Archive for the ‘Tax’ Category
A long time ago, child tax credit actually used to be a tax credit so for most people the amounts paid were automatically adjusted in line with their pay. Then Gordon Brown stepped in, renamed it and changed how it worked so that it became a benefit payment instead but still with a “tax credit” name.
So now, as with all benefit payments, you have to declare the amount of your income and they pay the child tax credit for this year in line with your income for last year. Snag is that you have to declare the income for tax credit purposes months before you need to declare it for tax purposes and if there’s any significant discrepancy, as we found out, the compliance department stop your payments. Except in our case, there wasn’t a discrepancy, it was just that we hadn’t completed our tax return before putting in the tax credit renewal.
Anyway, months later, when we put in the tax return, waited ’til it went to the tax credit people, called them to remind them, the back payment of several thousand pounds turned up and the regular payments restarted. Mind you, it had gone through six or seven people in the tax credit offices to get to that point.
However, several months after that, we received another missive from yet another person in the compliance department who’d just started working for the department a matter of weeks earlier and announced that the thousands of pounds we’d been paid had been paid incorrectly and we need to pay it all back. We, of course, appealed that or rather put the appeal in as they seem not to have bothered about it and now they’re looking for the money back. Well, assuming that a rather inexperienced clerk is correct and the six or seven much more experienced people are wrong.
Helpfully, all the local tax enquiry offices were closed down on June 30th and, as the remnant of the reception said, lots of people have found that it’s pretty much impossible to get through to the telephone enquiry services.Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.
Since the economy has taken something of a dive there are a lot more people around these days who are overpaying on their taxes, typically this can happen if your income this year is a lot less than last year but there are a variety of other reasons why you can end up with a tax bill that’s lots more than you were expecting.
Sometimes the biggest surprise is in terms of back taxes. Although you’d think that these can’t be much, it’s surprising just how large a bill you can get from this quarter. For instance, often seemingly small omissions can amount to quite serious amounts of cash owed if they’re over a number of years. This tax debt can even reach such levels that you need to look into the options of paying it off in installments which at least could reduce the payments to more manageable amounts.
On the other side of the coin people can also find that there are quite substantial tax reliefs which they’ve not claimed. You might think that if you’ve an accountant that this just can’t happen to you but, in most cases, the accountant doesn’t get out to actually see what you’re getting up to and you could be pleasantly surprised if they’ve completely overlooked an ongoing tax relief. Just as in the case of underpayments, missing out on relatively small amounts of tax relief can add up to a sizeable chunk of cash when counted over a few years.
Whether it’s over or under payments that affect you, it’s best to do something about them rather than taking the head in the sand approach that many people adopt when thinking about taxes.Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.