UK Tax Advice

[drewchad]

Mwazir,
You can definitely lodge a claim. I think you can go back at least 6 years or so.

However processing times are quite long (which shouldn't surprise anyone on this board) depending on the tax office you will deal with. If you PM me your total income & tax deducted (not NI) I can let you know what the refund might be, this should be on your P60.

[MWazir]

Great, I will send you a PM tommorow after digging up my old payslips and tax records.

A friend also mentioned to me that bank statements and tax records should be maintained upto the precending 7 years specially the last 3 because the inland revenue may ask you to submit them if it chooses to. How far is that ture?

Many thanks, you are very kind

[goodnews]

Hi Drewchad.

I thought i read you can give tax advice on any matter.

I have all the payslip and p45, however they seems to be bit confusing to me, that is the reason i requested if you could pls calculate based on the info i provided, hence i would know that what I see on payslip is correct.

With all due respect, I dont expect exact calculation, but atleast an idea of how all this figures work. such as emplyr NI are they deducted after Holiday pay and Service charge.

When i got my p45, i was confused again, bcox it showed something else for the total pay earned in the employment and total tax in employment cumulative of all those 3 months.

I thought you would probably explain better working out that 1st month this is what should be deducted, 2nd month would be this much etc(again no hard and fast rule, any ups and downs are ok in figures).

Hope you will spare some time to explain as i am new and looking forward to learn more on this.
Many Thanks.
Rgrds

[aj77]

hI Drewchad ,
I came on HSMP Visa.I Claimed CTC and WTC in the year 2003-2004.In that application form ,there was no question reqarding immigration status.In July they approved my Claim and they are sending me CTC and WTC regularly.I informed them immidiately that I am subject to immigration control alongwith my wife.I asked them to review my case if they feel so.They said that I have been awarded CTC and WTC on the information I provided required at that time.They replied that all calls are recorded and if we d need we ll contact you.Keeping this thing in mind that my daughter was borne here in Manchester,I need your valuable comments and advice.
i)Am I entitled according to their rules or by official error as I informed them more than 5 times about my exact status?
ii)Can it affect my extension for next 3 years ?AS CTC and WTC are not in the list of Public Funds?

[John]

AJ77, stop worrying! Even if your visa has a "No recourse to Public Funds" restriction, that does not stop you claiming every sort of possible benefit from the UK Government. It only stops you being entitled to the benefits listed in paragraph 6 of the Immigration Rules.

As you quite rightly say, WTC and CTC are not listed in paragraph 6, and there is therefore absolutely no problem in you claiming them. And if those are the only benefits you have been claiming, on any visa extension application form, if there is a question like "Any you claiming any Public Funds?", the answer would truthfully be no.

There are many many sorts of UK "benefits" from the UK Government not within the definition of Public Funds. There is no problem sending children to state schools, and anyone ordinarily resident in the UK is entitled to use the NHS. Benefits? Things like Maternity Allowance are certainly claimable.

[gunjans]

Hi John,

There is no problem sending children to state schools, and anyone ordinarily resident in the UK is entitled to use the NHS. Benefits? Things like Maternity Allowance are certainly claimable.

Can u plz tell more abt Maternity Benifits/Allowance.... like what r these benifits, what we get, how to get, how to claim.

Also,

There are many many sorts of UK "benefits" from the UK Government

wat all kinda benifits/claims some body on HSMP can get.... is there any relevent website.

I'll be really greatfull if somebd can provide this kind of information.

TIA,
Gunjan.

[hk_007]

As you quite rightly say, WTC and CTC are not listed in paragraph 6, and there is therefore absolutely no problem in you claiming them. And if those are the only benefits you have been claiming, on any visa extension application form, if there is a question like "Any you claiming any Public Funds?", the answer would truthfully be no.

For extension of HSMP visa, you will have to fill form FLR(IED). According to the guidance/instructions given in this form, WTC and CTC (which has replaced Working Families' Tax Credit, Disabled Person's Tax Credit and the Children's Tax Credit since April 2003) are a part of public funds for immgration purposes. Hence, truthfull answer must be 'Yes' - otherwise you will be making a false declaration.

