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Anti-avoidance for tax credits

The tax credits legislation makes very little mention of specific anti-avoidance rules. Instead, it refers to ‘notional income’ which is income that is treated as the claimant’s income even though the claimant did not receive it.

For example, these rules apply where claimants:

1. •

   deliberately get rid of income in order to claim or increase their tax credits

2. •

   fail to apply for income to which they are entitled

3. •

   provide a service for low rates of payment

TCTM04801

When advising a director of an owner-managed company in relation to tax credits,