Self Employed law entitlment to tax credits

daz1247

Where do i start basicaly my partner and I are self employed and not taking a wage out of the business but we chose to re investing what money there is in new equipment etc. After a tax credit enquiry they have stopped our wtc and child care because we dont meet all 4 conditions of qualifying for Remunerative work it is the forth condition we dont meet due to not taking a wage. The tax credits technical manual can states
Fourth condition

The work must be done for payment or in expectation of payment.

This means work for an employer in return for wages salary or some other measurable reward

Or

If the person is a self-employed earner, work carried out other than as an employed earner for a reward or profit. The payment must be made in cash or kind.

after a recent letter from them they have shortend the self employed bit to read If the person is a self-employed earner,the payment must be made in cash or kind. Although we are charging customers for work we must take a wage but even the tax credit manual glosary states as below
Remunerative Work

Remunerative work means

• Work for an employer in return for wages, salary or some other measurable reward. The payment must be made in cash or kind

Or

• If the person is a self employed earner, work carried out other than as an employed earner for a reward or profit

Could anybody shed any light for me as cab are not sure either and i dont seem to be able to find a solisitor who knows many thanks

Oldernotwiser

If you aren't taking a wage out of the business, what are you living on?

[Deleted User]

daz1247 wrote: »

Where do i start basicaly my partner and I are self employed and not taking a wage out of the business but we chose to re investing what money there is in new equipment etc. After a tax credit enquiry they have stopped our wtc and child care because we dont meet all 4 conditions of qualifying for Remunerative work it is the forth condition we dont meet due to not taking a wage. The tax credits technical manual can states
Fourth condition

The work must be done for payment or in expectation of payment.

This means work for an employer in return for wages salary or some other measurable reward

Or

If the person is a self-employed earner, work carried out other than as an employed earner for a reward or profit. The payment must be made in cash or kind.

after a recent letter from them they have shortend the self employed bit to read If the person is a self-employed earner,the payment must be made in cash or kind. Although we are charging customers for work we must take a wage but even the tax credit manual glosary states as below
Remunerative Work

Remunerative work means

• Work for an employer in return for wages, salary or some other measurable reward. The payment must be made in cash or kind

Or

• If the person is a self employed earner, work carried out other than as an employed earner for a reward or profit

Could anybody shed any light for me as cab are not sure either and i dont seem to be able to find a solisitor who knows many thanks

If you are not intending to take money from the business and re-investing instead you are obviously not receiving or expecting to receive reward in cash or in kind are you?

And as asked previously, what money do you live on if you are not paying yourselves?

christine_chris_chrissy

" After a tax credit enquiry they have stopped our wtc and child care "

krisskross

Oldernotwiser wrote: »

If you aren't taking a wage out of the business, what are you living on?

Tax credits, they will still have the ctc plus child benefit. Plus no doubt council tax help and LHA if they rent. I asked before how this works. It seems you can set yourself up as self employed by selling on Ebay and claiming to do over 16 hours a week. Maximum WTC is better than JSA.

Oldernotwiser

krisskross wrote: »

Tax credits, they will still have the ctc plus child benefit. Plus no doubt council tax help and LHA if they rent. I asked before how this works. It seems you can set yourself up as self employed by selling on Ebay and claiming to do over 16 hours a week. Maximum WTC is better than JSA.

Thanks for the explanation; I didn't realise that this was possible.

However, as the tax credits have been stopped, I wonder what they're living on now?

christine_chris_chrissy

they must be taking a wage surely,time to reapply?

daz1247

we live on our wtc ctc and cb and we live a simple life lpg vehicle we dont drink we budget everything dont eat out we have just changed business premises to save 3.5k a year our business has only been established 22m so it makes more sense to spend money on equipment rather than sub contracting or hiring tools etc it was set up on a shoe string but has assets of over 10k and yes its all accountable you only get out what you put in. We have over 3k owed to us and this is also accountable for tax credits as money for work this is no ebay business and as for what we are living on now well its only been 2wks but my sons wii is in !!!!!! and my car is on ebay

daz1247

subsoniccoyote wrote: »

If you are not intending to take money from the business and re-investing instead you are obviously not receiving or expecting to receive reward in cash or in kind are you?

And as asked previously, what money do you live on if you are not paying yourselves?

Remunerative work means
Work for an employer in return for wages, salary or some other measurable reward. The payment must be made in cash or kind
Or
If the person is a self employed earner, work carried out other than as an employed earner for a reward or profit
We have made profit but re invested this profit their manual also state a self employed person can trade at a loss

krisskross

It sounds as if it is the taxpayer funding this business.

sunnyone

krisskross wrote: »

It sounds as if it is the taxpayer funding this business.

Not the only one either, we had a similar thread last week.

The sooner the tax credit system is gone, the better.