But we have gone through this in much detail when aj77 first posed this question some time ago. Sorry to see aj77 that you still have not found a suitable answer. But do tell us how you case proceeds.

[John]

HK_007, IND has not changed the definition of Public Funds in paragraph 6 of the Immigration Rules. As and when they do make that change, I would agree with you, but in the absence of WTC and CTC being included in the definition of Public Funds, I totally disagree that the right answer would be "Yes".

Of course Child Benefit is included in the definition of Public Funds and if that has been claimed then of course the answer would need to be "Yes".

[John]

Gunjans, here is a link :-

Maternity Allowance

That includes links to other pages about other benefits. Do take care and check the name of that benefit against the paragraph 6 definition of "Public Funds", if visa includes a "No recourse to Public Funds" restriction.

[John]

On further reflection about tax credits and the definition of Public Funds, I think that IND have deliberately not included tax credits within the definition.

Why? Because of :-

The Tax Credits (Immigration) Regulations 2003

-: which stops some people who are subject to immigration control from claiming tax credits, but not all.

Anyone who is subject to immigration control and is thinking of claiming tax credits might like to read those regulations to see if they are within one of the exceptions.

[shoegazer]

once the tax year is finished you are able to submit a tax rebate claim if you have been overtaxed, this will generally be the case when you first arrive as you will normally not work a full tax year. It is generally only the tax you can get back any overpaid NI will disappear.

Is there a time limit for when you can claim back any overtaxation? I came into employment in June of 2003, any chance I can still claim back my April/May 2003 tax (assuming I was taxed on a 12month basis)?

[John]

The time limit for claiming a repayment is nearly six years after the end of the tax year concerned. Actually it is 5 years, 9 months and 26 days after the end of the tax year. Or in other words, the 31st January ..... over 5 years but less than 6 years ... after the end of the tax year concerned.

Accordingly you are well in time to still submit a repayment claim.

[aj77]

Thank You John and other members for sharing their views.Other interesting thing is that,that I registered myself in the TAX Credits online Form provided by inland Revenue.When I open that form it has been updated that I have been subject to immigration control and same in my partners details.i.e in a question ;Are you subject to immigration control? yes has been written in my details and my partners details.In other words they updated my Account details and they know that we both are subject to immigration control.Even then they didn t bother to contact me .Idon t know when they will contact and what their reply will be.But anyhow it in their knowledge that we both are subject to immigration control and we have been awarded CTC and WTC.

One thing is sure that it s not a fraud as I informed them in the month of July ,just after receveing those Awards .But accepting it their own fault can they cancel and ask me to refund money even after awarding these Tax Credits?.What s the legal position according to law ?Any Tax expert s advice ?

[John]

AJ77, in the message I posted today at 2.14.pm (UK time) I gave a link to some regulations. Those regulations are rather detailed but it is clear that whilst some people "subject to immigration control" are not allowed to claim tax credits, some are.

Have you looked through those regulations and got any idea whether you qualify or not?

And can I ask, from what country do you and your wife come from? I ask because both Case 4 and Case 5 in those regulations include the words "a national of a state which ...... " .... and indeed if you and/or your wife is a national of such a country then that might explain why your tax credits claim was allowed.

[MWazir]

Tax Basics:
Most individuals work in the UK as employees and have Income Tax and National Insurance deducted at source on a progressive scale as follows:

Income tax:
£0 - £4,745 = 0%
£4,746 - £6,766 = 10%
£6,767 - £36,415 = 22%
above £36,415 is taxed at 40%

On top of Income Tax, National Insurance (Class 1) is deducted as follows:
£0 - £4,745 = 0%
£4,746 - £36,415 = 11%
above £36,415 an additional 1%

So some one earning less than £4,745 would pay no tax and someone earning £45,000 would pay tax of £10,207.60 & NI of £3,542.55, leaving take home pay of £31,250.

