Many self employed people have seen a downturn in business in 2008-2009 and this may well mean that they now qualify for Working Tax Credits.
1 in 4 people due working tax credits do not claim them. A common mis-understanding is that they only apply for families with children.
Any individual or couple with or without children may be entitled. An individual earning less than £13,000 or a couple earning less than a combined £18,000 would qualify.
Take the case of Richard Gregson who runs the Village Cobbler in Sale in Cheshire. Richard was being pursued by HMRC for a large tax bill comprising unpaid taxes and payment on account for his self employment due for the 2008-2009 tax year. Having spent many months in hospital his business had dropped off dramatically. Using MrTax CD Richard discovered that not only were his payments on account wiped out but also that he was due £51 per week Working tax Credit payment. So from thinking he owed a large amount of tax , he was actually in profit – the total swing from debt to profit was over £4,000 !
However, Richard discovered that he had missed out on two years worth of Working Tax Credit payments as he had qualified the two previous years but this had not even been noticed by his accountant ! So he could have had a further £3,600 in his bank account if he had taken charge of his affairs earlier.
To see if you qualify for Working Tax Credits simply click on this link here.
Tax Fines, Penalties and keeping Good Records.
HMRC going on YouTube is another example of how the Taxman is moving away from the “fat policeman chasing the speeding Ferrari.” Nowadays the taxman no longer needs to sneak around relying on ripped off customers or jealous neighbours, nor even pose as a buyer to find tax dodging Ebay traders. His computer is omnipotent. As well as bank account information, Paypal tell him of everyone who trades annually more than £4,000, and car, van and taxi MOTs are all online so he knows how many miles you travelled compared to your claim. If it wasn’t for the Credit Crunch HMRC would be feeling pretty pleased. As it stands though, they are owed about £32 Billion and looking to write off over a third of that where companies have gone bust, so they are keenly interested in your donation.
So when your tax return does go in on time, the computer checks against last year’s return, checks your profit ratios against similar trades and if things tally, they leave you alone.
However, if your return does not go in the HMRC computer applies turbo boost. £100 Fine follows £100 fine until you get informed that you are now incurring £60 a day penalties for not bothering to buy a postage stamp. Then the HMRC spotlight beams in on you. Interest gets added and assessments flood in asking you to disprove the almighty’s figures. When you finally cave in, that might not be the end of the story.
By now the HMRC computer has placed you in intensive care. Do you want some more? A £3,000 fine for not keeping “good” records is a new one but with considerable bite. Until now, the taxman would reluctantly accept some pretty lame excuses but no longer. Accountants are already quaking in their shoes as they cannot offer you any protection- “I only processed what the customer gave me” is no excuse.
The Penalties for systematically under-paying tax are savage. Careless, deliberate and concealed acts attract penalties of 30%, 70% and 100% of the tax due respectively.
If death and taxes are the two certainties in life, doing your tax return on time and claiming every penny you are due will reveal the caring side of HMRC Customer care. They will give you time to pay for starters without a credit check and at cheaper rates than any bank. You may also qualify for Working Tax Credits even if you are single or married without children – 1 in 4 who are eligible are missing out on up to £140 per month- maybe enough to pay your tax bill and more!
October 2009
MrTax CD users now receive full instructions on how to complete their Tax Return using the HMRC on-line service. Arranged as individual slide shows, they cover every aspect of requesting, starting and completing a tax return on-line. All permutations of employment, self employmentand partnerships are covered as well as the land and property pages. Simple tax returns such as self employment can be completed in a matter of minutes.
Many self employed people have seen a downturn in business in 2008-2009 and this may well mean that they now qualify for Working Tax Credits.
HMRC going on YouTube is another example of how the Taxman is moving away from the “fat policeman chasing the speeding Ferrari.” Nowadays the taxman no longer needs to sneak around relying on ripped off customers or jealous neighbours, nor even pose as a buyer to find tax dodging Ebay traders. His computer is omnipotent. As well as bank account information, Paypal tell him of everyone who trades annually more than £4,000, and car, van and taxi MOTs are all online so he knows how many miles you travelled compared to your claim. If it wasn’t for the Credit Crunch HMRC would be feeling pretty pleased. As it stands though, they are owed about £32 Billion and looking to write off over a third of that where companies have gone bust, so they are keenly interested in your donation.