20k redundancy payout and WFTC for self employment

michelle1506

Hello,

I am toying with the idea of voluntary redundancy and could expect a payout of around 20k. My question is, if I took the redundancy and went self employed, am I still entitled to claim Working Family Tax Credit?

I have debts of around 20k to pay off which is what I would like to do. About 14k on a personal loan and about 6k on a credit card. My second question is if I paid these debts off would it be classed as capital deprivation? And would I therefore be ineligible to claim Working Family Tax Credit as a result?

Thank you for your time

magicgirl

I am in a similar situation but without the debts. I am expecting just under 20k but plan to work in the 'family' business. they are looking to change the rules for TC but not sure they have done so yet where your hours and income have to correspond to at least an amount equal to minimum wage.
I have read that payment of debts can be seen as deprivation of assets but there may be some one along who can advise further.

michelle1506

Thanks for that, I certainly hope someone out there knows

It wouldn't be worth me taking the redundancy if I couldn't claim WFTC as a self employed worker. Plus I really wanted to clear my debts :beer:

magicgirl

http://www.goodadvicematters.co.uk/index.php/appeals/i-want-to-give-away-my-capital-because-it-is-affecting-my-benefits-can-i-do-this/

I had found this last time i looked for this info - it may help? I think this was specifically in relation to claiming out of work benefits but may stilll apply to in-work benefits? worth a read.

michelle1506

Thanks will take a look...

Rogerb68

I was made redundant last september, and got a similar payout, with which i paid debts off and settled annual bills in order to reduce my outgoings while i was claiming job seekers.
I was entitled to no increase in child tax credits, as I had earned too much in the previous tax year. I wasnt entitled to working tax credits but when I did go for a job (paying half what I had earned the previous year) I was told it paid too much to get any working tax credit.
I was also told that I wasnt a lone parent, as my daughter (who is still in full time education) had turned 16 on the day of my lone parent interview and therefore I didnt classify.
I would do your research very very thoroughly and get written confirmation where possible of any entitlements you would get going self employed. The benefits office are not very helpful at all (based on my own personal experience)

catmiaow

My partner wants to pay off his debts with his redundancy of 18,000. This would take him under £10,000. He was told by citizens advice that unless he had to pay the debt off due to a court order or if he would lose the house if the didn't, then the benefits office would see that he still had the money and he wouldn't be entitled to anything.

FOURCANDLES_2

Well we are self employed and get c tax credits but not entitled to working tax credits. I think to be honest if you were entitled to working tax credits then you are not earning enough from being self employed and it would be wise just to go and become an employee.

michelle1506

Thanks for taking the time to post the replies

I guess I will just have to stay as an employee then

FOURCANDLES_2

Surely the amount you do get in working tax credit is very small as not to have much of an affect? before I started my own business 5 odd years ago I was on 12k and I only use to get £60pm

abby1234519

If you pay debts off early and there is no legal obligation to do so then it is deprivation of capital. And thats a fact