Tax credits & the tax man

ja247

Hi, my friend has not declared her earnings for the last 4 years to the tax man or the tax credits!!!!!!!!!!!!!!!!!!

She has three children, she was effectivly self employed, the company would self invoice for the work she done. Her income for the first two years was about 3200. The last two years she earnt less around 1900 - 2800pounds

What does she do now to sort all this out??? If I can help sort some of this out for her then at least I can take some stress off of her.

Crumbs!, here's hoping someone can help , thanks!

Aarons_mummy

As the income is so small I don't think that there will be a huge major problem however does she recieve tax credits? What does her award notice state for income?

She has to call tax credits and get them to amend her award as necessary, I think they may see it as fraud as they will have had to sign the renewal pack each year but normally they just set up a plan to repay the overpayment.

http://www.insolvencyhelpline.co.uk/tax_debt/not_declared_your_income.php

This website seems to say that if your friend voluntarily calls IR and tells them then they will set up a plan to pay back any overpayment.

Not much help but hopefully someone will be along soon who can give you proper information.

zagfles

Were those her only earnings? If so there would no tax to pay and it wouldn't affect tax credits - although she does need to declare them.

ja247

that was her only earnings yes, many thanks for the answers, Im going over to see her now

Kalia

Many years ago I earned similar amounts and after a year or 2 of those amounts on my tax form they wrote to me and said that if I continued to earn under the personal allowance I no longer needed to submit tax returns.

She has not defrauded the tax man as she would not pay any tax on those amounts. She may be fined £100 for not telling them within 3 months that she was self-employed.

As for tax credits, they specifically ask for income so did she write £0? If so I imagine they wouldn't be pleased but assuming there is no one else earning in her household then it wouldn't change the amount of the award anyway so again she's not taken extra money. If there is someone else earning and they earned over £12k then it is fraud and she will have to repay the overpayments.