering various aspects of both schemes. Many of these regulations require parliamentary approval before implementation.

Government Spending

The bill will result in increased government spending on bonuses paid into Lifetime ISAs and Help-to-Save accounts. Exact figures are not specified in the bill, but they will be determined by the number of eligible accounts and the amounts saved by individuals.

Groups Affected

• Individuals saving in Lifetime ISAs: Will receive government bonuses, but may face charges on early withdrawals.
• Individuals saving in Help-to-Save accounts: Will receive government bonuses subject to eligibility criteria and account terms.
• HMRC: Responsible for administering the bonuses, collecting charges, and enforcing compliance.
• Treasury: Responsible for setting regulations and determining the overall framework of the schemes.
• Account providers: Will be responsible for managing accounts, complying with regulations, and potentially facing penalties for non-compliance.

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