Oh no ... they're aboloshing Working Families Tax Credit! (The Inland Revenue)

Member Name: opinions4u

Product:	The Inland Revenue
Date:	08/10/02 (519 review reads)
Rating:

Advantages: You get money

Disadvantages: You have to fill in a pathetic 12 page form, You probably had an increase in your tax bill of the same amount of the value of the benefit

I received an extraordinary letter from the Inland Revenue today.

Extraordinary, in the main, for its opening paragraph. And I quote:

You may remember the Chancellor announcing in his Budget speech last April that two new tax credits will be introduced in April 2003.

Well, blow me down with a feather I do not actually remember. I can recall some muttering about changes to Working Families Tax Credit and Childrens Tax Credit. But two new ones?

Well, it seems what I thought were minor changes are in fact the replacement of the two tax credits I thought we were referring to with two new ones ?. that appear to be exactly the same!

To be fair, I do the Chancellor down. The new versions actually widen the availability of assistance through the tax credit system a little, pay the credits directly in to your bank account and remove your employer from involvement in making payments.

As a little bit of a cynic, if you used to get Married Persons Allowance and MIRAS tax relief on your mortgage, you will remember he abolished these. Well, for some he is now giving you that lost money back in the form of a state benefit (although Gordon insists it is a tax credit).

So, what happens if you are already claiming the old two tax credits? Well, they will automatically stop at the end of this tax year and your tax code will be adjusted for the worse.

You should also get a lovely form through the post from them, 12 pages long no less, that you and any partner you have need to fill in to claim one or both of the new benefits.

Now, if you are working, earning a pittance, and have to arrange care for two children, the new system will pay you £13,780 a year to help with the costs of living. A mere mortal like me who earns around the national average wage and has the temerity to pack Mrs Opinions4u off to work (arranging working patterns that ensure the kids are cared for but we never actually see each o
ther) get the grand sum of £545 a year.

In other words, whatever your circumstances, it is probably worth filling the form in and claiming what is due to you.

I do have to question the need to ask certain things on the form. Surely, the Inland Revenue know how much I earned last year? My employer told them! But, they need to know again. Every year, they send me a tax coding with my National Insurance Number, Tax Reference and value of benefits in kind. But, for the sake of tax credits, they need to know again. No wonder unemployment is so low these days. The government are employing millions of people in the Inland Revenue to process paperwork for which they already have most of the answers!! Just give me the bloody money!

I am puzzled as to the purpose of the Child Tax Credit. It is worth £10.40 a week. Why not pay it with Child Benefit? This could save massive amounts of time and effort processing needless paperwork and while those nasty rich people who earn more than £50,000 a year can also get their hands on it this way (as a tax credit they get reducing value), nappies and crisps cost the same whatever your income bracket!

The Working Tax Credit is a cleverer idea. Benefits for those making the effort to work. Rewards for doing something, rather than just staying at home to live off the state. As a concept, I applaud it. As a manager in business, I have had 2 excellent staff members transfer from full time to part time work, simply because they would be significantly better off by earning less and claiming more! The reality is, it needs to be made to work better!

Summary?

For most of us, we are only getting back what they took off us originally. For the very low earners, it is an excellent incentive to stay in work. If you earn £58,000 or less as a family, fill in the form, however irritating it is, and claim your money.

Personally, I do not want to be in receipt of tax credits or
benefits. I would simply prefer a fairer tax system to start with. I am an average earner and as such surely, this nation can ensure I do not have to be subsidised. Charge me less tax and give me no benefits!

Summary: