New rules for claiming working tax credits self employed

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  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
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    AG47 wrote: »
    Say you are investigated and found your not pulling your weight?

    Is it a case of you are forced to stop trading, or do you get a warning to start working harder or you will be forced to stop trading and back on Jsa?

    Or do you have to pay back some wtc?

    If the work you are doing is not genuine "work"...if you say you work for 30 hours yet the work done doesn't represent 30 hours of effort and only looks like about 5 hours of work then yes you will have to repay all the working tax credits claimed. You will not be forced to shut down the business or go onto JSA you just won't get working tax credits. If you want money you have to think about reducing the hours to below 16 per week and claiming JSA or working harder to create more profit. They won't force you to do anything.

    That's why it's extremely important to keep a diary showing what effort you have put into the business to justify getting working tax credits. You cannot say you spent 5 hours with a client paying you £30 and then spent the next 25 hours looking for more clients by walking the neighbourhood dropping leaflets through letterboxes. A few hours walking around every now and again would be fine generating a new customer each time but not 25 hours every single week and not seeing any new customers at all from a leaflet drop....and besides that...it's more profitable outsourcing a leaflet campaign to someone who earns less than you whilst you concentrate on earning the big money.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • sherbert17
    sherbert17 Posts: 18 Forumite
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    PLEASE DO NOT BE JUDGEMENTAL IN ANY WAY AS YOU ARE 'SPEAKING' TO SOMEONE WHO SUFFERS FROM EXTREME MENTAL HEALTH ISSUES AND IS VERY CLOSED TO BREAKING POINT.

    I claim ESA Support Group Cont Based
    Plus DLA
    I also carry out self employed work that is permitted work under ESA rules that is within my home.This allows me to claim WTC as I work through the night for 5 hours, obviously I can only charge so much due to it being permitted work.

    I was investigated by Tax Credits some years back, and they were made aware of my circumstances including my permitted work, and I have not been troubled since. I first started claiming in 1999

    I now have received the letter as detailed in the opening post and I have not kept records. I knew I could only charge a certain amount so have worked that out yearly for my self-assessment (I have completed these since 1999). Stupid I know, very stupid and I am kicking myself. I have declared my ESA and permitted work earnings and not taken any deductables off.

    I must stress that both ESA (previously Incapacity Benefit) and Tax Credits have been aware of my permitted work, I have NEVER lied, or chosen to deceive them. My self-assessment has included my permitted work earnings and ESA payments. Never has anybody asked for proof.

    After reading the post above this one I am now extremely concerned that the years of me claiming WTC will somehow be clawed back. I could not exist if this was the case.

    Please be aware that I am a very vunerable person, the slightest thing could tip me over the edge and please if you can't offer constructive advice, and will only tell me how stupid I have been for not keeping records and scaring me with regards the possible outcome, then I ask of you, please don't post. I must stress AGAIN that both parties are aware of my claims and have not sought to question me apart from approx 8 years ago.
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
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    edited 31 December 2015 at 7:36PM
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    sherbert17 wrote: »
    PLEASE DO NOT BE JUDGEMENTAL IN ANY WAY AS YOU ARE 'SPEAKING' TO SOMEONE WHO SUFFERS FROM EXTREME MENTAL HEALTH ISSUES AND IS VERY CLOSED TO BREAKING POINT.

    I claim ESA Support Group Cont Based
    Plus DLA
    I also carry out self employed work that is permitted work under ESA rules that is within my home.This allows me to claim WTC as I work through the night for 5 hours, obviously I can only charge so much due to it being permitted work.

    I was investigated by Tax Credits some years back, and they were made aware of my circumstances including my permitted work, and I have not been troubled since. I first started claiming in 1999

    I now have received the letter as detailed in the opening post and I have not kept records. I knew I could only charge a certain amount so have worked that out yearly for my self-assessment (I have completed these since 1999). Stupid I know, very stupid and I am kicking myself. I have declared my ESA and permitted work earnings and not taken any deductables off.

    I must stress that both ESA (previously Incapacity Benefit) and Tax Credits have been aware of my permitted work, I have NEVER lied, or chosen to deceive them. My self-assessment has included my permitted work earnings and ESA payments. Never has anybody asked for proof.

    After reading the post above this one I am now extremely concerned that the years of me claiming WTC will somehow be clawed back. I could not exist if this was the case.

