Self Employed, no set hours and Working Tax Credit. Help Please.

ACon

Its impossible to know how many hours he will do each week, thats why we never claimed before, for fear of getting into trouble, but the weeks we claimed before the end of the tax year he had a job confirmed, and knew we'd get at least 16 so claimed at 16, though he probably did more. Then when it stopped we werent sure again so didnt claim. I can confidently say he worked "over" 30 hrs for the last 3 weeks including driving, so we've claimed for those, and *hope* he will continue to physically work around that with driving hours on top, and if not we can top it up with "admin" etc.

kezlou

Eaxactly thats why we just gave an estinmate of what he may earn in a year.
We've only just gone self employed, the business only started back in November 2011. Luckily we already knew we could claim admin etc in his hours. Due my partners former employer telling him all about it.

Keep all your recepits for fuel, clothing, tools, insurance, mobile phone,everything.

Oh and don't forget you can claim housing benefit and council tax benefit. even if you think you can't get it. Just apply and see what happen. We've been granted them both.

I don't know the inland revenue will be able to do.We spend an awful lot of time doing admin and phoning around. But we'll sort it out when we come to it.

ACon

He started in Oct 11 and its all new to us, hes awful at keeping records so I (attempt to) do that side of it.
We do claim HB and CTB, we initially gave an estimate of expected earnings, and sometimes make declarations of nil income on bad weeks and they back pay us. Its annoying and slow but usually works out.. They owe me 5 weeks at the moment but claim they are paying tomorrow, watch this space lol.
Thankfully things are looking up now, this time of year it all perks up a bit... lol Soon its going to be me becoming self employed too and it scares the crap out of me....

kezlou

Its the same here, the construction industry is feeling the strain at the moment.

Its scary though isn't it when you first start out, i help my OH with ordering and the admin. so i'm slowly learning the jargon.

I might be going self employed soon so hopefully by then we should be sorted, fingers crossed.

Haha you'll be luckly lol we waited four months for them to pay us lol

Icequeen99

[QUOTE=ACon;

As far as proving it goes, well they are going to have a job making all self employed people prove the hours put in, especially if its at home.[/QUOTE]

The point i was making earlier though it is extremely difficult to prove the hours, so as a result HMRC are stopping the claims and asking for all of the payments in the last two years back.

As I say, through work, I am dealing with several of these appeals where exactly that has happened.

So the emphasis is on the claimant to prove it, if they can't, HMRC will go ahead and make the decision anyway.

To the other person who asked how you prove it, best advice is to keep a diary that documents the hours worked and roughly what you did in those hours and note anything that proves the hours e.g print out emails making appoints, keep a mileage log, keep good records generally. if you spend 2 hours delivering flyers keep a copy of the flyer, your order for them and note down where you delivered them. These are just examples but you get the idea.

HMRC are working their way through the self-employed case-load and checking claims so best to prepare now.

IQ

NoBS_2

I feel for you ladies I really do as my husband was in the building trade when the recession hit before and changed career.

I am glad you got help with regards working out the hours you can claim - ie driving to jobs, actively looking for work and working out accounts, cleaning work clothes, taking care of materials, buying materials, dealing with merchants/site managers etc.

With regard proving hours at home, it works simply - self-employee says they work 5 hours a day. HMRC ask doing what. Then they look realisitcally at that and see if what the claimant said would take 5 hours if they were working as an employee, one example.

As ice queen said, keeping a diary is a fantastic idea. It doesn't have to be War and Peace - just a simple breakdown of your day.

Glitterpix eg - shopping for stock and materials, making the jewellery, postage and packaging your items, listing them for sale on the site, taking items to post office, dealing with enquiries from your buyers, emailing suppliers. The list would be much more but that's a rough guide.

System

Icequeen99 wrote: »

To the other person who asked how you prove it, best advice is to keep a diary that documents the hours worked and roughly what you did in those hours and note anything that proves the hours e.g print out emails making appoints, keep a mileage log, keep good records generally. if you spend 2 hours delivering flyers keep a copy of the flyer, your order for them and note down where you delivered them. These are just examples but you get the idea.

HMRC are working their way through the self-employed case-load and checking claims so best to prepare now. IQ

The highlighted part is particularly important. If you are including time spent driving from site to site, client to client in your hours worked for Tax credit purposes then there should be a corresponding mileage expense on the end of year Self-Assessment tax return and a mileage log to back it up.

fogartyblue.

ACon wrote: »

As far as proving it goes, well they are going to have a job making all self employed people prove the hours put in, especially if its at home.

That is not the problem of HMRC.

It is for the claimant, you, to prove to them that you can physically account for those hours backed up with evidence. If you can't, the WTC will cease and more than likely you will have to repay all of the credits received from when you started to claim or started the business whichever is the latest.

You can appeal, but you will still have to prove it!

lovetowinacar

Could I also point out that the expectation sometime in the future will be that if you say you work 30 hours per week then a minimum wage equivalent will be used for income... not sure when this is being introduced - someone on here will know when.

The problem is some self employed people say they work 30 hours and earn virtually nothing and gain maximum working tax credits and avoid looking for employment etc, signing on and effectively are pulling a con... an avon round that takes 30 hours a week etc etc (nothing against avon this is an example but could apply to any type of self employment - the carpenter who spends 29 hours a week looking for work and 1 hour on actual work has been able to carry on like this for several years now... the tax office see a lot of these high hours very low profit if any.

Whilst many people are genuine the increase in the number of this type of claimant means that either there are a lot of people happy to work for nothing or there are some people using the tax credit system to do little and gain benefits whilst not actually having to sign on etc etc - I understand that this is well understood by HMRC and hence the anticipated changes to assumed income in the future...

Sixer

Glitterpix wrote: »

how do you go about "proving" your hours?
Im recently self employed, I run a shop on etsy where I make accessories & laser cut acrylic jewellery.

I give myself set hours every day to work, and so I know I do exactly 25 hours, but how does one prove this if asked? I mean, you could write it all down, but so could a liar...

just wondering if anyone does anything specific? x

As Icequeen notes, there are quite a few compliance checks going on at the moment. Some people are having their tax credits withdrawn. See this rightsnet thread for a self-employed potter in similar circumstances to yours:

http://www.rightsnet.org.uk/forums/viewthread/1956/

It'll be worth seeing if appeals are successful.

For those working in construction, I think you're less likely to suffer compliance checks - unless your income is VERY low - as HMRC are known to include occupation type within risk assessments and are much more familiar with this type of work than with others. Having said that, they have targeted plumbers before - but this was for genuine tax returns rather than tax credits compliance:

http://www.bbc.co.uk/news/business-12613836