Tax credit renewal. Tax credit change may cause hardship'

Finance and Credit (bank) was a Ukrainian commercial bank with its head office located at Kiev. Bank Finance and Credit was established in 1990 and according to the National Bank of Ukraine ratings it belonged to the group of the major banks in Ukraine by the volume of assets. Net assets on 01.05.2010 made up 20.699 billion Ukrainian hryvnia, the Bank authorised capital made up UAH 2 billion. On 01.07.2010 Bank Finance and System includes 16 branches and 305 outlets over Ukraine. In spring 2015 the bank was put on the National Bank of Ukraine list of problem banks.[1] In August 2015 the bank registered an issue of additional securities worth slightly under 2 billion Ukrainian hryvnia.[2] On 17 December 2015 the National Bank of Ukraine withdrew the banking license of Finance and Credit and liquidated the bank.

Tax credit claimants with a household income of more than £20,000 will see any historic overpayments clawed back at a much faster rate. The UK tax authority said this would cut the time that people spent in debt. But campaigners have argued that some claimants will face "serious financial hardship".

Paying back

Entitlement to tax credits - a top-up for those on low incomes - is generally calculated by referring to a claimant's previous year's income. Sometimes, pay rises or more hours of work mean that claimants may receive too much from the tax credits top-up. This money then needs to be repaid to HM Revenue and Customs (HMRC). The amounts of overpayment can sometimes be quite high, but families may have spent the money, so find it difficult to repay. Repayments are often made by reducing subsequent tax credit awards, and it is this cut in payments that has been changed. Previously, payments were reduced by a maximum of 25% in order to pay back outstanding overpayments. Under changes newly in force, but announced in the March 2014 Budget, those who still owe money to HMRC will see their latest tax credit award cut by up to 50%, if they have a household income of more than £20,000. It is understood that HMRC want to retrieve previous overpayments quicker, so the books are settled before benefit claimants move over to the new system of Universal Credit.

'Serious hardship'

Campaigners are concerned that clawing back the money too quickly could leave some families in financial difficulty. "We fully support the need for HMRC to recover overpayment debt, but this should not be at such a rate that it has the potential to plunge people into serious financial hardship," said Anthony Thomas, chairman of the Low Incomes Tax Reform Group. "This change is likely to catch people out, as they may not be aware that their payments are about to reduce by an additional 25%. This is likely to hit those with high childcare costs or who receive extra payments due to disability even harder, as their awards will be higher." The group is calling on HMRC to protect those with high childcare costs or who receive payouts owing to disabilities to be protected from the new, faster, repayment system. A spokesman for HMRC said: "This change is simply about recovering overpayments faster and more efficiently. It will allow customers to return to full payments sooner and reduce the burden on families who previously would have repaid their debt at a slower rate. "We wrote to all affected tax credits customers to tell them about the measure in March, so that they can manage any potential change to their finances. If anyone is worried about being unable to pay their debt, they should get in touch with HMRC as early as possible, so that we can help." The government says some of those affected will benefit from higher pay, thanks to the National Living Wage, and more generous tax allowances.

Credit rating

A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting.[1] The credit rating represents an evaluation of a credit rating agency of the qualitative and quantitative information for the prospective debtor, including information provided by the prospective debtor and other non-public information obtained by the credit rating agency's analysts. A credit reporting (or credit score) – in distinction to a credit rating – is an evaluation of an individual's credit worthiness, which is done by a credit bureau or consumer credit reporting agency.

Sovereign credit ratings

The "country risk rankings" table shows the ten least-risky countries for investment as of January 2013. Ratings are further broken down into components including political risk, economic risk. Euromoney's bi-annual country risk index monitors the political and economic stability of 185 sovereign countries.[4] Results focus foremost on economics, specifically sovereign default risk or payment default risk for exporters (also known as a trade credit risk). A. M. Best defines "country risk" as the risk that country-specific factors could adversely affect an insurer's ability to meet its financial obligations

A sovereign credit rating is the credit rating of a sovereign entity, such as a national government. The sovereign credit rating indicates the risk level of the investing environment of a country and is used by investors when looking to invest in particular jurisdictions, and also takes into account political risk