Tax Credits: Why So Complex? discussion
It's misleading, it's a misnomer, but don't miss out.
Millions are eligible for tax credit, yet having just interrogated the system to work on our new tax credit guide (see below) in time for this Friday's 'renewal' deadline, I could almost cry at the sheer unfathomable, unnecessary complexity. These are just three of the problems...
- Tax credits aren't tax credits. The name is ugly and misleading. These aren't a credit off tax owed, they're simply a benefit paid into bank accounts to help families with children, or those on lower salaries.
- Renewal isn't renewal. The TV adverts shout "RENEWAL", implying it's only about assessing your eligibility for tax credits over the next year. This leaves those who don't plan to claim this year thinking they needn't do anything, yet the form is also to CHECK you were correctly paid over the last year. Fail to reply and you can face fines. So why call it renewal?
- Overpayments are unavoidable. Nothing creates more tax credits angst than overpayments. Getting too much money may sound good, but if not when you spend it then the govt says "pay it back." Yet overpayments happen even if you do nothing wrong, as what you're paid is an estimate based on last years earnings, so even small changes can leave you overpaid.
Yet for now as the payouts are so huge, we have to live with it, and that's the reason we've done a full guide Guides: Tax Credits, Childcare Tax Credits, Benefits Check Up
A note to forum regulars. We normally ask site users to discuss benefits policy on other boards and not here, yet the aim of official discussion threads from articles is to also get people new to the site who've read that article to see other relevant discussions and get help. To do that this thread needs to be on this board.
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