Income Support and Tax Returns

vix2000

My daughter has been in reciept of income support/child tax credit since november 2005. She is continually being hounded by inland revenue for tax returns, the last to year ending April 2007, and fines for not submitting them. Her benefits office says as far as they're aware she doesnt need to complete a return. She has telephoned the tax office continually to repeatedly explain her situation but the letters still come.

Can anyone tell me if she DOES have to submit a return?

Thanks.

rosysparkle

If they send her one, she has to complete it.

vix2000

So everyone on income support should be sending in a tax return every year?

[Deleted User]

Sounds as though you mean an annual renwal form. If she didnt complete this by 31st July she will be made to pay back anything she has received since 6th April.

vix2000

No, its definately a tax return.

[Deleted User]

vix2000 wrote: »

No, its definately a tax return.

Then it should be very simple to complete and return on time to avoid penalties,my wife had to do one every year for 7 years at one point even though we were on I/S,probably because before this she had been self employed,it did work in her favour as she always got back a cheque for the small amount of savings that had been taxed on:T

zappster1966

Income Support, Child Benefit & Tax Credits are all exempt from tax, which should make it a very easy tax return to complete.

vix2000

From the inland revenue website:-


Who needs to complete a tax return?

• self-employed people (including members of a partnership)
• company directors (except not for profit organisations)
• ministers of religion (any faith)
• people who get rent or income from land and property in the UK (but if you are an employee and this income is less than £2,500 a year a tax return may not be necessary)
• people who have other untaxed income and the tax due on it cannot be collected though a PAYE tax code
• people with taxable foreign income, even if they are not normally resident in the UK (this includes non-resident landlords)
• anyone who receives annually (or can be treated as receiving) income from a trust or settlement, or any income from the estate of a deceased person, and further tax is due on that income
• trustees and personal representatives (including people who manage the tax affairs of deceased persons)
• trustees of certain pension schemes
• names or members of Lloyd's
• employees and pensioners with more complex tax affairs - see below

Remember, if you have any income that is not taxed at source, like rents or freelance earnings, you may need to complete a tax return


It doesn't mention people on tax exempt benefits so I am confused as to why she has to do this. So if she put a zero in every box that is all they need?

Poppy9

My OH kept getting self assessment forms after he became employed. Ringing tax office gets you nowhere so I wrote in with his PAYE reference number and copy of a pay slip and they stopped. The reason they were sending them was that the self-assessment office is separate from PAYE and they don't talk to one another!!

rosysparkle

vix2000 wrote: »

It doesn't mention people on tax exempt benefits so I am confused as to why she has to do this. So if she put a zero in every box that is all they need?

Generally, people like your daughter who only have income from benefits don't have to complete a tax return, but if they are sent one then they need to fill it in and return it within the time limit. She needs to fill it in accurately (so not necessarily a zero in every box) and it may be that once the IR receive the return(s) and can see that her only income is from benefits, they won't send her any more returns.

Has she had any fines for not sending in the return? If so it's even more important that she gets the forms filled in and sent back asap, as if her tax liability is nil, then the fines will be reduced to nil as well.

As to why your daughter is being sent tax returns, it may be that the IR think she has undeclared income or savings, or think that she's been self-employed in the past. Don't worry, just get your daughter to fill in the return accurately and send it in before the deadline.

Conor_3

vix2000 wrote: »

It doesn't mention people on tax exempt benefits so I am confused as to why she has to do this. So if she put a zero in every box that is all they need?

They occassionally send them out in order to check what they have on record of they're unsure. Regardless whether or not you're in the list you quoted, if you are sent a tax return you MUST complete it within the time limit set otherwise you're liable for the fines.

So yes, she's liable as she hasn't completed it.