Tax Credits and the Credit Crunch - Protective Claims - May 2009
It can be worth while for clients to make protective claims for tax credits, even where it appears based on current income that they will not be entitled to anything.
Tax credits cannot be backdated more than three months but are calculated by reference to a whole year's income. If circumstances change late in a tax year and taxable income drops as a result, clients may miss out on tax credits which would otherwise have been due, if a protective claim is not in place.
Both the employed and self-employed may be adversely affected by the current economic downturn.
A protective claim can be made in case the worst happens. Provided the client's circumstances mean that he or she is eligible for tax credits, high income will result in a 'nil award' which can be revised if income in the award period reduces considerably.
If you would like to consider a claim please discuss this with your current contact at the office.
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