The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
The tax credits legislation makes very little mention of specific anti-avoidance rules. Instead, it refers to ‘notional income’ which is income that is treated as the claimant’s income even though he did not receive it.
For example, these rules apply where claimants:
Where you advise a director of an owner-managed company in relation to tax credits, this is a key point. Clients will frequently have established for themselves that drawing minimal income from their company will enable them to increase not only tax credit claims but also give access to other Government support.
There are four different types of notional income that should be considered when looking at a claimant’s tax credit affairs:
These anti-avoidance provisions are considered below in turn.
Where a claimant is treated as being in receipt of income under any of the following income tax provisions, he is treated as having that income for tax credit purposes.
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