Self-employment - WTC terminated due to lack of turnover

melly1980

Hammyman wrote: »

I think she may have a problem claiming they're wholly legitimate if she is also looking after her own children. For example if she takes them out for a visit somewhere and she has one clients child and two of her own with her, HMRC would not look favourably on claims for mileage allowance for more than 1/3 of the total.

Hammyman wrote: »

Yes it is different. As the room is shared use and not used solely for the business, i.e it reverts to being your living room once the "darlings" have gone home, you can only claim a flat annual amount and not a percentage of the mortgage interest/rent, electric and gas as you could if it was solely used for that purpose. OTTOMH that fee was not a large amount - a couple of hundred quid.

Since you have trouble reading I will point out the facts again.

The expenses are agreed and legitimate with the inland revenue. They are standard % that you can account for and legitimate.

melly1980

Hammyman wrote: »

, you can only claim a flat annual amount and not a percentage of the mortgage interest/rent, electric and gas as you could if it was solely used for that purpose. .

You seem to forget that my wife is a childminder. It is done in % terms. There is guidance for how to do it.

Sixer

pipscot wrote: »

It seems that if people declare low hours so that their expected "assumed income" is low enough for universal credits, they will then be subject to the conditionality rules meaning that they will need to be applying for other jobs etc

And if they declare enough hours to keep them out of the conditionality rules then they will be assumed to be making a reasonable profit that fits those hours.

Yes, exactly. And all of a sudden this "simple" benefit is starting to look a lot less simple!

Sixer

Hammyman wrote: »

Yes it is different. As the room is shared use and not used solely for the business, i.e it reverts to being your living room once the "darlings" have gone home, you can only claim a flat annual amount and not a percentage of the mortgage interest/rent, electric and gas as you could if it was solely used for that purpose. OTTOMH that fee was not a large amount - a couple of hundred quid.

This is quite an important point. My (rough) understanding is that you can do either, but if you do use a room solely for business purposes and claim as such, then when you come to sell your house you will be liable for capital gains tax.

I work from home, using an office that is also used by my kids for homework. My expenses include a percentage of internet and phone bills and a flat rate (currently £150 per year) for other utilities, both agreed with HMRC.

I could tell the kids to do their homework elsewhere, say the room is solely for business use and claim much more than £150 as expenses, but then I'd be liable for capital gains tax when the house came to be sold.

MissMoneypenny

DaisyFlower wrote: »

been taking from the system for a long time and they are finally wising up as they should have done some time ago.

Different government now. Wise Brown is an oxymoron.

Brown had a degree in history, so at least he will be able to look back and see where he got it so wrong with the economy.

MissMoneypenny

melly1980 wrote: »

Since you have trouble reading I will point out the facts again.

Did you get your refund from Charm School?

Russe11

Oldernotwiser wrote: »

There has been a crack down on people who have set up "businesses" to enable them to claim WTC rather than JSA. Although unfortunate for any genuine claimants, it's a move that's long overdue.

The JCP advises people to claim WTC if you go selfemployed.

Furthmore I can't see how they NMW comes into it there is no requirement to pay yourself anything if you don't want to(as a sole trader).

stroodes

Your best getting a job not self employed. Save tax payers money.

terryw

Russe11 wrote: »

Furthmore I can't see how they NMW comes into it there is no requirement to pay yourself anything if you don't want to(as a sole trader).

It doesn't really come in to it except that because of abuse of s/e WTC there is a crack-down on those who are not genuinely operating a self-employed business. Likely targets are Big Issue sellers, Avon reps, those involved in "pyramid schemes"

Sixer

Russe11 wrote: »

The JCP advises people to claim WTC if you go selfemployed.

Furthmore I can't see how they NMW comes into it there is no requirement to pay yourself anything if you don't want to(as a sole trader).

But the JCP doesn't advise people to run pin money type businesses for a few hours a week and pretend they are working 30+ hours in order to qualify for WTC. Or to set up non-viable businesses in order to claim WTC and avoid jumping through the hoops of conditionality for JSA.

This has been identified as a commonly-used loophole which stretches to actual benefit fraud in some cases.

Hence all the reviews.

Properly self-employed people will be able to continue to claim under the current rules with no problem and will be expected to produce at least a minimal profit under the UC rules.

Those looking for actual capital to see them through a first year or so of trading will possibly lose out - but presumably UC will retain some of the run-on payments for new business start-ups?