MSE News: Families with kids '£500 a year worse off' from Friday

miamoo

Sixer the compliance check at the moment are only for fully self employed people but in another 12mths time who knows what they will move on to, and I think this will be the next thing they start to look at.

If everyone who is affected by this uses self employment to cover the extra few hours, they may start to check into who is/isnt legit at some point in the future.
There is no harm in being extra careful now to prevent problems which could crop up in the future.
I was only trying to help with my advice, obviously if you want to do Avon then thats up to you, but personally I would choose something else.

jellyhead

But as long as you genuinely do the Avon round and keep all of the invoices then you are 'legit' aren't you? They should try to catch out anyone who is not actually doing an Avon round and is just pretending they are.

All self employed people run the risk of not making a profit, at least in the beginning. Shouldn't the government be encouraging of those why try self employment in the hopes that it will increase to something more ... a big Avon round or area manager job for example.

Sixer

miamoo wrote: »

I'm not saying that its a no-go. I was just pointing out there could be a possible issue in the future.
If everyone just says ok I'll do avon for an extra 2/3hrs a week, then I'm sure they will put a stop to it (the same as they have now with the S/E) and you dont want to get caught out in the future.
I would look at another option where you are actually doing remunerative work, such as Mystery shopping, leaflet drop, cleaning, paper round as suggested, then you can be sure there is no come back.

You're missing the basic point of the compliance checks. For starters, NMW isn't applied to self-employment and HMRC are only using it as an illustration of the likelihood of work being remunerative. Avon rounds are clearly remunerative if you are only declaring a couple of hours. They are not clearly remunerative if you are earning tuppence AND claiming tax credits for working 30 hours AND it's your only source of income AND yours is the only household income.

These checks are risk assessments, based on the likelihood that someone is lying about the number of hours they work in order to qualify for tax credits.

It's highly unlikely, therefore, that someone who is employed for, say, 22 hours, then adds a few quid and a few hours in self-employment from an Avon round would trigger risk flags. Why should they? They're employed for ALMOST the threshold and they've got up off their a*se and added another couple of hours work. So they're clearly entitled.

Also bear in mind that many low-profit self-employed people (those who keep proper records, who are in the early stages of a business, etc) are compliance-checked and pass it. So they maintain entitlement to tax credits despite the low profit.

HMRC are absolutely NOT running around applying NMW to all self-employed people who declare less than NMW in profits and disallowing their tax credit claims.

1) that would be illegal
2) compliance checks only done when risk assessment software flags potential fraud
3) NMW is only used as one facet in an overall burden of proof regarding remunerative work

leveller2911

NewCustomerOnly wrote: »

None of that matters any more, it's all over for this uneducated and inexperienced administration - once voters have seen through the spin they make their feelings known on election day! Better off to have a proper government that at least tries to help, rather than a botch job coalition. The Tories didn't win!

Now theres a phrase commonly seen 3 or 4 years ago..

I genuinely feel sorry for you being brainwashed by a political Party..I mean you rattle on about how Nu-Labour cared about people, did they care when they introduced over 130 new stealth taxes?, did they care when they handed out more in Benefits than they received from the entire income tax revenue? good economics? . Did they really care when they nigh on bankrupted the country?, did Gordon Brown care about peoples Pensions when he stole £6 Billion from the pension funds....

Nu -labour encouraged people to either not work and receive more benefits than many who worked hard could only dream of or they encouraged people to work no more than 16hrs a week to qualify for tax credits .

Lets be honest here the majority of jobs created under Nu-labour were Public Sector jobs and NOT wealth creation.Nu-Labour prostituted themselves to the banks, allowed the banks to control policy ....

Personally I hate all political parties,the MP,s we vote in should work for us and not their Parties , you need to wake up and smell the coffee and not only see where the Condems are failing but come to terms with the fact that your party ,Nu-labour messed up on a massive scale ....

Oh and just to educate you some more in the General Election of 2005 Nu-labours share of the vote was 35.2% the lowest share of the vote ever recorded by the winning party at a UK General Election , thats means more than 6 out of 10 people didn't vote for Labour so they did'nt win that Election ,just like the Tories didn't win the last one.....Wakey,wakey , bothe Parties are different faces of the same coin.

miamoo

The majority of the cases are where people have been claiming the 30hr+ and are only S/E so I see what you are saying, yes I agree that if someone is only needing 2hrs work then avon could be a good option.
But the question above was someone who needed an extra approx 7hrs a week. From what I read recently it seems that you will be assessed as earning NMW in the future for S/E and I dont know if that applies to people who need an extra X number of hours to reach the tax credits level.
If that was case then thats approx £168 a month that they would either have to earn or they would be that amount down. Its alot to earn from Avon, especially when starting out. I only posted to suggest that mystery shopping could be a better alternative.

Sixer

miamoo wrote: »

The majority of the cases are where people have been claiming the 30hr+ and are only S/E so I see what you are saying, yes I agree that if someone is only needing 2hrs work then avon could be a good option.
But the question above was someone who needed an extra approx 7hrs a week. From what I read recently it seems that you will be assessed as earning NMW in the future for S/E and I dont know if that applies to people who need an extra X number of hours to reach the tax credits level.
If that was case then thats approx £168 a month that they would either have to earn or they would be that amount down. Its alot to earn from Avon, especially when starting out. I only posted to suggest that mystery shopping could be a better alternative.

