Tax credits Review - Panic!

mdonaldson

I am self employed selling second hand items on Ebay.

I received a letter from HM Revenue and customs today in regard to my recent working Tax Credits claim. The letter says they are checking my claim and they need the following information for the period 01/01/11 to 05/04/11 from me –

Type of work you do and or nature of your business.
Your unique Taxpayer Reference Number.
Summary / diary of bookings and/or appointments you have taken or made.
Copies of advertisements placed.
A breakdown of the hours you worked per week.
Invoices for any work done.
Receipts for any expenses paid.
Statements from all your bank and building society accounts (including any joint accounts).

The letter states that I need to get the information to them by 03/11/11.

Now this has really got me into a panic. I am in the process of working out my paper tax return for this year which needs to be done by the end of the month. I am already very stressed with that and now this has made things much worse.

I am quite happy to send them the documents they need but here are my problems –

I do not have a “Summary / diary of bookings and/or appointments you have taken or made”. I am not sure if this applies to me selling on Ebay – I don’t have any bookings or appointments. I have also never placed any advertisements. If I need to send them something I don’t know what it will be.

Invoices for work done – I sometimes send invoices to Ebay buyers who are slow to pay, but for the vast majority I don’t need to – I don’t know if this applies to me either.

Receipts for any expenses paid – I have receipts for my stock sold, postage and packaging, Ebay fees, PayPal fees, but I usually count these in my Cost of Sales – would I have to send these or just receipts for my Overhead Expenditure?

Bank statements – will this be just bank accounts to do with my business or all bank accounts including ISA’s? Also, should I send a printout form my PayPal account? I also have a credit card I use for buying more stock, would they need that too?

And the biggest worry for me is “A breakdown of the hours you worked per week”. I have kept no written record of my hours worked for that period or before it. Only recently have I started to keep a record of hours in case I got reviewed! I can say though that I have been working 30+ hours a week. I usually work every day of the week, Ebay has consumed my life! I’ve only had a couple of days off in the last couple of years!

I am unsure how I can prove my hours – I have receipts to show days I went to the post office and when I worked on listing items – I am not sure what they would need and how it would affect my claim. I never saw anything in the tax credit notes about having to keep a record of hours worked, they just wanted to know what hours you worked in a typical week. If I had known they needed a week by week record, I would have kept it. I only started keeping a record in the last month or so from reading about keeping a record of hours on a forum.

Any help anyone can give me with this would be greatly appreciated. Like I said, I am especially worried about the record of hours worked. Has anyone else had a letter like this and were in the same situation?

DomRavioli

mdonaldson wrote: »

I am self employed selling second hand items on Ebay.

I received a letter from HM Revenue and customs today in regard to my recent working Tax Credits claim. The letter says they are checking my claim and they need the following information for the period 01/01/11 to 05/04/11 from me –

Type of work you do and or nature of your business.
Your unique Taxpayer Reference Number.
Summary / diary of bookings and/or appointments you have taken or made.
Copies of advertisements placed.
A breakdown of the hours you worked per week.
Invoices for any work done.
Receipts for any expenses paid.
Statements from all your bank and building society accounts (including any joint accounts).

The letter states that I need to get the information to them by 03/11/11.

Now this has really got me into a panic. I am in the process of working out my paper tax return for this year which needs to be done by the end of the month. I am already very stressed with that and now this has made things much worse.

I am quite happy to send them the documents they need but here are my problems –

I do not have a “Summary / diary of bookings and/or appointments you have taken or made”. I am not sure if this applies to me selling on Ebay – I don’t have any bookings or appointments. I have also never placed any advertisements. If I need to send them something I don’t know what it will be.

Invoices for work done – I sometimes send invoices to Ebay buyers who are slow to pay, but for the vast majority I don’t need to – I don’t know if this applies to me either. - you have paypal receipts and its in your history of all things sold so you can easily print off and provide information.

Receipts for any expenses paid – I have receipts for my stock sold, postage and packaging, Ebay fees, PayPal fees, but I usually count these in my Cost of Sales – would I have to send these or just receipts for my Overhead Expenditure? - send them anyway, its for them to decide what goes in which category.

Bank statements – will this be just bank accounts to do with my business or all bank accounts including ISA’s? Also, should I send a printout form my PayPal account? I also have a credit card I use for buying more stock, would they need that too? - all accounts linked with the business, ring them for clarification.


And the biggest worry for me is “A breakdown of the hours you worked per week”. I have kept no written record of my hours worked for that period or before it. Only recently have I started to keep a record of hours in case I got reviewed! I can say though that I have been working 30+ hours a week. I usually work every day of the week, Ebay has consumed my life! I’ve only had a couple of days off in the last couple of years! - then state that in writing.

I am unsure how I can prove my hours – I have receipts to show days I went to the post office and when I worked on listing items – I am not sure what they would need and how it would affect my claim. I never saw anything in the tax credit notes about having to keep a record of hours worked, they just wanted to know what hours you worked in a typical week. If I had known they needed a week by week record, I would have kept it. I only started keeping a record in the last month or so from reading about keeping a record of hours on a forum. - get a basic timesheet done, and tbh if youre self employed, you need to keep all this info.

Any help anyone can give me with this would be greatly appreciated. Like I said, I am especially worried about the record of hours worked. Has anyone else had a letter like this and were in the same situation?

Best thing to do would be to ring them, then to sort out your circumstances. Being self employed, you have to do all the things they have asked of you.