Helping vulnerable people in crisis with their tax
In May, we introduced the work of Bridge the Gap, a charity which helps vulnerable people in crisis with their tax. Here we take a closer look at the charity’s work – and how you can help.
Not only the better off need professional tax advice. Vulnerable people on low incomes can also have complex tax situations and need professional help. If they can’t pay for that support they face serious problems as Jessica experienced:
A commitment to Jessica Jessica entered into a partnership agreement with her husband at some point during their relationship. She was the victim of domestic abuse and is now terminally ill. It is likely that the partnership agreement is not legally valid because Jessica did not understand the nature of the agreement she was entering into and it was not entered into voluntarily.
Her husband subsequently locked her out of the family home and as a result she has no access to the business bank accounts and other information. On paper she has assets, but in reality she has nothing and is currently living with her parents. She is now being pressed by HMRC for large tax payments for the past couple of years and came to us as no-one else could help her.
Jessica’s issue is a legal one concerning the validity of the partnership agreement and she cannot resolve her tax debts until this matter is concluded. We have been able to help Jessica at this stage by contacting HMRC and informing them of her situation. Because of her ill health we were able to persuade HMRC to stop pressuring her for payments until the legal issue is resolved. We have promised Jessica we will take up her case with HMRC again once the legal issue is clarified.
Safety net Jessica was lucky in that she found one of our two tax advice charities. TaxAid serves people of working age and Tax Help for Older People supports the over 60s. They were both founded by tax professionals who identified a need for the tax profession to support vulnerable unrepresented taxpayers in certain circumstances. In effect, we provide the tax profession’s safety net.
Who are the people we help? The people we see are genuine deserving cases. They are vulnerable and may be in crisis by the time they find us. They come to us because they have nowhere else to turn.
People can be vulnerable for a variety of reasons. A recent survey of 7000 of our clients showed around half either suffered from mental illness, severe physical illness, disability or had a severe learning disability. And over half were now on incomes below the tax threshold.
Our help makes a huge difference, is frequently life changing, and gets them back on their feet.
What tax problems affect people on low incomes? Unrepresented people frequently don’t understand the language on HMRC forms and correspondence – and don’t know how to respond. Some situations bring particularly difficult tax issues: for example, serious illness, loss of their business, retirement, family breakdown or bereavement.
Some people get caught up in self-assessment unnecessarily and suffer inappropriate late filing penalties, often out of proportion to any tax owed. Some don’t understand the multiple tax codes on their small incomes and pensions (have you tried to explain a K code to a client?). Many don’t understand underpayments on form P800; others struggle with calculations, allowable expenses and can’t fill in a form. More generally, a significant proportion don’t know their rights or obligations.
Worse, some suffer from abusive employer situations which can result in inappropriate self-employment or under declarations for tax. Others suffer from inappropriate HMRC reviews or investigations and at the other end some suffer from abusive ‘accountants’, contractors or scams. All of these people desperately need professional advice. Some also need representation.
The problem is getting rapidly worse Our two charities were founded many years ago and have been serving vulnerable low income taxpayers for over 20 years. The need for us has never been higher. And it is increasing rapidly. Why?
One of the key reasons is that the working environment has become much harsher. A greater proportion of the working population are now in low paid work – either small multiple employments or self-employment. It is also more difficult at retirement: older people face lower pensions and many are forced to remain in part time work. So there are many more vulnerable people.
But at the same time the tax regime becomes more difficult for them: those least able to cope now have more complex tax affairs through self-employment or multiple employments, or both. This is compounded by changed tax law and practice at HMRC – late filing penalties; the greater focus on compliance activity and tightened practices on debt. And while these may be an appropriate response to deliberate evasion they bear harshly on vulnerable people who didn’t set out to evade tax.
An urgent appeal to tackle this problem This has sharply increased the demand for our services. But our resources are already significantly overstretched. Last year, together we assisted 25,000 people. At least 6,000 more needed our support – it could be a lot more. So we have launched an urgent appeal. We have come together to launch the ‘Bridge the Gap’ appeal to the tax profession. We want to raise another £250,000 in recurring donations to:
serve another 6,000 people a year in crisis with their tax
strengthen our geographic reach
develop our services for homeless and vulnerable people.
Who is supporting this appeal? Bridge the Gap is being strongly backed by ACCA, CIOT, ATT and the ICAEW Tax Faculty. Its patrons are Sir Andrew Park and Steve Edge.
Please support this urgent appeal with a donation:
£42 (£3.50 a month) provides professional tax advice over the phone for one more vulnerable person
£100 (£8 a month) helps a newly bereaved widow with the tax consequences
£120 (£10 a month) enables us to help three more people over the phone.
You can make a donation quickly and easily onlinePlease help us help more vulnerable people in crisis with their tax.
Rosina Pullman and Gary Millner, CEOs of TaxAid and Tax Help for Older People, the two tax advice charities
Comment from Chas Roy-Chowdhury – subject matter expert, taxation, ACCA ‘I urge you to support this urgent Bridge the Gap appeal. These two charities are a part of our profession. The people they help are vulnerable, urgently need tax help and have nowhere else to turn.
The work these two charities do can be life changing. But the demand for their services outstrips the support they can give and is increasing rapidly. This is why ACCA, CIOT, ATT and the ICAEW Tax Faculty are all strongly backing this appeal.
Please consider making a regular donation so that we can help vulnerable people in crisis with their tax.’