Temporary or self-employment and Pension Credit
Options
esseesee
Posts: 37 Forumite
I am in my mid-sixties and receive State Pension, a tiny occupational pension, Pension Credit Guarantee and associated benefits.
I don't want to return to full-time or even part-time permanent PAYE employment - been there, done that for well over 40 years - but I would like to earn again, after having had a couple of years 'off', and there are a couple of options available to me.
I could return to my former profession in a locum position - only wanting to do a few separate days and weeks a year at a local practice - or I could use a skill I have, and which has been an enjoyable hobby for many years, and become self-employed.
However, it seems impossible to make any sense of what will happen to both my PC, and my tax situation, if I take up either of these ideas. HMRC refers me to DWP, and DWP tells me that HMRC can help. HMRC then claims it is not their remit, and DWP that it is 'nothing to do with them'.
I have been told by an adviser at DWP that the very moment I inform DWP that I am employed, my PC will be stopped, and I must re-apply for it when I finish work. The fact that I may only have a few day's work every few months is, I am told, immaterial, and there is no 'fast track' for re-applying. So short-term temporary employment is impractical, to say the least. When I asked if my PC could not just be stopped for the week in which I had a single day's work, I was told, emphatically, 'no'.
I have been told by both HMRC and DWP that if I go down the self-employment route, DWP will want to assess/inspect my 'books' on an ongoing monthly basis, and that their criteria for ceasing PC is similar to, but not necessarily the same as, that used by HMRC to assess profit/loss/expenses, and hence tax due. I have been unable to get a clear answer as to how the DWP assessment may differ from that of HMRC.
Has anyone moved into self-employment while receiving PC? Would it be possible for me to claim WTC at my age, instead of PC? If I do decide to go down the self-employment route, it would be with the aim of making enough profit to be able to drop my claim for PC entirely, for a few years at least.
I don't want to return to full-time or even part-time permanent PAYE employment - been there, done that for well over 40 years - but I would like to earn again, after having had a couple of years 'off', and there are a couple of options available to me.
I could return to my former profession in a locum position - only wanting to do a few separate days and weeks a year at a local practice - or I could use a skill I have, and which has been an enjoyable hobby for many years, and become self-employed.
However, it seems impossible to make any sense of what will happen to both my PC, and my tax situation, if I take up either of these ideas. HMRC refers me to DWP, and DWP tells me that HMRC can help. HMRC then claims it is not their remit, and DWP that it is 'nothing to do with them'.
I have been told by an adviser at DWP that the very moment I inform DWP that I am employed, my PC will be stopped, and I must re-apply for it when I finish work. The fact that I may only have a few day's work every few months is, I am told, immaterial, and there is no 'fast track' for re-applying. So short-term temporary employment is impractical, to say the least. When I asked if my PC could not just be stopped for the week in which I had a single day's work, I was told, emphatically, 'no'.
I have been told by both HMRC and DWP that if I go down the self-employment route, DWP will want to assess/inspect my 'books' on an ongoing monthly basis, and that their criteria for ceasing PC is similar to, but not necessarily the same as, that used by HMRC to assess profit/loss/expenses, and hence tax due. I have been unable to get a clear answer as to how the DWP assessment may differ from that of HMRC.
Has anyone moved into self-employment while receiving PC? Would it be possible for me to claim WTC at my age, instead of PC? If I do decide to go down the self-employment route, it would be with the aim of making enough profit to be able to drop my claim for PC entirely, for a few years at least.
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Comments
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Do you have an "assessed income period" for PC?
If so, does this not mean that your income does not need to be reassessed during that period?0 -
An assessed income period only means that one does not need to report changes to pensions, annuities, equity release payments or capital as they happen. Other changes in circumstances must still be reported.
An AIP doesn't mean I can merrily go out, get a job or start a business, and continue claiming PC while I rake it in at work - and I wouldn't expect it to. Thing is, I'm not expecting to 'rake it in' at all - and I can't afford to risk losing PC for extended periods because I earning a small amount of money over a short period, or have legitimate allowable business expenses 'judged' by other than the HMRC at the end of the tax year ...0 -
The work can be assessed on what you do, if you only do short period of works then they can assess your claim for the period the money would cover - it can be done clerically. If you go self employed you would have to submit details of your income and expenditure, and it would go to a specialist decision maker on what can and cannot be allowed (note not the same as HMRC) and then it will be assessed every year, but they would techinacally work a year behind but would apply the assessment forward ie tax year 11/12 spread out over payment from 2012 rather do an overpayment back the way.
newly retired - earnings do not apply to AIP as they do not form a provision for retirement, so they have to be reported0 -
See, this is what I cannot make any sense of.
I know that the DWP does not use the same assessment criteria as HMRC, but I cannot get any info as to HOW things might be assessed, and WHAT the differences are.
And how can someone else (ie DWP) apply an assessment forward when the tax payable on any profit I make will be assessed (by HMRC) and payable in arrears? Or does the DWP assessor have some sort of magic forecasting power of knowing precisely how much profit I will make, a year in advance? I don't think so!
I was told by an adviser at DWP that what you suggest if I take short-term employment, cannot be done, that my PC will cease and I would need to go through the faff of re-applying each time I take a short-term locum then finish it. I am almost tempted to take a series of such locums, perhaps a day's work, at three-week intervals or something like that, just to see if I can cause the system to hang up!
I will be attending a PRIME course in a couple of months' time and hope I can find a definitive answer there.0 -
http://www.dwp.gov.uk/docs/dmgch86.pdf
have a look through that, it is the guide that they use for making decision. What I mean is that if your review is say May 2012, you would supply accounts/details for april 2011-april 2012 they would then use those figures for taking any income into account going forward. they would not do an overpayment for april 2011-april 20120 -
Thanks for that - it is a help.
At least it seems fairly clear that the principle on which the assessor would base their assessment in my case would be plain old 'cash-flow', for want of a better term.
What does the frequently-used abbreviation 'SPC' mean? Social Payment Claimant? Silly Person's Cash?
Also DM, GC, QI and SC ...?0 -
Hmmm - on further reading through, it seems I was given the wrong information by the DWP adviser - if I took up employment, my entitlement would not cease as she stated, merely that the amount I would be eligible to claim would change - my entitlement would stand. This is really stated iin crystal-clear terms. I will phone the DWP again with these fact at my elbow.
I may be able to take up employment after all - that would make the practice principal very happy!
Thank you again!0 -
What does the frequently-used abbreviation 'SPC' mean? Social Payment Claimant? Silly Person's Cash?
Also DM, GC, QI and SC ...?
SPC = State Pension Credit (the legal name of what everyone calls Pension Credit).
DM = decision-maker
GC = Guarantee Credit
SC = Savings Credit
QI = Qualifying Income0
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