Improved guidance from both HMRC and the DWP; A wide-ranging review of legislation and practice to achieve consistency in the definition and treatment of couples for different tax and benefit purposes; The extension of bereavement support to parents who lose a de facto spouse.
Anthony Thomas, LITRG Chairman, said:
“Society has changed dramatically over the last few decades. There are now many couples who are not married (nor in a civil partnership), but whose relationships are equally committed. Unfortunately our tax and benefits systems have struggled to keep up with this change. Couples are faced with a high degree of complexity in the tax system. Take, for example, the case of a married couple recently separated. There are separate rules that apply to them for eligibility for the new marriage allowance; how long they can continue to transfer assets between them free of capital gains tax and how long transfers between them are exempt from inheritance tax. It may also be difficult for them to “prove” a date of separation to determine when they could make separate claims for tax credits. Complexity can lead to mistakes on claims forms and this can have devastating financial consequences. Although two individuals may be clear as to whether or not they are a couple, the authorities may not agree with them and may decide to investigate their status, a compliance nightmare which is exacerbated by the inadequacy of official information accessible to ordinary taxpayers. We believe it is possible to have some formal ‘registration’ process with HMRC and the DWP to make an official declaration that a couple has been formed (or separated) to provide some certainty for couples who have made a clear decision to enter into (or separate from) a committed relationship with each other, without forming a marriage or civil partnership. [To be clear, our proposed ‘registration’ process for a couple to declare their status is based on a couple declaring their status for the purposes of the law as it currently stands, rather than for, say, an unmarried couple to be treated as if they were married.] We highlight bereavement support as an area of real concern. The non-availability of bereavement support for unmarried or non-civil partner couples on the death of their partner is deeply unfair, affecting, as it does, the children of the couple who have no control over their parents’ marital status. This should be rectified by extending the benefit to those parents who lose a de facto spouse.
The tax position for couples is already confusing and disjointed; on future changes in legislation, we recommend that the Government remains conscious of avoiding further complexity.”
LITRG report ‘ Couples in the tax and related welfare systems – a call for greater clarity ’.
Tax credits - help your employees renew without delay 22 May 2015
Almost six million customers will renew their tax credits claim this year, so HMRC is asking employers to encourage their staff to renew their tax credits claim accurately, and online, as soon as possible. Tax credits helplines get very busy in June and July, the lead up to the 31 July deadline and if a tax credits claimant renews their claim after this deadline, they risk their payments stopping. From April, HMRC started issuing renewals packs to almost six million tax credits customers. Last year, 14 per cent of customers, which equates to almost half a million people, lost their tax credits payments because they didn’t renew on time. Although a number of those customers went on to renew their claim after the deadline, it was too late for some to avoid a break in their tax credits payments. As well as suffering financially whilst waiting for their payments to be restored, some people were paid too much money which they have to pay back. To help customers beat the rush, HMRC have updated the online service which was introduced last year. Customers can complete their renewal and report changes in their circumstances securely, online, at any time of day. Renewing online gives customers the control of entering their online information securely, at a time that suits them, and they can make sure their details are recorded correctly. HMRC understand it’s important their customers know when their renewal has been received, so if a customer renews online, or sends in a new claim, HMRC will send them a text message to confirm they’ve received it, giving them peace of mind.
How can you help?
If you want to help make sure your employees renew early and receive the correct tax credits, there are some simple things you can do:
CIPP Policy News Journal
25/04/2016, Page 100 of 453
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