Financial
Tax credits
Does a separation affect my tax status?
You are considered to be separated as soon as you both live apart. But the married couple's tax allowance was abolished on 5th April 2000 except if you were born before April 1935. Tax relief on maintenance payments has also been abolished except for those also born before April 1935. No tax is paid on maintenance payments as the Inland Revenue does not consider them as a form of income for tax purposes. The additional allowance for children is now included in the Child Tax Credit which is detailed below.
Should I still advise the Inland Revenue about the separation?
Yes, you should both agree on the date of separation for tax purposes
as this could affect your position as regards capital gains tax. It
would also affect your position regarding any joint income and you should
seek professional financial/legal advice. The Inland Revenue national
general enquiry line is open Monday to Friday 8.30am to 5.00pm Phone:
020 7667 4001 You can also find other enquiry phone numbers in your
local phone directory or on the website together with a list of frequently
asked questions.
The Inland Revenue general website is a useful resource of information.
Who can help me with tax matters?
The Inland Revenue is now considered to be much more helpful. Click
on the above link to their website or look them up in your local phone
directory. You can also get advice from an accountant or a financial
adviser. Click on the link to Financial
advisors
Important Tax Credits
9 out of 10 families with children are entitled to tax credits. But you don't need to have children to qualify. There are extra credits for lone parents and those with a disability. Help may also be available for costs with childcare. CHECK IT OUT.
The Inland Revenue is now responsible for dealing with these.
Apply for two tax credits
You can usually apply for two tax credits: Child Tax Credit and Working
Tax Credit Both are payable from April 2003. The general rule is that
to qualify for tax credits you must be aged 16 or over and usually live
in the United Kingdom but there exceptions.
Child tax credit
This is for people who are responsible for at least one child or qualifying young person.
Child Tax Credit is paid direct to the person who is mainly responsible for caring for the child or children. If you are a lone parent you will receive the payment.
Working tax credit
This is for people who are employed or self-employed (either on their own or in a partnership), who usually work 16 hours or more a week are paid for that work, and expect to work for at least 4 weeks and who are aged 16 or over and responsible for at least one child, or aged 16 or over and disabled, or aged 25 or over and usually work at least 30 hours a week
Childcare costs
As part of Working Tax Credit you may qualify for help towards the costs of childcare. If you do qualify, the total amount of help you receive will depend on your income. It can be up to a maximum of 70p for every £1 you pay out in childcare costs. There is a limit of £135 per week for one child and £200 for two or more.
To apply for the childcare element, lone parents must work 16 hours or more. If you receive the childcare element of Working Tax Credit, this will always be paid direct to the person who is mainly responsible for caring for the child or children, alongside payments of Child Tax Credit. The amount of tax credits you receive will depend on your annual income.
Do I qualify?
You can get tax credits if you are responsible for a child or if you work but have a low income. To find out if you qualify, there's a secure calculator on the Inland Revenue website.
How do I apply?
You can apply online but you will need to gather some information first.
Be careful to save the information on the form as if you are away from
the site for 20 minutes, all this will be lost. You can save the form
and come back to it later.
Apply
online or phone 0845 300 3900.
26/11/07 The online service is not currently available and we will check
on the situation for updates. If you would like to update us, please
email
us
Visit the Inland Revenue Tax Credits Home for a review of all tax credits available.
Help Desk numbers
For general tax credits help:
- In Great Britain (England, Scotland and Wales), please telephone 0845 300 3900.
- In Northern Ireland, please telephone 0845 603 2000.
- The tax credits helpline is open from 8am - 8pm seven days a week
If you require the use of a textphone, please telephone:
- 0845 300 3909 if you live in Great Britain
- 0845 607 6078 if you live in Northern Ireland
For help using the Internet Tax Credits Online service:
If you need any help using the Internet to apply for tax credits, please telephone 0845 300 3938. Please note that this service may be suspended as the system is improved.
The Online Services Tax Credits Helpdesk is open from 8am - 8pm seven days a week.
One Parent Families has excellent fact sheets on many issues including Tax Credits - Click here
Persistence
'Nothing in the world can take the place of Persistence.
Talent will not; nothing is more commonplace than unsuccessful men with talent.
Genius will not; unrewarded genius is almost a proverb.
Education alone will not; the world is full of educated derelicts.
Persistence and Determination are omnipotent.'
Calvin Coolidge
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