Tax Credit Service

Tax credits have long been seen as a top-up for low earning families or workers, and as a result are frequently overlooked when reviewing your personal financial affairs.

In fact, tax credits can be a legitimate source of additional tax free income. They are not a refund of tax paid, and in some cases, you do not even have to pay tax to receive them.

Your entitlement can change year on year depending on your income and other circumstances, and consequently needs to be reviewed on an annual basis to ensure that you are receiving the maximum amount to which you are entitled.

HM Revenue & Customs are not obliged to inform you if you are able to make a claim, so it is down to the individual to get themselves into the tax credit system as soon as possible, if they are currently not making a claim. If you are already in the system, HM Revenue & Customs also do not need to advise you if you are not making the full use of your claim on your annual form.

Tax credits comprise two elements:

  1. Children’s tax credits
  2. Working tax credit.

YOU DO NOT NEED TO BE WORKING TO CLAIM CHILD TAX CREDITS.

IF OVER 25, YOU DO NOT NEED TO HAVE CHILDREN TO CLAIM THE WORKING TAX CREDIT.

Your annual entitlement is initially based on a number of separate issues which calculates your potential maximum credit. Your income and other circumstances are then reviewed to see if this maximum needs to be reduced.

The questions that need to be asked are as follows:

  1. Are you responsible for at least one child (up to 16) or qualifying person (up to 20)?
  2. Is the child disabled or severely disabled?
  3. Are any of the children less than one year old?
  4. Are you 16 to 24, working at least 16 hours per week, and responsible for a child?
  5. Are you aged 25 and working at least 30 hours per week?
  6. Are you aged 50 and returning to work after receiving certain benefits for at least 6 months?
  7. Are you disabled and working at least 16 hours per week?
  8. Are you a lone parent?
  9. Do you and your Partner when added together work at least 30 hours in total?
  10. Do you pay for Approved Childcare?

IF YOU ANSWER ‘YES’ TO ANY OF THE ABOVE THERE IS A CLAIM TO BE MADE.

If there is a claim your level of relevant income needs to be calculated. Your level of relevant income can be dependent upon a number of factors, some of which may not seem to be pertinent, and as a result are often overlooked. As a result, if you are already in the tax credits system, you may not be submitting the correct figures and therefore not claiming everything you are entitled to. For instance, did you know that Statutory Maternity Pay should not be classed as income on the claim form?

At Shaddick Smith LLP, we offer a comprehensive tax credit service to ensure you receive the full amount to which you are legally entitled. We also offer a full planning service to make sure that your affairs can be properly structured to maximise your tax credits claims.

If you wish to discuss the area of tax credits with us, please do not hesitate to forward your contact details via the email link taxcredits@shaddicksmith.co.uk or by phone on 01942 603318, asking for either Brian or Jo.