Working Tax Credit Stopped

HappyMJ

lovetowinacar wrote: »

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

So are they really working or not? I don't call 30 hours long hours. It can be done in 4 days at only 7.5 hours per day that's only 80% of a full time job. When travelling time is taken into account in can be done in 3 days if it takes an average 1hr 15mins to get to the client. It isn't a requirement to build the business. In fact many of the expenses incurred in building the business to make it bigger are disallowed by the council for housing and council tax benefits. The HMRC can look at my books any time they want. One of biggest expenses for me is travel 10,000 miles at 45p per mile is £4,500 per year. As the client's premises is 25 miles away then it is a valid expense. The HMRC cannot call that unreasonable.

Sixer

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.

Tax credit withdrawals are at 41% - or 76% gross of income tax and NI.

At present, a single self-employed person who declares a profit of less than £6,420 per year will get £36.92 per week WTC. If they declare working hours of 30 or more, they'll get £52.11 per week.

The problem with this is that there are unrealistic businesses being kept alive by tax credits and semi-fraudulent claimants who decide their Avon round or birthday cake business takes 30+ hours per week when it doesn't. These claimants avoid the conditionality of JSA for not incomparable levels of benefit.

But on the other hand, everyone must remember that businesses take time to build, there are genuine businesses that have bad years, disabled people for whom low-income self-employment is the only viable option (and better for them to be subsidised by tax credits than to be entirely divorced from the working world) and certain industries (eg agriculture) which will be penalised if the solution is the type of blanket one being proposed by UC.

I don't think any sensible person believes an Avon round should exempt an unemployed person from signing on. But the solution isn't cut and dried. You close one loophole, you take away opportunity to work from others.

HappyMJ

Sixer wrote: »

Tax credit withdrawals are at 41% - or 76% gross of income tax and NI.

At present, a single self-employed person who declares a profit of less than £6,420 per year will get £36.92 per week WTC. If they declare working hours of 30 or more, they'll get £52.11 per week.

Yes and 65% housing benefit and 20% council tax benefit.

£52.11 per week tax credits or £67.50 per week to claim JSA. For a loss of £15.39 per week I'd rather do anything to stay on tax credits even if that means doing non profitable work. I can even earn as you say up to £6,420 per year.

Oldernotwiser

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?

I wonder whether JSA style conditionality will include engaging with the various work experience programmes?

Oldernotwiser

HappyMJ wrote: »

It's pointless earning any more as the benefits reduce by 96 pence in the pound. .

And that, in one short sentence, says it all! The sooner there's a major crack down the better.