a friend says her tax credits are saying that

Sixer

Jowo wrote: »

Yeah, great post. I bet the stats show a huge surge in the number of self-employed and it would be great to understand how many of the new businesses were set-up by those claiming means tested benefits and who are still benefit dependent after a year or two of trading.

This isn't to dismiss people who do establish businesses when they have a low income.

I'm just curious how many true entrepreneurs there are who have the drive to build up their businesses, increase their customers and push for the lowest business operating expenses and highest profit they can (which it the basic impulse of a true business person)

This, versus those who are happy to coast along with a business that merely ticks over because they can't face the withdrawal of their receipt of tax credits, CT and LHA and are disincentivised to build up their business, who choose a token way of earning income because of lifestyle preferences.

Could it be one reason for the upping of some of the minimum hours of work required for tax credits?

Oldernotwiser

BoGoF wrote: »

HMRC are going to target the 'bogus' self employed who claim tax credits. By that I mean those who register as s/e just for the sole purpose of claiming tax credits but do not actually conduct a business or deliberately have no intention of trying to make a profit.
!

About time too!

Oldernotwiser

Sixer wrote: »

Could it be one reason for the upping of some of the minimum hours of work required for tax credits?

If people aren't genuinely running a business, does it actually help weed them out? You can just as well blag that you're working 24 hours as you can that you do 16.

BoGoF

No, I don't have any links to 'proof'.....HMRC are hardly going to advertise the fact are they.

HMRC's share of the cuts weren't as severe as some other departments but that was on the basis that £7bn a year extra needs to be recovered so there is now a major shift to compliance work and the days of pay now check later (or never) are over.

Jowo_2

BoGoF wrote: »

No, I don't have any links to 'proof'.....HMRC are hardly going to advertise the fact are they.

HMRC's share of the cuts weren't as severe as some other departments but that was on the basis that £7bn a year extra needs to be recovered so there is now a major shift to compliance work and the days of pay now check later (or never) are over.

Well, there's plenty of info on the internet of substance on other alleged crackdowns, such as landlords who don't pay tax on rent, offshore bank accounts, IR35 (disguised self employment). On tax credits, there is little to next credible information about this alleged crackdown.

I also understand that the HMRC admitted that it investigates well under 5% of tax fraud claims submitted to its fraud hotlines.

So I suppose the bottom line is that they are still under resourced and can look into any tax claim of any sort from anyone.

BoGoF

Believe what you want I can assure you it's happening.

Jowo_2

BoGoF wrote: »

Believe what you want I can assure you it's happening.

I can believe the HMRC investigating anybody for anything related to tax, including tax credits.

I've never yet witnessed someone coming onto this forum who has explicitly said they failed a HMRC inspection of their books on the grounds outlined previously (poor business practice) and told they can't receive tax credits.

Okay, the OPs thread excepted, and the members here generally aren't convinced about the reason given.

BoGoF

I didn't say poor business practice I said bogus self-employed - quite different?

Jowo_2

BoGoF wrote: »

I didn't say poor business practice I said bogus self-employed - quite different?

Fair enough. I've not seen any posters come to these boards to say that their tax credits have been refused because the HMRC deem their self-employment is bogus, that they have qualms that they are not spending 16 hours a week on it and asked for evidence in how they operate their business.

I can believe the HMRC have the powers and inclination to do this but it doesn't seem to be a common activity, going on the complete absence of posts from 'self employed' tax credit recipients.

Deals_2

and can get £1000 to help them set up in business. how are they judged?

Jowo wrote: »

Yes, I like the phrase 'amateur' or 'novice' self-employed rather than bogus or fraudulent businesses. I do have great anxiety about people who post on this forum who are setting up businesses, that are no more than hobbies with barely any turnover and those that encourage them to operate 'zero' or low profit businesses to maximise their benefits. They appear to set up their businesses without any kind of research or planning because there's no great profit incentive in the first place.

I would like to get hard evidence that the HMRC are cracking down on this kind of activity but only ever get hearsay from posters on this forum.


But back to your thread (sorry for going off topic).

you indicated earlier that part of your friends problems are that the people they've provided goods or services to aren't paying or are paying late. you should encourage your friend to seek business advice about how they can deal with late or non payers.