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A new charity campaign will help vulnerable people with their tax
KEY POINTS
- Tax can be a problem regardless of the amount of a person’s income.
- Difficulties arise with self assessment and multiple tax codes.
- TaxAid and Tax Help for Older People are the only charities that specialise in tax advice.
- Bridge the Gap campaign hopes to raise £250,000 a year in recurring donations.
Reports that tax advice will no longer be needed with the advent of online personal accounts seem premature.
Tax will remain difficult for many individuals and those who can afford to will continue to pay for professional advice.
This is because it is well known that members of the tax profession provides good advice services, tailored to various situations.
Less well known is the safety net provided for vulnerable people who urgently need tax advice but cannot afford it.
This is provided by two charities, both of which were founded by tax professionals: TaxAid caters for working age people and Tax Help for Older People supports the over 60s.
Tax can be as difficult for those on low incomes as for the better off. If they are vulnerable, because of age or illness, for example, tax problems can be overwhelming.
As a result, they and their families can suffer financially and with their health. The people we see are genuine deserving cases and may be in crisis by the time they find us.
Nick (below; click image to enlarge) is a case study of a vulnerable taxpayer who needed independent advice.
Tax problems
Unrepresented people struggle with a range of tax problems. They do not understand HMRC correspondence or how to fill in a tax return. They do not understand the multiple tax codes on their small incomes and pensions or the underpayments shown on P800s.
Some situations are particularly challenging. These include bereavement, retirement, family breakdown, serious illness, loss of business and home.
Some people are unnecessarily caught up in self assessment and suffer excessive and incorrect late filing penalties.
Worse, some are caught up in exploitative employment arrangements which result in incorrect self-employment or under declarations of tax.
Others suffer inappropriate HMRC reviews or investigations and do not know how to respond. At the other end, some individuals suffer from abusive “accountants”, contractors, and scams.
Few of these people understand their obligations or rights. All of them need advice and some need representation.
Mr Bates (below; click image to enlarge) is an example of the disproportionate impact of processing errors.
Why do people come to us?
Taxpayers come to us because they were unable to find help elsewhere.
A recent study of 7,000 of our clients showed half of them are on incomes below the personal allowance. In addition, about:
- 20% have mental illness;
- 22% have a disability or are terminally ill;
- 12% have limited literacy or a severe learning disability;
- 10% are in abusive employment or domestic situations;
- 10% seek help due to bereavement;
- 3% are homeless with alcohol or drug addictions; and
- 1.5% are prisoners and ex-offenders.
Why the appeal?
Our charities have been helping low income people for many years. At no time have we seen a greater demand for our services.
This is because the working environment has become harsher for those on low incomes. More people have multiple, part-time employments; and more are in low paid self-employment.
The transition from work to retirement is becoming increasingly blurred: older people are facing lower incomes on retirement and many need to remain in part-time employment.
So there are more vulnerable people.
At the same time the tax system has become more difficult, compounded by changes in tax law and HMRC practice. This includes late filing penalties, greater focus on compliance and tightened practices on debt collection.
These may be the correct response in tackling intentional non-compliance, but they are harsh for vulnerable people on low incomes who did not set out to evade tax in the first place.
Bridge the Gap appeal
All this has led to an increased demand for our support. But our resources are already stretched and we cannot help everyone.
TaxAid and Tax Help for Older People serve 25,000 each year. We estimate that at least another 6,000 a year are seeking our support. It could be more but, at present, they fall through the gap.
To meet this growing demand the two charities have come together to launch an urgent appeal, called Bridge the Gap.
We want to raise £250,000 a year in recurring donations from the profession to be shared equally between the charities. The additional money will enable us to:
- develop our services for homeless and vulnerable people;
- strengthen our geographic reach; and
- increase by 25% the number we serve.
A donation enables us to help:
- £42 provides professional tax advice over the phone;
- £100 (£8 a month) helps a newly bereaved widow with the tax consequences;
- £280 (£23 a month) claims special relief, avert a bankruptcy and saves a family losing their home; and
- £400 (£33 a month) allows representation for a vulnerable person defrauded by their employer or “accountant”.
Who else could help?
The people we see have not been able to find help anywhere else.
The tax profession finds it difficult to assist because of the extended help needed and the clients’ inability to pay. They need independent advice and, sometimes, representation, so they cannot turn to HMRC.
Citizens Advice and Age UK are often the first places people turn to for help, but those organisations do not feel equipped to give tax advice and pass most of their clients who have a tax problem to us.
We are the only two charities that specialise in this field. We work closely together and hand clients to each other if this is more suitable. Together, we cover the waterfront and provide the profession’s safety net.
Who is backing this campaign?
This campaign is being strongly backed by the Chartered Institute of Taxation (CIOT), the Association of Taxation Technicians (ATT), the Institute of Chartered Accountants in England and Wales (ICAEW) Tax Faculty, and the Association of Chartered Certified Accountants.
Its patrons are Sir Andrew Park and Steve Edge. It is overseen by a governance group chaired by Anthony Thomas from the CIOT with key people from TaxAid, Tax Help for Older People, the CIOT and the ATT.
Make a donation to Bridge the Gap
