Tax credits for the self-employed
Self-employed tax credit claimants are reminded that they should notify HMRC of their total profits for the tax year ended 5 April 2010 as soon as possible.
Tax credits are available to more people than you might think – but only if you have registered to receive them. This can be worth doing if you are self employed and the nature of your business is such that you could end up with low taxable profits or a loss. A poor trading performance, big bad debts or high levels of capital expenditure could all contribute to such a situation.
Details of last year’s income were required on the tax credits form which should have been returned to HMRC by 31 July 2010. However, the self-employed can give HMRC an estimate of their income on this form and have until 31 January 2011 to inform HMRC of their final income figures.
This move is part of the Government’s wider crackdown on benefit and tax credit fraud. HMRC require tax credit claimants to tell HMRC promptly of changes which may result in overpayment. A failure to notify HMRC can result in claimants having to pay back the money they have received or face penalties and imprisonment in cases of deliberate fraud.