Child Tax Credit vs Working Tax Credit - small home business advice needed.

Laban_Boldero

Hi,

Thought I'd ask in these forums for some advice, as our home life is quite complicated.

I'm an artist and retained firefighter, receiving a very minimal wage from Norfolk fire and rescue service (on call 24/7 for approx 6K per annum)

Due to my wife having a tissue condition which prevent her from walking, working I have to stay home and care for her.

We DON'T receive any form of carer's allowance or disability living allowance as apparently a) She's capable of dressing and feeding herself, b) we 'waited to long to claim' (we used to have decent savings so never applied for any assistance unless we absoloutely had to).

I run a small busines from home, producing sculptures / lifecasting / props / costumes - this used to be a hobby until I had to find a way to make a living from home.

We have two children (eight and three) and currently receive child tax credit. We do receive a decnt amount as our household income is low - roughly 8K last year after expenses from the S/E business and 6K from the F/Service.

We are REALLY struggling..especially as none of us can go and get a 9-5, so it's reasting on us being able to work from home (LOOOOOONG hours and low pay).

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My question is this, should I ask about working tax credits....everything is currently in my name businesswise, however my wife does help me make items (casts props and masks etc) and we BOTH work well over 30 hours a week. We have always left all the income purely in my name (mainly to prevent filing additional tax returns etc).

My wife is unable to work a regular job, and will literally sit in bed or on the sofa and cast items where / when she has the strength to do so (which is often during the night, or at sporadic times during the day).

Should I register my wife as self employed - then 'hire' her as an independant commission artist?

This would mean...

* seperate tax return for her
* NO having to worry about PAYE, as she's not an employee
* Same HOUSEHOLD income
* potentially claim working tax credit.

I'm obviously aware that our Child tax credit would go down, but i;d rather be receiving help from the government for bieng a WORKER than just having kids. As long as we didn't lose out by doing this, I think it's worthwhile.

Any advice?

Notmyrealname

You should be getting WTC depending on the profit from your self employment. Your child tax credit would not drop.

sleepless_saver

She shouldn't be barred from DLA for "waiting too long to claim". She can claim any time and it may be worth doing that again. It doesn't depend on your other income and will not reduce your tax credits. Your earnings look on the borderline for entitlement for carers allowance depending how you allocate the self employed income between you, but worth checkingout if she gets middle rate care DLA or above.

I'd definitely claim working tax credits. Your post suggests you think it's either working tax credit or child tax credit. This is not the case. It's all the same form and lots of people have both.

I don't see why you can't just go ahead and claim WTC without the palaver of your wife registering as self employed and having to complete an annual tax return as a result. However at least one of you should be registered as self employed (you can be both employed and self employed at the same time).

rogerblack

sleepless_saver wrote: »

She shouldn't be barred from DLA for "waiting too long to claim". She can claim any time and it may be worth doing that again. .

It would be true that the OP has waited too long to claim, if his wife has reached 65 years.
If she truly cannot walk, then she is otherwise entitled to the high-rate mobility allowance at around 50/week.

If she has care needs - being able to 'care for yourself' isn't quite it - even if past the age of 65, a care component of DLA that will lead to carers allowance may be appropriate.

Carers allowance is paid if you have an income of under 100/week - however, crucially this is after various expenses, so they may still be eligible.

sleepless_saver

rogerblack wrote: »

It would be true that the OP has waited too long to claim, if his wife has reached 65 years.
If she truly cannot walk, then she is otherwise entitled to the high-rate mobility allowance at around 50/week.

I am assuming that with children age 3 and 8 she is a good bit younger than 65.