
Jane Frost of HM Revenue and Customs (HMRC) reminds those who are self employed and claiming tax credits to tell HMRC about their total income for the previous tax year.
Introduction
Are you self employed and claiming Tax Credits? If so, you should let HMRC know your total profits for 2009/10 as soon as possible.
If you fail to provide the correct details, it could lead to an overpayment of Tax Credits. And if you supply incorrect information, it could even lead to a penalty.
Letters have already been issued urging claimants to contact HMRC as soon as they know their final income figure for the previous tax year - and no later than 31 January 2011. The amount that Tax Credits claimants receive can change as their situations change.
Estimated Income
When you renew your claim, if you are self-employed you can give HMRC an estimate of your income. Where you have provided an estimate, you will have until 31 January to inform HMRC of the actual figure.
Tell HMRC about Changes
Failure to tell HMRC promptly of any changes in your income can also result in an overpayment, which means you will have to pay back some of the money you’ve received. You could also face a penalty and, in cases of deliberate fraud, you could face criminal prosecution and imprisonment.
Tackling Fraud
As part of a wider government crackdown, HMRC and the Department of Work and Pensions (DWP) last month published a strategy designed to tackle error and fraud in benefits and credits.
As the Exchequer Secretary to the Treasury, David Gauke, said:
“There is too much error and fraud in our benefits and Tax Credit systems. These losses are unfair, unaffordable and unacceptable. Last month the Government therefore launched radical new proposals to reduce the billions lost every year.
We will now use credit reference agencies and data matching to spot patterns of fraud. We are also employing more investigators and will investigate each claim in high-fraud areas. We have to make every penny count – and that includes going after the cheats at every level. The self-employed have to do their bit by telling us promptly of any changes in their income estimates.”
More Information
For more information on Tax Credits, see Tax Credits. Help and advice is also available from the Tax Credits Helpline on 0845 300 3900.
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