Working Tax Credit Stopped

Sixer

Icequeen99 wrote: »

It certainly doesn't appear that it will be a compulsory assessment, even more complication and better off calculations.

IQ

Quite. So, someone such as Happy earlier in the thread, who is making £37.50 a week profit will have a choice:

* submit to JSA-style conditionality for jobseeking (presumably signing on, presumably proof of applications/steps taken) and receive UC based on the £37.50.

* receive UC based on the notional income (likely to be 35 x NMW)

That's how I read it?

Icequeen99

Sixer wrote: »

Quite. So, someone such as Happy earlier in the thread, who is making £37.50 a week profit will have a choice:

* submit to JSA-style conditionality for jobseeking (presumably signing on, presumably proof of applications/steps taken) and receive UC based on the £37.50.

* receive UC based on the notional income (likely to be 35 x NMW)

That's how I read it?

Yes, that is my current understanding except the notional income, according to Lord Freud at committee stage, will now be equal to whatever an employed person in similar circumstances earns rather than simply x NMW. Lots of interesting questions then arise about what does 'similar circumstances' mean for the comparison and whether there are any geographical considerations taken into account (e.g. if a plumber earns more in London than Newcastle for example).

An it looks possible that there will be an exception to this when you start your business and possibly if you hit a bumpy spot.

IQ

Sixer

Icequeen99 wrote: »

Yes, that is my current understanding except the notional income, according to Lord Freud at committee stage, will now be equal to whatever an employed person in similar circumstances earns rather than simply x NMW. Lots of interesting questions then arise about what does 'similar circumstances' mean for the comparison and whether there are any geographical considerations taken into account (e.g. if a plumber earns more in London than Newcastle for example).

An it looks possible that there will be an exception to this when you start your business and possibly if you hit a bumpy spot.

IQ

Good lord. So NMW for conditonality generally but not for the self-employed? I can see the rationale for NMW - it's simple and easy to apply. But "similar circumstances"? A recipe for errors, tribunals, and unnecessarily high admin costs, surely.

Icequeen99

Sixer wrote: »

Good lord. So NMW for conditonality generally but not for the self-employed? I can see the rationale for NMW - it's simple and easy to apply. But "similar circumstances"? A recipe for errors, tribunals, and unnecessarily high admin costs, surely.

Yes, i most definitely agree.

IQ

jezabel

Hello, I am wondering when they consider it non renumerative Work, I am under review myself and I am pretty concerned.

I have been reviewed January to April 2011 and I did not earn much on January, on Febuary I earn more than £300 and on March more than £200. It is not much but it is quite difficult to find good products to sell and I research the online market to find something that could help me to increase my income.

Does anyone knows what is renumerative work for them?!? Surely at the moment I cannot cover all my costs...Thanks for helping me out Liz

BigAunty

How many hours do you need to work to qualify for WTC and can you prove the time spent? Are the sums you provided for the period the profit (after expenses deducted) or the turnover?

CIS provided a useful link to the HMRC site that describes renumerative work.

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM02400.htm

"If the person is a self-employed earner, work carried out other than as an employed earner for a reward or profit....

The payment made must be in return for work done and not for another reason. The work can be as an employee, a self-employed person or as a director of a limited company. Work done on a therapeutic basis can also be treated as qualifying remunerative work, provided it is done in return for payment...

The hours that may be counted as being spent in work by a S/E earner include:

• those which will be costed to the client as spent in providing the individual order or service and
• those spent in activities necessary to the employment.

Examples:

• trips to wholesalers and retailers
• visits to potential clients
• time spent on advertising or canvassing
• cleaning the business premises
• cleaning a vehicle used as part of the business, for example a taxi or a driving school car
• book-keeping
• research work, for example where the person is an established author"

supersaver09

scorpio13 wrote: »

They are now saying i am not entitled to any Tax Credits, as i don't do Renumerative work and i owe them over £2,500!

