Tax experts claim the Revenue has hardly publicised the three-month backdating rule while the warnings have prompted accountants across the country into a rush to contact their clients. Usually, accountants can backdate claims for at least two years. The deadline for applying for the new credits was 5 April but because of the backdating rule, claimants who want the full year’s credits must apply by 5 July.
Some accountants have told Accountancy Age they have approached their insurance providers who have confirmed the risk of legal action if they fail to inform clients of the credits.
Rebecca Benneyworth, a tax consultant to accountants, said there was huge concern among her clients, many of whom are now contacting clients en masse about the tax credits.
‘The concern is that accountants need to act now to make sure their clients know whether or not they are entitled to claim tax credits,’ she said.
Peter Mitchell, president of the Small Practitioners Association, accused the Revenue of being unfair over the backdating period. he said: ‘I think it’s iniquitous, because under most tax systems you get up to a minimum of two years, and sometimes six, to go back and correct what is either an allowance or income which has been incorrectly or inadvertently omitted.’
Mitchell said he was in the process of contacting clients and members of the SPA to warn them about issues around the credits.
The Revenue denied it had not done enough to publicise the tax deadline.
A spokesman said: ‘It was clearly laid out when the new tax credits bill went to parliament. We have encouraged people to apply on time and as early as possible.’
Observers believe the main problem among accountants has been the assumption that clients would take their own steps to ensure they received the new credits. However, there has in the past been much criticism of the complicated application process for the benefits.
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