(BTW I'm a New Zealand CA)

drewchad,

I was just going through the inland revuenue website and I found these allowances published at this link http://www.inlandrevenue.gov.uk/rates/it.htm

Taxable bands 2003-04 (£)
Starting rate 10% 0 - 1 960
Basic rate 22% 1 961 - 30 500
Higher rate 40% Over 30 500

Taxable bands 2004-05 (£)
Starting rate 10% 0 - 2 020
Basic rate 22% 2 021 - 31 400
Higher rate 40% Over 31 400

Can you please confirm if I have misunderstood the details.

[aj77]

yeah I have seen that link that says,

Exclusion of persons subject to immigration control from entitlement to tax credits
3. - (1) No person is entitled to child tax credit or working tax credit while he is a person subject to immigration control, except in the following Cases, and subject to paragraphs (2) to (9).

As I belong to sub-continent(Asian) country and I don t belong too EEA countries.And I don t think My case falls in any of above exceptions from Case 1 to 5.Only exception is that my daughter was borne in Manchester but I don t think any UK born baby qualifies for any benefit other than her Parent,status.

Did you find any point which indicates that HSMP applicant can qualify?

[aj77]

When I first contacted them on telephone.Lady told me that any person who hasNIC number can qualify for Tax Credits.She further said that it is not their matter whether it falls in the Public Fund or not.And What can be the consequences on my immigration status of awarding me these Credits.They were only concerned with the data I provided them .Any they decided on that information.
When I later contacted to know the grounds on which they approved my application as we are both subject to immigration control.Though they said that if both are subject to immigration control,one cannot qualify but for my case they said that my case has been decided on the information I provided to them but couldn t mention any specefic condition to qualify.I asked them to review my case as it can create problems to me in future telling them about my exact status.They agreed to review but 5 months are gone they didn t contact me yet.

[try-one]

Hi,
We applied for children tax credit and they approvied it, then I called to confirm if we were really entitled based on our EC restriction (No recourse to public funds) they said we were not entitled and they didn't know about the restriction.
THe problem here is that people in charge of checking the tax credits are not trained in immigration, they check the same things all the time and they don't consider immigration categries. but, you could, migh, would, have a problem if you receive tax credits you are not intitled to.....I know is tempting to get that money, it would help with the costs and you are paying your taxes as any other local, but in a few years when you go for ILR you would want to have your file clean and avoid any nasty surprises...

[John]

AJ77, I agree that it appears to be the case that you and your wife are not entitled to claim tax credits.

Tax credits are administered by the Inland Revenue and these days all their manuals, instructions to their staff, are openly published on the Internet.

Here is a link to the page dealing with :-

TCTM02104 - Entitlement: Immigration rules

Lots of detail on that page and the links it provides. So anyone from Croatia and Turkey is within the terms of Case 4, and those from Algeria, Morocco, Tunisia and Turkey are within Case 5.

But AJ77, as you say, you are from a South Asian country, and therefore not able to get within the terms of either case.

I think you should write to the Tax Credits office again pointing out your immigration status and asking them either to confirm in writing that you are entitled, in which case could they please explain why, or alternatively take the appropriate action. You might want to point them in the direction of their own manual. Page "tctm02104" will take them to the page I link to above.

But returning to whether you have claimed Public Funds ..... those are a limited range of benefits detailed in paragraph 6 of the Immigration Rules, and WTC and CTC are not listed there.

Try-one ... a good example of someone being inadequately trained .... and not reading the manual!

[hk_007]

It is clear in aj77's case that the credits have not been claimed fraudently, instead it appears that the inland revenue has made a mistake and is awarding the benefits.

The question is whether Inland Revenue can reclaim all the money that has been paid. Recently the IR tried to claw back child benefits it had overpaid due to its own errors and there was a big protest against it. I am not sure what the exact outcome was, but IR decided at least in some cases that it would not demand the return of the overpaid benefits. Therefore, there is a precedent that the person receiving the benefits is not at fault if the errors (or the fact) was brought to the attention of IR but IR continued with the payments.

