The Financial Conduct Authority (FCA) has confirmed future support for mortgage borrowers if they continue to face payment difficulties due to the coronavirus (COVID-19).

The regulator has published finalised guidance to ensure support for consumers who have taken payment deferrals and still face financial difficulties, as well as those whose financial situation may be newly affected by the pandemic after 31 October.

Under the FCA's current guidance, borrowers can take a first or second payment deferral, which does not have a negative impact on the borrower's credit file.

However, under additional guidance published, any further support from lenders can be reflected on credit files. Firms are required to be 'clear' about the credit file implications of any support offered.

According to UK Finance, lenders have granted more than two million mortgage payment deferrals since the scheme came into effect in late March.

Commenting on the changes, Eric Leenders, Managing Director of Personal Finance at UK Finance, said: 'Lenders understand that many households will continue to see their finances squeezed as the pandemic continues and will be offering a range of support for those who need it. It is essential that customers speak with their lender to discuss the best solution for them.

'Firms will be communicating with customers whose mortgage payment deferral is coming to an end to discuss the options available. Those who can afford to resume payments should do so, as it will always be in their best interests in the long run.'

HMRC has written to VAT-registered businesses that trade with the EU outlining how they should prepare for Brexit trading changes set to take effect from 2021.

The letters have been sent to VAT-registered businesses in Great Britain trading with the EU, or with the EU and the rest of the world.

From 1 January 2021, the UK will operate a full, external border with the EU. From this date, businesses will be required to submit declarations when importing and exporting goods that are categorised as 'controlled'.

The letters outline what businesses need to do to prepare for new processes for moving goods between the UK and the EU from 1 January 2021. Businesses are urged to ensure they have a UK Economic Operator Registration and Identification (EORI) number, and have been advised to decide how they will make customs declarations.

HMRC has also urged businesses to check if their imported goods are eligible for staged import controls.

Further advice on how to prepare can be found here.

The Treasury has confirmed that the minimum age for private pension withdrawals will increase from 55 to 57 in 2028.

Pension reforms made under Chancellor George Osborne meant private savers could access their savings pots before State Pension retirement age.

At the time it was intended that the age restriction should be linked to be ten years behind the State Pension age, which is currently 65 but is rising to 66 this October and to 67 between 2026 and 2028.

In a statement to Parliament, John Glen, Economic Secretary to the Treasury, said: 'In 2014 the government announced it would increase the minimum pension age to 57 from 2028, reflecting trends in longevity and encouraging individuals to remain in work, while also helping to ensure pension savings provide for later life.

'That announcement set out the timetable for this change well in advance to enable people to make financial plans, and will be legislated for in due course.'

Currently, savers can take some or all of the cash held in private pension pots at age 55, including taking 25% of their savings tax-free.

The Confederation of British Industry (CBI) has warned that the UK economy still faces a 'rocky road back to normality' despite GDP growth in July.

The UK economy grew by 6.6% in July but remains far below pre-pandemic levels, according to the latest figures from the Office for National Statistics (ONS).

Hairdressers, pubs and restaurants contributed to the economic growth after businesses were allowed to reopen in July. It is the third month in a row that the economy has expanded.

However, the ONS warned that the UK has still only recovered just over half of the lost output caused by the coronavirus (COVID-19).

Commenting on the data, Rain Newton-Smith, Chief Economist at the CBI, said: 'As more businesses were able to open their doors, the economy grew further in July. But economic growth lost some steam on the previous month, illustrating the continued uncertainty over the shape of an economic recovery ahead.

'The prospect of a second wave is restraining consumer and business confidence, and firms continue to face cashflow difficulties. With government support schemes coming to an end and renewed uncertainty over Brexit, clearly the road back to 'normal' is going to be a rocky one.'

The government's announcement of new cash grants for businesses affected by local lockdowns has been welcomed by business groups, including the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB).

Businesses in England that are required to shut because of a local lockdown will now be able to claim up to £1,500 per property every three weeks. However, both the CBI and the Association of Independent Professionals and the Self-Employed (IPSE) have warned that more targeted help is still required.

