Help! Tax credit compliance investigation

Donna001

Ok, please don’t judge me, this is pretty embarrassing for me but here I go….

I started working in a massage parlour one day a week, registered self employed as a nail technician and applied for Working Tax Credits. This was in July and I have just had a letter off a Revenue and Customs Compliance Officer asking me for (amongst other things like bills, tenancy agreement):

- my taxpayer reference number
- invoices
- breakdown of hours worked per week
- copies of advertisements
- summary / diary of bookings and / or appointments
- bank statements

Obviously I have none of the above (bar bank statements).

I don’t want to say ‘actually I was working in a massage parlour’ (aside from not wanting people to know, I don’t want to get on the wrong side of my old boss whose a nasty piece of work and is admament she won't vouch for me and ‘doesn’t want tax people sniffing around here.’) However, if I say ‘cancel the claim because I never got round to getting set up my business’, it will look like I put a fraudulent claim in just to get some money.

I’ll just add that I’m not working there anymore. I finished last month, signed on JSA and I’m starting full time work in a care home in two weeks. Basically I’ve turned my life around.

I’ve really turned a corner but I just don't know what to do over this working tax credit claim investigation. Its something I don’t even want or need anymore. I don't know what to do and I’m scared I’m going to be in deep trouble. Any advice would be greatly appreciated.

Thankyou, Donna
　

Sixer

Hi Donna

Did you register as self-employed and declare the massage parlour earnings as if they were nail technician earnings? Or did you just regard the massage parlour money as cash-in-hand money and declare it nowhere?

Donna001

Hi Sixer

I was told when I set up you declare your earnings when you do a tax return every April, so would be when I declare it? I just worked the one day a week and after I bought my food I put the rest in the bank.

Loopy_Girl

Donna001 wrote: »

Hi Sixer

I was told when I set up you declare your earnings when you do a tax return every April, so would be when I declare it? I just worked the one day a week and after I bought my food I put the rest in the bank.

That's true for tax purposes but for tax credit purposes they can ask for proof of your employment at any time - as you have discovered.

Did you get paid into your bank from the parlour? i.e can you prove the income from it?

I donno what to say really....I guess honesty is going to have to be the best policy here.

Either that or say nothing and have to pay back all the tax credits you received from July to October.

It's up to you really.

Of course if you have been working more than one night and earned enough to take you over the tax threshold then you are in a different kettle of fish entirely

GlasweJen

How can you claim tax credits if you only worked 1 night per week? You have to work 16 hours to get tax credits if you have a child or a disability or 30 hours if you have neither.

Sixer

Donna - did you keep a record (regardless of declaring it anywhere) of the hours you worked, the money you earned and expenses incurred (if you were self-employed)? Presumably, you worked in the massage parlour as a self-employed person? If so, did you notify HMRC that you had become self-employed?

If you didn't, you do have some fairly big problems about paying tax and NI and also the benefits you claimed. You're probably going to need some specialist help because your problems involve a somewhat delicate area of employment, tax *and* benefits. I think you are going to have to tell someone, and soon.

https://www.uknswp.org/resources\RSW1.pdf

The PDF above has lists of organisations that help sex workers in each UK region. Most are concerned with health, which won't affect you hopefully, but some do offer welfare advice and you may find one near you that is able to advise you on the best way to proceed.

Donna001

Loopy_Girl wrote: »

Either that or say nothing and have to pay back all the tax credits you received from July to October.

Hi Loopy Girl, I never recieved a penny from them. This compliance letter was the first I've heard from them and I start a full time job in two weeks, so I don't even want the working tax money anymore.

Donna001

Sixer wrote: »

Donna - did you keep a record (regardless of declaring it anywhere) of the hours you worked, the money you earned and expenses incurred (if you were self-employed)? Presumably, you worked in the massage parlour as a self-employed person? If so, did you notify HMRC that you had become self-employed?

Hi Sixer, yes I did keep a record and I also notified HMRC I was self employed. Also, as I just said to Loopy Girl, I never got any money from them, this complance letter was the first I've heard from them and I don't even want the money now, I completely moved on. Thankyou for your help

Donna001

I'm still unsure what to do. I feel I have two options:

Option 1 - tell the Compliance Officer I was working in a massage parlour, although I can't give the place name or address (I'm more scared of my old boss than the complaince officer). The queston is here though, would the Compliance Officer believe me if I don't give the parlour name and address or my old bosses number? Also, would the Officer think maybe I'm still working there?

Option 2 - say I never actually did any work - although this will then will look like a put a completely fraudulent claim in.

Can anyone advise which is my best option? And which is most likely to produce the best outcome. I just want to get this mess sorted! Thankyou for your help

Loopy_Girl

I don't see how you could have fraudulently obtained money if you never actually got any money from them

Didn't you chase your claim up?

kazwookie

Just tell the officer the truth, they will have heard it all before.

It might not be you they are investigating, but the parlour you worked in.

Have ready a list of all your hours / money you got paid / expenses for doing the job. such as clothes, etc