Don’t Lose Working Tax Credit to Old Accounting Method

Jul 15, 2013

I recently went to a talk about helping the self employed save money regarding tax issues. Not being a tax expert myself, I thought I’d bob along because the talk had been personally recommended, although I was ( and still am ) happy with my own accountants so shall be staying with them.


Even so, I thought I’d share the information gained and what I have learned since because it has such relevance to a group of people close to my heart and that is, as you can imagine, driving instructors – although it seems many others will be affected, too.


To cut along story short, those claiming working tax credit currently have to submit their annual accounts, either estimated or completed, by a certain date in order to make a successful claim, and correctly so imho.


By the way, eligibility for working tax credit in the first instance is down to certain criteria and I do not have the expertise to cover that here – I am more concerned about changes coming in that could affect not so much the criteria for eligibility, but rather, the submission of accounting used to continue being able to claim in the future.


So, assuming you keep your records up to date and are benefiting ( or are thinking you might do ) from Working Tax Credit, I understand that the above method of submitting your annual return will not be sufficient in order to continue in claiming.


What I understood from the meeting I attended ( and I have spoken with the tax office since – more in a moment ) is that you will have to submit your incoming and outgoing on a monthly basis to said tax office. This seems to be because the government wishes to have an absolute figure of the amount of money that is being made/lost at any given time of the day, month, year etc. This seems perfectly reasonable to me given the current economical climate – it should make for better decision making.


I’ll just mention that, as the speaker was clearly selling something, I began asking questions beyond the meeting because of the serious implications. My first step was to speak with the tax office, who did, indeed, say that changes ere afoot although, they were not certain as to the precise details. All I could glean for certain was that the larger companies would be targeted first in connection with changes and the appropriate measure made through them. Any changes to the self employed may not take place until 2015 – although I was told at the meeting it would be October 2013.


So, not being one to be left behind and having to catch up, I spoke with my own accountants to see it they had a system in place that would enable me to submit such figures if and when require to the tax office and I’m pleased to say that for an Extra £25 per year ( well, the first year is actually free ), they have set me up within their online bookkeeping service so that all my book keeping is now online and monthly run off reports are at the flick of a computer button!


Whatever the government decides now, I feel that my system is in place regardless of whether or not I may be claiming when any  change happens. Oddly enough, as well as saving me having to purchase another red book for the year, I feel I have gained another benefit in the amount of time it takes to do my books – OK, it wasn’t a massive amount of time, but it’s amazing how these little things can make a difference.


Anyway, if anyone knows different, then please contact me through Facebook where we can continue the discussion further or read about the system I’m using now – you can even sign up for a free newsletter with them.

For more more information about the new book keeping system and accountants I use to make sure any benefits should be safe, click here.

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