That's just what you need right before Xmas!
Hope you get it sorted.

lovetowinacar

I could never understand why someone would work 30+ hours a week and not make money until I spoke to someone who said it has become common practice for people to say they work 30+ hours to get the maximum working tax credits and then only earn a pittance so claim the largest amount of working tax credits they can.

Now... I could understand this if a business is in early days and being set up and it would take some time to earn a profit but... a growing trend of "I work 30 hours a week and I make no money" and therefore claim WTC - doing Avon, writing books etc etc etc whilst some (not all) appear to be doing very little but avoiding "actual work" whilst gaining WTC meant for low paid people who do work.... I believe that Inland Revenue are cracking down and want to see at least national minimum wage being received for the supposed hours being claimed to be working.... I can understand this and....

In any event why would someone want to year in year out run a business... promote a business...spend each day every day "working" and yet receive no or extremely little pay? Some do do this to sit on bum all day and avoid being chased to actually work whilst others are genuine and really are starting up a business and not yet making money - the problem is should the taxpayer subsidize people who don't actually earn anything much to continue going on doing what they "do" and continue to not actually earn much - they are really on benefits afterall and so the lack of earnings for what is claimed is a large amount of work needs checking from time to time... perhaps some people need to reassess how useful/successful their self employment actually is and look for new direction that actually means they will support themselves rather than benefits supporting them for ever and ever and ever

HappyMJ

lovetowinacar wrote: »

I could never understand why someone would work 30+ hours a week and not make money until I spoke to someone who said it has become common practice for people to say they work 30+ hours to get the maximum working tax credits and then only earn a pittance so claim the largest amount of working tax credits they can.

Now... I could understand this if a business is in early days and being set up and it would take some time to earn a profit but... a growing trend of "I work 30 hours a week and I make no money" and therefore claim WTC - doing Avon, writing books etc etc etc whilst some (not all) appear to be doing very little but avoiding "actual work" whilst gaining WTC meant for low paid people who do work.... I believe that Inland Revenue are cracking down and want to see at least national minimum wage being received for the supposed hours being claimed to be working.... I can understand this and....

In any event why would someone want to year in year out run a business... promote a business...spend each day every day "working" and yet receive no or extremely little pay?

It's pointless earning any more as the benefits reduce by 96 pence in the pound. When universal credits come in it's supposed to only be 65 pence in the pound reduction. It'll be worth earning more then. I do make plenty of money but the expenses cover my travel expenses to and from the clients premises which is a valid deduction. Those travel expenses pay for the capital cost of the car, the business insurance on the car, tax and MOT. Private mileage is minimal but all I need to pay for is a bit of extra fuel. It also covers many other small expenses such as broadband which as an employee I would have had to use after tax salary to pay for or even a new smartphone would be nice to have. It's all business expenses and I maximize them to reduce my profit.

lovetowinacar

HappyMJ wrote: »

It's pointless earning any more as the benefits reduce by 96 pence in the pound. When universal credits come in it's supposed to only be 65 pence in the pound reduction. It'll be worth earning more then. I do make plenty of money but the expenses cover my travel expenses to and from the clients premises which is a valid deduction. Those travel expenses pay for the capital cost of the car, the business insurance on the car, tax and MOT. Private mileage is minimal but all I need to pay for is a bit of extra fuel. It also covers many other small expenses such as broadband which as an employee I would have had to use after tax salary to pay for or even a new smartphone would be nice to have. It's all business expenses and I maximize them to reduce my profit.

There are alot of people who say they work long hours at their "business" whilst earning a pittance to gain the maximum in benefits - these individuals will be investigated more and more and asked to prove they work x hours, show what they are doing to build their business - afterall the country cannot afford the level of benefit income it pays out and this is another way people of found of living on benefits - by the way the revenue can look at your books at any time and decide if you expenses are reasonable or whether the individual is claiming too much in deductable expenses