UK Government

HM Revenue & Customs (National):Self-employed reminded to report income

Press Release   •   Nov 22, 2010 12:00 GMT

Self-employed tax credit claimants are being reminded that they should let HM Revenue and Customs (HMRC) know their total profits for 2009/10 as soon as possible.

Failing to provide the correct details could lead to an overpayment. And supplying incorrect information could even lead to a penalty.

Letters will start to land on doorsteps this week urging claimants to contact HMRC as soon as they know their final income figure for the previous tax year - and no later than 31 January 2011. The amount that tax credits claimants receive can change as their situations change.

When they renew their claims, the self-employed can give HMRC an estimate of their income. Where an estimate has been provided, they have until 31 January to inform HMRC of the actual figure.

Failure to tell HMRC promptly of any changes in their income can also result in an overpayment, which means claimants will have to pay back some of the money they’ve received. They could also face a penalty and, in cases of deliberate fraud, criminal prosecution and imprisonment.

As part of a wider government crackdown, HMRC and the Department of Work and Pensions (DWP) last month published a strategy designed to tackle error and fraud in benefits and credits.

Exchequer Secretary to the Treasury David Gauke said:

“There is too much error and fraud in our benefits and tax credit systems. These losses are unfair, unaffordable and unacceptable. Last month the Government therefore launched radical new proposals to reduce the billions lost every year. We will now use credit reference agencies and data matching to spot patterns of fraud. We are also employing more investigators and will investigate each claim in high-fraud areas. We have to make every penny count – and that includes going after the cheats at every level. The self-employed have to do their bit by telling us promptly of any changes in their income estimates.”

Notes to editors

1. This campaign follows last month’s push to remind tax credit claimants that they must let HMRC know immediately if a partner moves in or out, and that deliberately failing to do so could constitute criminal fraud and result in prosecution.

2. For information on the Government’s new Fraud and Error strategy for benefits and tax credits see http://www.dwp.gov.uk/newsroom/press-releases/2010/oct-2010/dwp138-10-181010.shtml.

3. Some 675,000 tax credit awards (8.9 per cent) in 2008/09 had errors relating to income. The potential size of the loss is £145m.

4. For general tax credits information: http://www.hmrc.gov.uk/taxcredits/index.htm.

5. Help and advice is also available from the tax credits helpline on 0845 300 3900.

6. For tax credits statistics: http://www.hmrc.gov.uk/stats/personal-tax-credits/menu.htm.

NAT 54.10

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