    Please be aware that I am a very vunerable person, the slightest thing could tip me over the edge and please if you can't offer constructive advice, and will only tell me how stupid I have been for not keeping records and scaring me with regards the possible outcome, then I ask of you, please don't post. I must stress AGAIN that both parties are aware of my claims and have not sought to question me apart from approx 8 years ago.
    You cannot claim both Employment and Support Allowance for essentially being unable to work but it is permitted to work for less than 16 hours a week and Working Tax Credits which requires you to work 16 hours a week or more. It's either one or the other.

    My OH did claim both for a period of time until she sent in the annual tax credits renewal she didn't know she wasn't able to claim both. The two departments DWP and HMRC don't seem to talk to each other. She had to repay all the overpaid working tax credits when she told them she had stopped working full time and started claiming Employment and Support Allowance and reduced her hours.

    My OH also had mental health issues and her putting her head under the pillow and ignoring letters and phone calls and not doing what was required to meet the requirements of the benefits she was claiming was her way to cope. If you can't repay it then they can come to an agreement for you to repay the overpayment over 10 years. My OH can't repay it and has asked for the debt to be remitted. They haven't done that as yet and 9 months later after I informed them or her mistake all they do is write letters. I wasn't with her when she was claiming.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • sherbert17
    sherbert17 Posts: 18 Forumite
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    Thank you. But I have worked permitted for a number of years whilst in receipt of WTC. I work 3 x nights at 5 hours and 1 night at 3. So I am earning the permitted work, plus WTC of 16 hours plus. This means I am nowhere near the NMW which may NOW be a problem but it never has been in all these years. Hence the confusion. Both parties have chosen not to question me regarding this and apart from a compliance check in 2007, I have had no contact from either party apart from the usual.
  • nannytone_2
    nannytone_2 Posts: 12,949 Forumite
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    w3hat you are failing to understand is that you cannot claim an out of work benefit ( ESA) and an in work benefit ( WYC) at the same time.
    do you not see the contradiction?

    permitted work is allowed on ESA but to claim tax credits you need to make a choice.
    you are either on ESA and carrying out permitted work, or you are disabled and working more than 16 hours and claiming wtc.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    sherbert17 wrote: »
    Thank you. But I have worked permitted for a number of years whilst in receipt of WTC. I work 3 x nights at 5 hours and 1 night at 3. So I am earning the permitted work, plus WTC of 16 hours plus. This means I am nowhere near the NMW which may NOW be a problem but it never has been in all these years. Hence the confusion. Both parties have chosen not to question me regarding this and apart from a compliance check in 2007, I have had no contact from either party apart from the usual.

    Nannytone is correct.

    Permitted work requires you to work less than 16hrs, so 15hrs or less.

    WTC requires you to work at least 16hrs.

    You cannot meet both criteria.
  • sherbert17
    sherbert17 Posts: 18 Forumite
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    Yet I do. If you researched the permitted work rules, you will find that I can and do claim both.

    Taken from disability rights

    Permitted work can include paid employment or self-employment.
    You do not need the permission of a doctor to do permitted work, but you should tell the Department for Work and Pensions (DWP) if you are working.
    For ESA, incapacity benefit and SDA, all permitted work earnings are ignored. If you are on income support, any earnings over £20 will be deducted from your income support.
    Permitted work lower limit

    Under this option, you can earn up to £20 a week for an unlimited period.
  • nannytone_2
    nannytone_2 Posts: 12,949 Forumite
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    can you link to where it says you can claim both ESA and WTC at the same time?
  • sherbert17
    sherbert17 Posts: 18 Forumite
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    Please can you read my posts as neither WTC or ESA has contacted me with regards claiming incorrectly since 2000. I had a compliance check in 2007 for an unrelated issue. Both were and are aware of my permitted work and that I claim WTC. It's all very well saying I cannot claim both as I do and have never been questioned, had I thought I was doing something illegal, I would have seen to it asap.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    sherbert17 wrote: »
    Yet I do. If you researched the permitted work rules, you will find that I can and do claim both.

    Taken from disability rights

    Permitted work can include paid employment or self-employment.
    You do not need the permission of a doctor to do permitted work, but you should tell the Department for Work and Pensions (DWP) if you are working.
    For ESA, incapacity benefit and SDA, all permitted work earnings are ignored. If you are on income support, any earnings over £20 will be deducted from your income support.
    Permitted work lower limit

    Under this option, you can earn up to £20 a week for an unlimited period.

    So you are working 18hrs per week for less than £20?

    I'm sorry to say but it is highly likely tax credits will not accept your WTC claim much longer.
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