The tax credit is a payment made to parents in the UK to support taking care of their children.
These are only paid by revenue to qualifying parents in Uk.
The tax credit can either be a child tax credit or working tax credit
The amount paid to an individual depends on how much they earn, the number of children, the hours worked or the income of partners if they do have one.
How income is assessed for employees’ tax credit.
The income used in assessment is the income from their P60 is taxpayer when taxpayers are employed.
The employed individual will just need to confirm that the amount on their returns is correct.
If they don’t confirm this, HMRC will use the amount they have received from the payroll.
How income is assessed for self-employed.
For self-employed individuals, they expect to provide income received from a business.
This most likely would be estimated if their returns have not been prepared or submitted.
Therefore, there is a risk of overpayment or underpayment of payment received from the revenue.
Our team of Northampton accountant’s advice usually is, therefore, to ensure that returns are prepared on time to have actual income received in 2018/19.
WHAT TO DO IF ESTIMATED FIGURES ARE GIVEN TO HMRC?
The taxpayer should submit their return as soon as possible.
If there is a difference between the estimated and actual figures, they will need to update HMRC.
When there is a change in circumstances of the taxpayer.
When this happens, they would need to inform HMRC immediately.
Such a change in circumstance such as new baby, new partner, separation from partners, increase in income.
your self-assessment returns are prepared and submitted to know your actual income for 2018/19
How to submit your return
You can file it online:
To do this you will have to open a government gateway account if you don’t have one you will need to open one.
The taxpayer will also need to identify themselves whilst registering.
They will either have their P60, payslip, passport, national insurance, etc.
This is the fastest method of submitting tax credit returns.
It can also be submitted by calling HMRC tax credit:
you can contact HMRC on the phone to submit your returns
You submit by post:
Tax credit renewal forms are usually automatically sent to taxpayers, this can be filled and sent back to HMRC.
To use this method, you will need to have posted it on time.
If the tax credit is not submitted on time, the tax credit payment could be stopped.
If you would like more tax advice, you can contact us