PLEASE HELP! Self employed/no work, what am I entitled to?

livingforthemoment

Hi I don't know if you are all sorted now, but myself and my partner are in a vey similar situation, minus the kids. were both self employed and working 50 hrs a week, trying to get contracts etc. our only income is tax credits, so we qualify for housing and council tax benefit, visit your local One Stop shop, they have all the application forms etc, usually you will have to make an appointment, if your in debt you may get "back payments" to cover rent. i hope all is well with you and wish you the very best of luck, this country needs new businesses, we just have to strive on, the money will follow.

Oldernotwiser

livingforthemoment wrote: »

Hi I don't know if you are all sorted now, but myself and my partner are in a vey similar situation, minus the kids. were both self employed and working 50 hrs a week, trying to get contracts etc. our only income is tax credits, so we qualify for housing and council tax benefit, visit your local One Stop shop, they have all the application forms etc, usually you will have to make an appointment, if your in debt you may get "back payments" to cover rent. i hope all is well with you and wish you the very best of luck, this country needs new businesses, we just have to strive on, the money will follow.

Fortunately tax credits are tightening up to stop this sort of thing. Unless you run a viable business which pays NMW for the required number of hours, people are finding that their tax credits are being withdrawn.

bestpud

Oldernotwiser wrote: »

Fortunately tax credits are tightening up to stop this sort of thing. Unless you run a viable business which pays NMW for the required number of hours, people are finding that their tax credits are being withdrawn.

Quite right too!

I know someone with a business that has not made money in four years because they are supposedly paying for assets.

This person takes all the cash from the business, but better than that, they somehow offset the tax against the income from their part time paye job.

So, they repay assets (on paper only), take cash from the business and, for tax credit purposes, declare £3k a year less from their paye job than they actually earn!

All they lose is the accountant fee!

It's a crazy situation!!

Hammyman

Perfectly legal though and they don't lose the accountant fee as its a tax deductible expense.

And no, people are not finding their tax credits being withdrawn for not earning NMW. They're getting them withdrawn for not having a "reasonable TURNOVER". Thats turnover, not profit. The two are not the same thing for those who don't know - turnover is how much money the business takes, profit is turnover minus deductible costs/expenses. Profit is what tax credits are based on. So you can still have a zero or low income far less than NMW as long as you have a decent turnover expected of a business where the person is working the hours they claim.

Cazar_2

did you know you can actually get a negative income from a s/e buisness deducted from your partners earnings in the calculations for tax credits

also there are huge numbers of people who are self employed who do not claim Housing / Council Tax Benefit.
It is also worth pointing out that some expenses that are tax deductible for tax/ni are not deductable for benefit assessments.

BaldEagle

Hammyman wrote: »

They're getting them withdrawn for not having a "reasonable TURNOVER". Thats turnover, not profit.

Really? I'm surprised at that as you only complete your profit figure on the WTC forms, not the turnover. That would suggest that the WTC folks within HMRC liaise with the department dealing with your tax returns and, according to someone I know who used to work for HMRC, they rarely liaise with the other people in their own offices let alone other departments...

Cazar wrote: »

It is also worth pointing out that some expenses that are tax deductible for tax/ni are not deductable for benefit assessments.

Good point. I argued this a few years back, accusing the assessor of being a jumped up little jobsworth who thought he was more powerful than HMRC (I know...I know...:o) but it's true.

Here a good link giving you an idea of some of the differences: http://www.lewes.gov.uk/housing/16601.asp

Dontknowanymore

Cazar wrote: »

did you know you can actually get a negative income from a s/e buisness deducted from your partners earnings in the calculations for tax credits

also there are huge numbers of people who are self employed who do not claim Housing / Council Tax Benefit.
It is also worth pointing out that some expenses that are tax deductible for tax/ni are not deductable for benefit assessments.

I had to give up working as a self employed domestic cleaner as housing benefit stitched me up a goodun.
I was genuinely working and buling up my business, but as I was only doing an average of 15 hours physical cleaning they would not offset the money I paid out to my son's nursery! Thus meaning I was entitled to no help at all, leaving me £100 a week worse off than if I was on income support!
They do not include travel to different clients throughout the day as working, nor is walking around the area, leaflet dropping, which I believe, and for tax credit purposes counts towards the 16 hours.
I tried to build up a business for myself and provide for my children, and look where it got me, £500 in debt as it took them 3 months to come to this decison, and back on income support

Oldernotwiser

Dontknowanymore wrote: »

I had to give up working as a self employed domestic cleaner as housing benefit stitched me up a goodun.
I was genuinely working and buling up my business, but as I was only doing an average of 15 hours physical cleaning they would not offset the money I paid out to my son's nursery! Thus meaning I was entitled to no help at all, leaving me £100 a week worse off than if I was on income support!
They do not include travel to different clients throughout the day as working, nor is walking around the area, leaflet dropping, which I believe, and for tax credit purposes counts towards the 16 hours.
I tried to build up a business for myself and provide for my children, and look where it got me, £500 in debt as it took them 3 months to come to this decison, and back on income support

I can't see how working as a self employed cleaner can be described as "running a business".

I would certainly hope they didn't allow you to claim travelling between jobs as work time either - I would expect someone in this position to be actually cleaning for 20 hours a week to be able to claim tax credits.

The sooner these loopholes are closed the better.

kaya64

I think most on here think being self employed as in massive companies earning big money, just because someone is self employed does not mean they are making big money sometimes we I say as i and my husband are self employed choose to go self employed because there is nothing else and at least we make the effort to start a business and risk everything do so , our home for one thing , if you have a mortgage you ge (NIL) help , oh i know you are saying -too right - blah blah blah why should you get help ?
I think self employed should get help with their mortgage repayments in times when they are struggling , but no there is nothing .
I am full of athritis from working out in the rain, snow and freezing weather on outdoor markets , sometimes only to bring in nothing , it wasen't worth it but at least we got up at 5 am , stacked the van and headed to an outdoor market and stood all day long trying to earn a living , at the moment I have taken a cleaning job , because the business has hit hard times once again , i am unwell too at the moment my knee was injured from falling down stairs and I can hardly stand ,but i am cleaing and mopping floors eight hours a day just to bring money in to pay the bills and mortgage which we worked hard for and won't give in easily.
I have to be honest though we have looked into letting the house go and renting a house because on the wages we get we would be £300 per month better off because we would be entitled to claim housing benefit , we also looked into to giving up the business and claiming JCA , but £105.95 isn't enough to pay the bills and the mortgage so what does one do ? the job i have taken is only temporary for six weeks ,but it will pay something and my husband is looking for evening work .
I have said this on another thread , we are not work shy and do try our best to pay our way , but the system seems to be against us .

FBaby

If it was so easy to get a decent income from benefits for starting a buisness, everyone would do it...

My partner and I would LOVE to become self-employed. We have ideas, we have the business acumen, the experience (which many don't even have starting a new business). We have looked into it, but the risk are just too high, too much to lose. If we were more confident of the potential success, we would do like most business did when they started many years ago (usually as very small start-up), we would go to a bank and make our case.

People want it all nowadays, the very valued by all freedom of being self-employed, the potential of making it big, but without any real financial risks. Because tax credits are much less demanding than banks, no need for a business plan to show the likely success of the business.

My partner and I have given up on the idea at the moment, instead, we work for dreadful companies that treat us like crap to hope to repay our mortgage asap and gain more freedom this way like many end up doing if they can't afford or don't want to rely on tax credits only.