Why Tax Credits Are Such A Challenge For Accountants In Leeds

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Over the years the UK government has tried a number of schemes for helping the less well off. Over the last few years tax credits have been the main mechanism put in place to help the disadvantaged, those with children and those who work with a small income.

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Leeds is a city that experiences much of the same problems as any other large city in the UK. There is a flourishing financial sector that benefits a well qualified section of society, but as manufacturing has declined over the past few decades there is a section of society that has become more and more dependant on state benefits. Tax credits has received a large amount of bad press over the past few years as the people who need the benefit most are the people who least understand it. It is based on income tax legislation which the average blue collar working would not understand, leaving accountants in Leeds with a real problem if they are to help tax credit claimants.

Thee problem lies in the convoluted way each award is calculated. The very people they are meant to help are the very people who will not be able to understand how the system works. Other state benefits are calculated on tax credit awards which only compact the problem. This has lead to many needy families having to pay back overpayments and some not submitting tax credit claims at all due to the confusing amount of rules and regulations they need to abide by.

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RJD Associates is one Accountants In Leeds that looks at this market with interest and has managed to help a number of clients with their tax credit claims. If the accountant looks after a self assessment, the fee charged does not have to be large as all the calculations have already been performed. It also improves the reputation of the firm and profession as a whole, as accountants are seen to help the less well off in society rather than focussing their efforts on those who are already affluent.

The new government has repeatedly sounded their opposition to the tax credit system. Expect to see some fundamental changes to the benefits system as a whole as the coalition government moves to simplify benefits and move away from means testing. However, the reliance the tax credit systems has engendered on large sections of the population means that it will have to be replaced by something, what that “something” will be is anyone’s guess.

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If you would like to learn more about how tax credits might be effected please visit our tax credits info page.

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