The Low Incomes Tax Reforms Group (LITRG) have recently issued a warning about tax credit changes.
As from 6 April 2012, HMRC will stop working tax credit (WTC) for most couples with children who do not work at least 24 hours a week between them. This includes some who will still be entitled to tax credits from 6 April, because they are covered by one of the exceptions to this rule.
LITRG note that HMRC have failed to tell these claimants that they must contact them by 6 April if one of those exceptions applies to them.
As from 6 April 2012, HMRC will stop working tax credit (WTC) for most couples with children who do not work at least 24 hours a week between them. This includes some who will still be entitled to tax credits from 6 April, because they are covered by one of the exceptions to this rule.
LITRG note that HMRC have failed to tell these claimants that they must contact them by 6 April if one of those exceptions applies to them.
Under the current rules, a couple with children qualify for WTC if one person works at least 16 hours a week. As from 6 April, couples with children will be required to work at least 24 hours between them, with one person working at least 16 hours a week in order to continue to qualify for WTC.
However, there are a number of exceptions to this new requirement. Anyone who qualifies for WTC in another way should continue to receive WTC by working at least 16 hours a week from April 2012. This applies to people who:
- are aged 60 or over, or
- qualify for the disability element of WTC.
- incapacitated (meaning they are in receipt of certain benefits due to ill health),
- an inpatient in hospital,
- in prison, or
- entitled to carer’s allowance.
The letter (TC 1139) fully explained the change for couples, and listed all the exceptions to the new requirement that were known at that time.
However, HMRC left one rather important piece of information off from that letter; namely that for tax credits to continue from 6 April, claimants covered by one of the exceptions must contact HMRC.
Failure to contact HMRC will result in WTC payments being stopped as from 6 April.
LITRG note that HMRC have a duty under their Charter to ‘help and support you get things right’. This includes providing information that helps claimants understand what they have to do and when they have to do it.
In LITRG's view HMRC have failed to do that in this instance, and as a result some of the lowest paid most vulnerable claimants may miss out on payments.
Tax does have to be taxing.
UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.
Quote ID code "ABC" when contacting a QROPS specialist.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
What is TAXWISE?
TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
To find out more, please use this link Taxwise
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Click the link to read about: Tax Investigation for Dummies
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"
I'm not sure what the issue is on this one to be honest. The letters were sent out telling people of the changes and exceptions, if we have details then the claim will be fine if we don't it will stop. NTC claimants are constantly told to inform HMRC of any changes, if HMRC haven't been informed then there's not a lot that can be done.
ReplyDeleteBad tax man you have stopped my claim because I failed to inform you of a change which means I am entitled ...
The point is more families are going to be worse off with the changes it is not easy for employer's to give people another 8 hours work so those who work 16 hrs pw now will lose their tax credits. It is good to see the back of this badly thought out benefit HMRC should never have administered it in the first place their whole function is to collect monies not give it out - they are hopeless at it (even when they owe it to you) DWP should have always had this to administer from day one - lets hope the universal credit works - assuming you can find any information about it that is!
ReplyDeleteThe carets allowance rule was added long after the letters went out plus there is no way for it to be logged on NTC, had to put in a less then ideal workaround to make it work.
ReplyDelete