What does section 14 of the Savings (Government Contributions) Act 2017 cover?

Section 14 empowers the Treasury to make regulations for cases where a Help-to-Save account is opened for someone who was not actually eligible. This includes situations where ineligibility is discovered later, such as when a benefits decision is revised with backdated effect, rendering the individual ineligible from the outset.

What happens to a Help-to-Save account opened for an ineligible person?

Under Treasury regulations, the account may be treated as though it had never been a Help-to-Save account. This means any government bonus that might have been payable could be clawed back or would never become due, and the account would lose its special tax-advantaged status retrospectively. The individual retains their own savings.

How might someone be found ineligible for a Help-to-Save account after opening one?

Ineligibility may emerge through administrative errors or when a decision about entitlement to qualifying benefits such as Working Tax Credit is revised with backdated effect. For example, HMRC may determine that the individual was never entitled to the benefit at the relevant eligibility reference dates when the account was opened.

Can an individual keep their savings if their Help-to-Save account is retrospectively unwound?

Yes, the individual can still withdraw their own savings even if their account is treated as never having been a Help-to-Save account. However, they would not be entitled to any government bonus, and the account would lose its Help-to-Save status entirely, removing any associated tax-advantaged benefits.

Savings (Government Contributions) Act 2017 section 14

Accounts opened for ineligible individuals

Section 14 deals with what happens when a Help-to-Save account is opened for someone who turns out not to have been eligible, and the power of the Treasury to make regulations addressing such situations.

The Treasury may make regulations covering cases where a Help-to-Save account is opened for someone who was not actually eligible
This includes situations where ineligibility is only discovered later, following a backdated determination
The regulations may provide for the account to be treated as though it had never been a Help-to-Save account at all
The power allows the government to unwind accounts retrospectively where eligibility conditions were not met

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