Tax credits- letter asking for more info

the_matrix

Sixer wrote: »

Type of work: simple typed description of the business. Sentence or two.

Summary: presumably, you keep a diary for your business. Photocopy a month's worth, so they can see a typical business period.

Adverts: you only need to enclose these if you have place any.

Breakdown of hours: this will be included in the diary copy as above.

Invoices: you need to keep these for five years anyway, so this should be easy. If car booting and everything is cash, provide them with a breakdown of sales attended and cash taken for each.

Receipts: you don't need any for raw materials, as you say you aren't paying for those. Otherwise, ticket stubs for car boot entries. Photocopies of any bills for which you're claiming all or a proportion of as expenses on your accounts (web hosting, telephone, internet, etc). Note any proportions for which you're claiming if not the full amount.

Vehicles: as they've asked for, together with a breakdown of business to personal mileage done, copies of insurance docs, tax discs, and fuel receipts (copies of credit card/bank statements with fuel purchases highlighted will do). Make sure you label it with proportions of business to personal mileage. But you only need to do this if you are claiming vehicle or fuel costs as expenses within your accounts.

Generally: be aware that HMRC are cracking down on low profit self-employed people who also claim the 30 hour element for WTC purposes. And that work done must have a reasonable expectation of payment (ie at least one bona fide customer). It may well be that they disallow the work on your website as that doesn't seem to be truly commercial at the moment. I fear you are likely to be hit with an overpayment of at least the 30 hour element.

For other low profit self-employed people with WTC claims reading this thread: beware of the 30 hour element. Unless you can fully document 30+ hours AND prove the work is done with reasonable expectation of payment, you may well be hearing from HMRC. This is one of many recent threads on exactly this topic.

Truly thank you for the info.

Lady_gaga

This is laughable!! you get stuff given to you that you make into things and sell at a car boot sale?
How would you manage if you had to buy the materials? This is clearly a hobby at best, tax credit scamming at worst, I know which I'd say it was...
Thankfully this kind of nonsense will be hard to get away with soon, along with the likes of the e-bay sellers who sell a pair of jeans a week but claim to work 30+ hours in order to get the maximum tax credits.