[hk_007]

Tax Basics:
Most individuals work in the UK as employees and have Income Tax and National Insurance deducted at source on a progressive scale as follows:

Income tax:
£0 - £4,745 = 0%
£4,746 - £6,766 = 10%
£6,767 - £36,415 = 22%
above £36,415 is taxed at 40%

I was just going through the inland revuenue website and I found these allowances published at this link http://www.inlandrevenue.gov.uk/rates/it.htm

Taxable bands 2004-05 (£)
Starting rate 10% 0 - 2 020
Basic rate 22% 2 021 - 31 400
Higher rate 40% Over 31 400

Can you please confirm if I have misunderstood the details.

Drewchad has presented the same numbers in a different way for 0 & 10% but for 22 & 40% bands I think a correction is needed.

Your personal allowance- first 4,745 of your earnings is not taxed, hence,
0 to 4,745 @ 0%

Next 2,020 is taxed at 10%, hence,
4,746 to (4746+2020=) 6,766 @ 10 %

Next (31,400 - 2020 =) 29,380 is taxed at 22%, hence,
6,767 to (6,767+29,380=)36,146 @ 22%

Above 36,146 @ 40%

[aj77]

I got the conclusion that from immigration point of view I didn t violate any immigration rule as it is not included in the list of public Funds
but from Taxation point of view I might not be entitled to CTC and WTC as CTC and WTC can not be claimed by the person subject to immigration control if his partner is also subject to immigration control.
I should talk to them in detail to give me clear written statement about their decision as it look like to be official Error.I have also studied that law in detail,there are three stages of decision First stage calls initial decision which I got, second stage is Revised Decision which I have already applied and final decision comes at the end of Financial year which is expected to come in june 2005.They can change their decision at next two stages too.

Thank You for the members for your suggeesstions.I really appreciate the last four replies for the members as all these combining together can give the clear picture of my case and suggesstions will prove to be very useful for handling this case in neat and clean manner.I will inform you about the outcome of my case whenever it would be finalised.

[John]

AJ77 :-

I might not be entitled to CTC and WTC as CTC and WTC can not be claimed by the person subject to immigration control if his partner is also subject to immigration control.

Subject of course to the details of the regulations that I have already linked to earlier in this thread. So anyone reading this who is from Croatia or Turkey (within the terms of Case 4), and those from Algeria, Morocco, Tunisia or Turkey (within the terms of Case 5) should look in greater detail to see if they are entitled to claim any tax credits.

From the immigration point of view, given that WTC and CTC are not within the definition of Public Funds, and I, suspect never will be for the reason that some people subject to immigration control are indeed allowed to claim, so I cannot see that your visa situation is in any danger.

One thing worth point out here is that a person who already has their ILR visa is not within the definition of a "person subject to immigration control". Of course their visa does not have a "No recourse to Public Funds" restriction ..... but their partner for some reason might still have a restricted visa, and in the terms of the The Tax Credits (Immigration) Regulations 2003, there would be no problem in a claim for tax credits being made by that couple.

What you should do now about the tax credits? I can only point you at the comment I made in this thread yesterday at 9:57am. (UK time).

[aj77]

I got the extension for next 3 years so it is clear now that they didn t consider CTC and WTC as Public Funds.Since my required date was 15th of Dec ,on the same date I received renewal Application form for my Tax Credits.Once again they asked me to confirm the information they have about me.But once again they did not ask me about my immigration status.This is sure that they know about my immigration status now as I can see my profile online which has been updated about my immigration status.I confirmed them whatever they asked me to confirm.
I received my Passports on 21st of Dec it looks like to me that they thoroughly studied my file and approved my Application for Extension of next 3 years knowing that I am getting Tax Credits and they don t have any objection on it.With the same time time getting the Renewal form from Tax Credits gave me the immpression that they are awre that I am subject to immigration control and they have no objection on this as once again they didn t bother to enquire about my immigration status.But asked me to confirm the other information they have about me.