LITRG Press Release: Help to Save welcomed but watch out for withdrawal penalties
Released 13 September 2018
The Low Incomes Tax Reform Group (LITRG) has issued a press release warning about tax free bonus reductions for withdrawals from Help to Save accounts.
The Help to Save scheme gives some tax credits or Universal Credit claimants the opportunity to earn a tax-free bonus of up to 50 per cent on amounts saved under the scheme. However, the LITRG is concerned about the public’s understanding of the impact of making withdrawals from the account. In most cases, making a withdrawal will reduce the bonus payable. This is because the bonus is calculated on the account balance and not just on the amount paid in. In some cases, a withdrawal can effectively attract a penalty of up to 50 per cent of the withdrawal.
For more information, view the Press Release: Help to Save welcomed but watch out for withdrawal penalties.