No self-employed person is going to be penalised regarding tax credits purely for earning less than the equivalent of NMW in self-employment. Nobody is being penalised purely for this now and they won't be in the future. NMW is only being used as a "common sense" piece of evidence - one among many - in cases where tax credit fraud is suspected.

The suspicion is raised by using risk assessment software. A person would need to raise more than one flag to trigger a compliance check.

For example, a person starting a business who was declaring 30+ hours on a CTC/WTC claim and reporting a profit equivalent to significantly under NMW would be likely to trigger a compliance check if they had no other income and were the household's sole earner. BUT, if they were married and their partner was working full time OR if they were a singleton who was also working in employment, they would be very, very unlikely to trigger one.

NMW is a complete red herring with regards to tax credits. Nothing is based solely on NMW. Providing a self-employed tax credits claimant can prove they have engaged in remunerative work for the requisite number of hours, then they're entitled, no matter how low their profit.

An Avon round is absolutely no different to mystery shopping. I can't imagine why you'd think one is different to the other. An Avon round has a delineated area which can be proved by Avon official documentation. It's easy to demonstrate how long it would take to deliver the catalogues and collect the orders weekly, to pack the orders, and to file the paperwork for them. All orders - and therefore financial data - would be accessible via Avon and not just the claimant. An Avon round would be a perfectly acceptable way to increase hours worked to improve tax credit entitlement. It's belt and braces with regard to the condtions for remunerative work, and what's more, for proving how much work has been carried out.

Universal Credit, still some way off, is likely to set cash thresholds for claimants based on NMW for the employed and self-employed alike, but this has nothing whatsoever to do with the current tax credits regime. Nothing at all.

zagfles

thelawnet wrote: »

A couple will now also have to work at least 24 hours a week, up from 16 hours for a single person, to qualify for a working tax credit.


Labour also says a minimum wage-earning couple with two children would end up better off quitting work altogether unless they could do at least 19 hours per week between them.

What does this mean?

Again, the Daily Mail tells us better:

It means up to 212,000 working couples earning less than around £17,000 a year will lose close to £4,000 – all their Working Tax Credit – if they cannot increase their hours at work. A couple with two children on the minimum wage could be better off quitting their jobs and going on benefits if they cannot work at least 19 hours per week.

Even the Daily Mail are swallowing Labour propaganda :eek:

A few facts:

Nobody on £17000 will lose WTC as a result of the hours threshold change. People on above £15860 are unaffected.

The vast majority losing WTC will lose less than the maximum amount (£3870), becuase the vast majority don't get the maximum amount in the first place.

The vast majority who do lose the maximum amount will be entitled to other benefits/increased benefits to make up some of their loss.

Note the COULD, not WILL as the article here says.
"It is astonishing that the people making the smallest contribution to deficit reduction are in the richest half of the population.
"Ordinary families and children are now carrying the greatest burden of deficit reduction."

No idea if this is true or not, but again it's irrelevant.

It's true that familes with children are hardest hit. It's also true that pensioners are least hit, despite the so-called "granny tax".

The rich vs poor argument is rubbish, or disingenuous at least. See the IFS's analysis, which includes all the changes made by this govt and those yet to come in. According to them, when the UC is up and running the poor will lose least and the rich will lose most in % terms, although shorter term there's a bit of a bell-curve.

http://www.ifs.org.uk/budgets/budget2012/budget2012robjoyce.pdf

PurpleJay

Miamoo - I can't understand why you think Avon is not remunerative work?!

If you hit the minimum order target set by Avon you can get 25% of total sales. I appreciate this depends on whether or not you get any orders but that depends partly on how much effort you put in. It can be quite a good one to run alongside an employed position as you can pick up customers at work in addition to friends/family and territory.

I spend 6-10 hours per week on it in addition to my main job. This campaign, my third one, I got 20 orders from customers which came to around £260 which means £65 gross profit. From this I have to deduct any purchases such as brochures, bags, order forms, samples, demo products etc so clearly I am not making a fortune but each campaign it is increasing and as I become more time efficient I hope to increase my territory and customer base. Add what I am making to the fact that I get discounted products and continue to keep my working tax credit you can't go wrong. I agree with Sixes - I think this is what the government wanted - for people to get off their bums and try and earn a bit more for themselves.

I will have my order forms, invoices, customer book and diary of hours spent so if anyone asks I will be able to show what I have done. When I informed the tax credit people near the end of march about a month after signing up to do Avon, they asked what I expected to make from it in the tax year up to 5th April 2012 and I said probably nothing. I was able to give them my earnings from my part time employed job which is just over 11K. They were fine with that and asked me to contact them in the new tax year with my estimated earnings for 2012/2013 for both jobs which I will do soon. I just needed to see how it was going first with Avon to estimate what my earnings will be.

In answer to someones point about the couple who work 22 hours - could one of them spend 2 hours per week doing Avon? Yes they could - although they may find they need to put a bit more time into it if they are going to work territory.

Hope this helps someone.