The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
New claims for tax credits are no longer possible as they have been replaced by the universal credit for all claimants. Existing claimants will continue to receive tax credits until they are migrated to the universal credit system. Migration will take place when a change in circumstances is reported.
See the Universal credit guidance note.
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 the claimant did not receive it.
For example, these rules apply where claimants:
deliberately get rid of income in order to claim or increase their tax credits
fail to apply for income to which they are entitled
provide a service for low rates of payment
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:
claimants treated as having income under the Income Tax Acts
claimants depriving themselves of income in order to secure entitlement
claimants having income available to them on application
claimants providing services to others for less than full earnings
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.
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Why is this important?In order to get a full basic state pension, an individual must have paid sufficient national insurance contributions (NIC) for a minimum number of qualifying years in their working life. As NIC cannot be paid in the tax year before the individual reaches the age of 16, or in a
If the taxpayer does not have sufficient information to enable them to complete the tax return in the time allowed, they should include either a best estimate or a provisional figure. The taxpayer should not either leave a box blank or enter ‘details to follow’ as HMRC will regard this as an
The married couple’s allowance (MCA) is only available if one of the two spouses or civil partners was born before 6 April 1935. This means that one member of the couple must be at least 87 years old on 5 April 2022 to qualify for an allowance in the 2021/22 tax year.There is a distinction in the
This note applies to transactions whilst the Great Britain was a member of the EU and during the transition period that ended on 31 December 2020. For information on Northern Ireland see the Northern Ireland topic. Triangulation is an EU simplification measure that was introduced in order to reduce