How can people in need access free tax advice?
Posted on November 27th 2018
As Solicitors, we often provide free initial or discounted advice for people who critically need legal help but may struggle to pay. We understand that being able to access affordable legal services from the beginning can make a dramatic difference to the long-term outcome of a legal problem. Often, it means that the client faces less stress, and the overall cost of resolving the problem is lower.
We recognise that people in need also urgently need access to many other professional services. However, they may struggle to access these services and may not know where to turn for free advice.
That’s why we are promoting Bridge the Gap – a campaign to promote two charities which offer free tax advice for people on low incomes:
- TaxAid – provides tax help to people of any age on lower incomes.
- Tax Help for Older People – specifically provides tax help to people over 60 on lower incomes.
Tax problems can be devastating:
Importantly, the people these charities help have nowhere else to turn. The charities give advice and where necessary act for the client. Their help makes a huge difference, is frequently life changing and gets the client back on their feet.
In effect they provide the tax profession’s safety net. The people that the charities help may:
- Be homeless;
- Have recently experienced bereavement or a family breakdown;
- Be suffering from a serious illness or mental breakdown;
- Have lost their business or been the victims of abusive employers or contractors.
In general, these people may not understand HMRC language and correspondence and may not know how to respond or who to contact.
Unrepresented and vulnerable people may struggle with any number of tax problems. For example, some people may be unnecessarily caught up in self-assessment and therefore receive late-filing penalties which continue to build. Others may not understand the multiple tax codes on their small incomes and pensions.
Overall, tax problems can cause vulnerable people to spiral into debt which they can never afford to pay back.
How have the charities helped people?
Below is an example of how TaxAid recently helped two people in different situations with their tax issues:
Jackie was unemployed and decided to set up a gardening business. She successfully applied for a DWP start up loan of £1,000. She started in 2013 but suffered a nervous breakdown and never got going. As a result of her serious mental health issue, she didn’t submit a 2013/14 return. By the time she asked for TaxAid’s help she already had penalties of £1,600 and her mental health condition had worsened. TaxAid explored the background (DWP had already awarded her ESA) and based on their evidence, HMRC cancelled the return and penalties.
Ahmed’s problems had different roots. He had been a self-employed plasterer but in January 2012 he stopped being able to secure regular income. Therefore, he found a job with a cash and carry business. He had to provide them with his passport and NI number and was told that he was employed. However, he was not given any payslips. In 2014/15 he looked for new employment and through an agency found two part time jobs. They did provide payslips and deducted tax, so he thought all was in order. However, the two firms did not set him up correctly under PAYE and as a result Ahmed underpaid tax in 2014/15 and 2015/16. He sought the advice of TaxAid in a desperate state, with a self-assessment debt of £3,200 (late filing penalties from 2012/13 and 2013/14) and a PAYE debt of £3,853 from the two later years. TaxAid successfully appealed the PAYE underpayment (on the grounds of employer error and ESC A19) but for the earlier years the pragmatic approach was to complete SA returns showing the income as self-employment and appeal the penalties (looking at the case in the round) – which HMRC accepted.
In Ahmed’s case, the initial issues resulted from the employer misleading him to think he was employed. But this highlights a problem many on low incomes face – because if they do take it up with the employer or HMRC, they risk losing their job.
The two charities helped almost 22,000 people in the year to March 2017. Many suffered from mental illness or from abusive employment practices; all were vulnerable and critically needed tax advice. With the help of the two charities, they were able to put the tax issue behind them and start rebuilding their lives.
Support the Charities:
You can learn more about Bridge the Gap and support the campaign by following this link: www.bridge-the-gap.org.uk
Need help with your tax affairs?
If you or someone you know is on a low income and in need of help the Charities can be contacted on:
Tax Help for Older People:
www.taxvol.org.uk 0845 601 3321 or 01308 488 066
taxaid.org.uk 0345 120 3779
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