There are now just 10 days to go until the deadline is upon us, after the Inland Revenue extended the deadline by a day to take into account the fact that the original deadline fell on the weekend.
But John Whiting, a tax partner at PricewaterhouseCoopers, said that because the self-employed generally saw tax issues as a year-end matter they could suffer.
‘It is the hub of quite a lot of the issues concerning the new credits,’ said Whiting.
‘The uneasy alliance between tax and benefits hasn’t been sorted out. Undoubtedly people will not get claims in on time.’
Any workers on a variable income should ensure a claim is submitted, even if 99% certain they will earn more than the £58,000 threshold. Because circumstances can radically change between now and the year end, workers could lose out.
While claims can only be backdated three months, entitlements will be reassessed based on actual income to 5 April 2004.
‘The real message is that people bringing up children should consider making a claim for tax credits,’ said Mark Lee, chairman of the ICAEW tax faculty. ‘This is particularly the case for those who have variable incomes, the self-employed and anyone who believes their income levels may fall. A bad accident, illness or a bad debt suffered can never be predicted and thousands of pounds could be lost.’
This point was backed up by Whiting. ‘If in doubt, apply,’ he said. ‘If you apply and get a nil result, you won’t be penalised, and will be applicable should circumstances change. It’s a no-lose situation.’
Some of Lee’s fears are well-founded. The Professional Contractors Group, the trade association that represents the interests of freelancers, does not see it as a major concern, and is not offering any specific advice to its members.Sir Nick Montagu urged tax payers to make protective claims in an exclusive interview with Accountancy Age last month.
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