New rules for claiming working tax credits self employed

tomtontom wrote: »

You are implying that the OP should fix their accounts so as to maximise their benefit entitlement. Making a false declaration, even one that makes them appear to be earning more than they are, would be a fraudulent act and leave the claimant open to prosecution. It's pretty stupid advice and should be ignored.

It's not fraud to not declare an expense against tax. Normally self employed people such as myself claim every expense possible even those that may not be 100% to do with the business to minimize the tax payable. I am not forced to claim any expenses at all against the income earned. It's self assessment. What would the HMRC say to me...you haven't claimed this new laptop and printer you bought last year we owe you more money and because you didn't claim mileage for picking it up we're going to penalize you by giving you more of your tax money back. Sounds strange to me.

I'm earning less than £8,000 per year. I don't keep accurate records of every little expense as there's no tax or national insurance to pay anyway so I just declare I earn a little less than the lower profits limit of NI and leave it at that. I can't imagine the HMRC coming in to audit my books finding £8,000 of income then going through my bank statements to find undeclared expenses then reporting me to the Crown Prosecution Service for a fraud prosecution. I don't claim for my laptop (I use it to browse personal web sites as well as business), printer (I've used it to print personal documents), mobile phone (I make some personal calls on it) or anything. I don't bother claiming for travel costs as there's no need to. I ensure I visit a restaurant during my travels and put a meal on my debit card which then disallows the travel cost as an expense as it now becomes a personal expense. I don't claim for broadband as my partner uses the broadband too. I don't claim for gas and electricity costs as I can't personally be bothered apportioning it out to save nothing.

OP, use the business assets in your personal life to prevent them being able to be claimed as a business expense and don't claim for them at all.

HappyMJ wrote: »

"Should earn" does not equal "must earn". There's nothing stating the profit must equal or exceed minimum wage.

I am quoting form the Gov website

If the average hourly profit from your self-employed work is less than the National Minimum Wage, the Tax Credit Office may ask you to provide:

business records
your business plan - find out how to write a business plan
details of the day-to-day running of your business
evidence that you’ve promoted your business, eg advertisements, flyers

I understand what you are saying because the actual legislation is very 'wooly'.

However, looking at various briefing papers and follow up articles it seems pretty clear that HMRC are going to be looking at businesses that do not make a reasonable profit after a reasonable time.

Any business venture that just breaks even after a number of years is, in my opinion, not a profitable business unless there are substantial business reasons for this (hence their requirement to look at business plans)

Receiving tax payer's money to prop up a business (or the self employed's finances) that has no future prospect of making a profit (IMOP) needs to be looked at very carefully.

Marktheshark wrote: »

They can say anything at the end of the day they must adhere to statutory instrument as in Legalisation.
Like to workfare case, if its not set in law, they will ultimately have to back down.

Personally, I think it made life to easy, but we must stick with whats legal.

Not much point in having the same debate about this as previous.

I did not say the legislation changed, please quote me if I did.

I said, that is how cases are selected for review. Legally they can check every single claim but there would be no benefit in them doing so.

briwhite1 wrote: »

let my accountant deal with it

If they have the appropriate authority to do so and actually know anything about tax credits.