It’s that time of year again when everyone is rushing to submit their tax returns by 31 January. But little did I know that I also had to submit a tax return for my father who has dementia. So, this is a short guide to understanding the tax return and the power of attorney under a Lasting Power of Attorney.
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As seen in the…
MyPOA and our editor Rebecca Seeley Harris feature in the article in The Sunday Times on 14 January 2024 Why you need a power of attorney, on submitting the tax return last year.
There are no tax breaks for having to pay privately for care costs. If the care is a necessity and isn’t paid for by the NHS, then the donor should at least be able to claim it as an expense.
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Submitting a tax return
Firstly, all the same rules for submitting a tax return apply to you as an attorney submitting a return on behalf of the donor. You have to comply with the same deadline and if you don’t you will get a penalty for late filing. The penalty is £100 for filing up to three months late and you will get charged interest on the amount until it is paid. You can appeal against the penalty if you have a reasonable excuse.
You can start with the Tax Return Notes SA150 guidance supplied by HMRC on ‘How to fill in a Tax Return‘. On page 15 of the guide, it explains that you will need to fill in boxes 23-26 if you have an enduring or Lasting Power of Attorney. This is to act on behalf of someone who is not physically or mentally capable of filling in a tax return. If you have not previously sent evidence of your appointment as attorney, you will need to contact HMRC.
Giving HMRC a digital code
HMRC will now accept the digital code provided by the Office of the Public Guardian. To do this you will need to call the relevant helpline and give them the online code. So, for example, if it is a query about National Insurance, call the National Insurance helpline.
So, for help with self-assessment, you will need to contact HMRC Self-Assessment helpline on 0300 200 3310. You can also look at their general guidance for other ways to contact HMRC. The online code can be obtained using the guidance in this article: View an LPA online
If you do send in the document, make sure it is a certified copy. This should be signed and certified as a true and complete copy, on every page. This needs to be done by either the donor of the power, a solicitor or a stockbroker. HMRC will send it back to you within 15 working days.
Use a certified copy
I would advise not to send the original, in fact, never send the original unless absolutely necessary. It is far better to get a few certified copies made in advance and use these because if it gets lost you still have the original. If the original does get lost or mislaid, you can ask for an ‘Office Copy’ from the OPG. This is a copy of the original but, stamped and authenticated by the OPG.
Trusted helper
It is only if the donor has officially lost mental capacity and you have Power of Attorney that you will be able to sign the tax return as the donor’s representative. The donor may, however, still need help but if they have not lost capacity how can you help them? There is a very useful guide on the Low Incomes Tax Reform Group website which states the following:
If you want your family member or friend to help you manage your tax online, they need to be registered with HMRC as a ‘trusted helper’. Please note that a trusted helper can only help you with limited tasks. These tasks might be checking you are paying the right amount of income tax, checking or updating your Personal Tax Account or requesting a tax refund. A trusted helper cannot prepare or submit a tax return on your behalf.
When ‘trusted helper’ stops
The trusted helper or an agent or accountant, for example, can only help whilst the donor still has capacity. Once the donor has lost mental capacity to manage their own financial affairs, the only person who can deal with the tax return is the person(s) who has the power of attorney. If a power of attorney has not been granted, the individual will need to apply to the court to become a court-appointed deputy.
Paper tax return
As an attorney, however, you cannot file the tax return online so will have to submit the return in paper form. Remember though that there is a different deadline for filing a paper return which is the 31 October.