Annie Gascoyne, Director of Economic Policy at the CBI, said: 'New direct cash grants will certainly help small businesses if their area falls under new restrictions to protect public health. But the impact of COVID-19 is still hurting businesses, so the government will need to look at more targeted support in the autumn. That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September.'

Andy Chamberlain, Director of Policy at IPSE, commented: 'We welcome the fact the government is supporting businesses affected by local lockdowns. However, although this will help some self-employed people with business premises, it will leave the great majority out in the cold.'

Meanwhile, the FSB said the grants are 'much-needed additional financial lifelines' for businesses most affected by COVID-19. Mike Cherry, National Chairman of the FSB, said: 'Though a lot of firms have now been able to reopen, thousands are still impacted by local lockdowns.

'We look forward to working together with local government to make sure there is a straightforward claims process for all firms affected.' 

The Institute of Directors (IoD) has called for the government to extend emergency coronavirus (COVID-19) insolvency measures to prevent company collapses and job losses.

Directors have a duty to cease trading if their company is facing insolvency, and could face financial or legal liabilities if they seek finance instead. In June, the government introduced emergency COVID-19 legislation to suspend the threat of liability for such 'wrongful trading'.

This protection expires on 30 September. However, the IoD is warning that failure to extend the measure could lead to 'entirely preventable company collapses'. The business group is calling for the government to extend the measure until the end of 2020 to aid the economic recovery and to help safeguard jobs.

'The recovery has begun, but businesses are not out of the woods yet,' said Roger Barker, Director of Policy and Corporate Governance at the IoD.

'The government has rightly supported business survival, and emergency legislation in June was an important step. The need for this support has only intensified as we enter the next stage of the recovery. Firms trying to adjust will face steep costs and limited revenues.'

HMRC has revealed that almost £3.5 billion in Coronavirus Job Retention Scheme (CJRS) payments have been claimed fraudulently or paid out in error.

HMRC told the Public Accounts Committee (PAC) that it estimates that between 5% and 10% of CJRS funds have been provided in error. According to the PAC, in 2019 £30 billion in tax was lost as a result of taxpayer error and fraud.

HMRC said it intends to target individuals who made fraudulent CJRS claims, rather than penalise employers who made legitimate mistakes in compiling their claims.

Commenting on the issue, Jim Harra, Chief Executive of HMRC, said: 'We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between 5% and 10%. That will range from deliberate fraud through to error.

'Although we will expect employers to check their claims and repay any excess amount, what we will be focusing on is tackling abuse and fraud.'

The Federation of Small Businesses (FSB) has urged the government to provide small businesses with Brexit transition vouchers as the latest round of withdrawal talks commences.

The business group called for government Brexit negotiators to agree a small business-friendly deal 'swiftly'. It said that currently the draft terms of the EU deal don't contain a dedicated small business chapter outlining how the deal will benefit firms of all sizes.

The FSB said that the government needs to step in with 'substantial financial support' to assist with Brexit transition preparations, given that small firms have been 'flat out' managing coronavirus-linked disruption for the past six months.

Commenting on the matter, Mike Cherry, National Chairman of the FSB, said: 'The transition period will soon be at an end but the small firms that make up 99% of our business community still have no clear sense of what they'll be transitioning to.

'The economy is in a very different place today compared to the last time we were told to prepare for a no-deal outcome. Small firms don't have the time or money to get across new bureaucracy or stockpile.'

The Treasury has published a consultation on reforms to the VAT refund rules.

Under the current VAT rules, government departments, devolved administrations, the NHS and Highways England are eligible for VAT refunds under Section 41 of the VAT Act 1994.

However, unlike commercial organisations, public sector organisations do not carry out business activities and therefore cannot reclaim VAT incurred on the goods and services they purchase.

The Treasury believes that VAT could act as a barrier to using more efficient and effective means of delivering a desired policy outcome. Section 41 was introduced to remove VAT from being a factor in decision making and enables the public sector to focus on making procurement choices that reflect true value for money for the Exchequer.

The Treasury is seeking to extend the scope of Section 41 to permit full refunds of the VAT incurred on all goods and services incurred during the course of non-business activities for those organisations currently falling within the scope of the Section.

The consultation closes on 19 November 2020 and the policy paper can be found here.