Check what financial help you can get from HMRC is somewhat oddly titled as HMRC’s role is to administer tax and certain benefits rather than to provide “financial help”. Nonetheless, the checklist will be useful to many taxpayers, particularly those not represented by an agent.
The items highlighted by HMRC are:
- Child benefit - ICAEW’s Tax Faculty points out that the list does not mention the high-income child benefit tax charge (HICBC) or explain that, in certain circumstances, even if there is a liability to HICBC, it may be beneficial to claim child benefit but elect not to receive it, in order to obtain national insurance credits and for the child to receive a national insurance number automatically at the age of 16.
- Tax free childcare - Low take-up of this benefit may in part be attributable to the name which suggests that what is on offer is tax relief. Tax free childcare is in fact a state benefit which is available to many parents and can be used to cover care after school and during school holidays as well as regular childminders, nurseries, and nannies.
- Tax relief on employment expenses -HMRC’s guidance and online service for claiming tax relief on employment expenses has improved considerably. It should be the first port of call for taxpayers before they consider using a third-party claims company that is likely to charge a considerable fee or even require a deed of assignment.
- Transferrable marriage allowance - This allowance continues to go unclaimed by many who are entitled to it. Entitlement can be sensitive to relatively small changes in circumstances which result in an increase or decrease in income. The faculty recommends that entitlement should be reviewed periodically.
- Help to save - The Tax Faculty notes that it is not surprising if there is limited interest in Help to Save, which is available to those claiming universal credit or working tax credits as it is unlikely that they will have spare funds to save.
- Payment of tax in instalments - Taxpayers often don’t realise that HMRC is generally very amenable to payment of tax in instalments. The faculty advises that, where possible, it is always best to speak to HMRC at an early stage to set up a time to pay arrangement.
If HMRC expands the page in the future, the Tax Faculty suggests the following items be considered.
- Check your tax codes and ensure that HMRC has based them on up-to-date information.
- File 2021/22 self assessment income tax returns as soon as possible so that the second payment on account due on 31 July 2022 is based on the actual liability rather than estimated figures. Early filing also opens up the possibility of using a budget payment plan or having the tax collected through a coding adjustment in 2023/24 (if less than £3,000 due).
- Claim blind person’s allowance.
- Claim higher rate relief on personal pension contributions.
- Claim higher rate relief on gift aided contributions to charity (warning: taxpayers must pay sufficient tax to cover basic rate relief claimed by the charity).
- Check that national insurance contributions records are correct to ensure that entitlement to state benefits including state retirement pension is accruing as it should. Consider whether any national insurance credits are available to fill any gaps in the record.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
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