Welcome to our guide for low income workers
Low income workers have to deal with HMRC as a tax assessor and collector and also as a giver of tax credits and other benefits. There is still some way to go before these various parts of HMRC act as a unified whole.
Until they do and their processes work well there can be scope for error. This part of our website tries to help low income workers check what they are receiving from HMRC and to give them the confidence to challenge HMRC if they do not understand.
We would encourage you to try and solve your tax problem for yourself, because in the long-run if you can understand what is going on you can manage your tax affairs so much easier in the future.
What you can find in the low income workers section of our website
Most people in the UK are employed and are within the Pay As You Earn collection system. The first part of our guide therefore concentrates on those people who are Employed and in particular the important task of checking code numbers, deciding if a tax return is required and understanding national insurance contributions, expenses and pensions.
There are over a million people on low incomes who are Self-employed and this automatically puts such people into the self-assessment system. This requires them to understand record-keeping requirements; remembering important dates; how to calculate business profits and losses; the complicated national insurance system and the impact of VAT. There also sections covering how to react if HMRC have decided to investigate the accuracy of your records or if you are in debt.
On top of the tax issues the low income worker needs to understand whether they are entitled to receive government help in the form of Tax credits which is given as a supplement to a low income (working tax credit) or as extra help for those with children (child tax credit).
Unusually for our website, we have targeted help on tax credits both at the tax credit claimant and those that advise them. The vast majority of tax credit advisers are in the voluntary or local government sectors, but do not necessarily deal with tax credit issues on a daily basis.
The low income worker is very often coming into contact with the benefits system, either at the same time as working or between spells of work and unemployment. There is often misunderstanding as to the entitlement rules and tax status of State benefits , so we provide an easy to follow guide to the principle benefits.
Sometimes if you do not agree with HMRC or you have been badly treated, you will want to appeal or complain and our section Appeals and complaints will help you to do that.
If you do not understand a particular word or expression you may get help from our glossary of tax terms under What do we mean by....?
If you need a quick summary of current tax and national insurance rates we have set these out in Tax and NIC rates.
Many people are baffled by the questions that HMRC ask, so we have provided some help in our Understanding HMRC forms guide.
Sometimes it is helpful to have the computer do the hard work and provide you with a calculation of some sort so we scour the internet for those that we think might be most helpful and provide descriptions in our Calculators section.
We have also included a section on Council tax and business rates outlining the rules and looking at the special reliefs available
Finally, if you do not think we have covered what you wanted to know or you would like to tell us of your experiences so that we might learn and try to get things changed then please do contact us.
Throughout this site we can only offer general guidance on tax topics and you should always obtain specific advice before taking any action.
