Pictured: Andy McQuillan
Dains, Midlands based Chartered Accountants and Business
Advisers comment on the tax credit renewal deadlines.
Now that the 31 July 2011 renewal deadline for tax credits
(Working Tax Credit and Child Tax Credit) has passed, most people
have renewed to avoid their tax credits payments being stopped.
However, in practice, if you missed the 31 July deadline, HMRC
will first of all send out a 'Statement of Account', and if you
complete the renewal within 30 days of the date of the statement,
your claim can be restored from 6 April 2011.
Andy McQuillan, Tax Partner at Dains says "If you miss this
date, the claim can still be restored if you can show 'good cause'
for missing the first deadline and renew by 31 January 2012 at the
latest.
"However, if this second date is missed, or if HMRC does not
accept that there was good cause for missing the first one, you
will drop out of the renewals process and will have to make a new
claim for 2011/12, which can only be backdated by a maximum of
three months. You will then have to repay some or all of the
provisional payments you have received between 6 April 2011 and the
date the old claim was cancelled".
As well as losing out on tax credits, failing to deal with the
renewal papers can attract a penalty of up to £300 for
failure to submit an annual declaration, plus up to £60 per
day if the failure continues after the initial penalty is imposed.
These are not automatic penalties, and will not be charged if you
had a reasonable excuse for the delay and complied as soon as that
became possible.
There is also a maximum penalty of £3,000 for fraudulently
or negligently making an incorrect statement in response to an end
of year notice. This can apply not just to an incorrect annual
declaration, but also to the failure of an auto-renewal claimant to
provide correct information when their annual review details are
wrong.
For more information on Dains, please visit their website
here: www.dains.com