advice on underpayment of tax credits

Assun23

Can anybody please advise me.

I have not yet received my renewal form and when I telephone the helpline they say they cannot do anything until I do so. Basically I do not work and my partner is self employed, we have one child aged 3. I had to give an estimate for 2011/2012 income and said £26,000 as I didn't want to risk overpayment. We did my partner's self assessment at year end and he has infact made a loss. I assume that like in 2010/2011 (when he also made a loss) this will mean I have been underpaid and I will get a bulk payment. It is rather frustrating as I desperately need the funds but I am stuck till my renewal form comes through the letterbox! I am also not entitled to any tax credits since April 2012 because of the above estimate.

Can anyone who is in the know please confirm if I should definitely get this repayment and that nothing has changed in how it works? I believe that after April 2012 they only do back payments of a month but I assume that won't affect me here. I may have to ask my parents for a short term loan but would only want to do this if I knew I had some guaranteed funds coming to me.

Please can something help!

shedboy94

Assun23 wrote: »

Can anybody please advise me.

I have not yet received my renewal form and when I telephone the helpline they say they cannot do anything until I do so. Basically I do not work and my partner is self employed, we have one child aged 3. I had to give an estimate for 2011/2012 income and said £26,000 as I didn't want to risk overpayment. We did my partner's self assessment at year end and he has infact made a loss. I assume that like in 2010/2011 (when he also made a loss) this will mean I have been underpaid and I will get a bulk payment. It is rather frustrating as I desperately need the funds but I am stuck till my renewal form comes through the letterbox! I am also not entitled to any tax credits since April 2012 because of the above estimate.

Can anyone who is in the know please confirm if I should definitely get this repayment and that nothing has changed in how it works? I believe that after April 2012 they only do back payments of a month but I assume that won't affect me here. I may have to ask my parents for a short term loan but would only want to do this if I knew I had some guaranteed funds coming to me.

Please can something help!

What does he do that he has managed to make a loss for 2 years running??

If you have had no other income apart from CTC and CB, what have you been living off of?

joandkaz1

how do you manage to live if hes made a loss for the last 2 years? with no ctc ? how do you pay the rates and bills?

Assun23

He is a landscaper/ground worker and due to problems with customers not paying/weather conditions and other issues jobs have over run etc and cost him money. He does obviously get paid for certain jobs and obviously our living expenses have come first such as rent. He does have outstanding debts with suppliers etc. When doing the self assessment it works out as a loss. I'm not trying to commit fraud or anything hence not wanting to estimate lower incase we got overpaid!

joandkaz1

household bills and rents are not business outgoings though...so you cant use those in self assessments. i dont understand

shedboy94

Assun23 wrote: »

He is a landscaper/ground worker and due to problems with customers not paying/weather conditions and other issues jobs have over run etc and cost him money. He does obviously get paid for certain jobs and obviously our living expenses have come first such as rent. He does have outstanding debts with suppliers etc. When doing the self assessment it works out as a loss. I'm not trying to commit fraud or anything hence not wanting to estimate lower incase we got overpaid!

1st of all you can't take personal drawings to use as personal income and then declare a £0 income - otherwise every single s/e person would do the same.

I presume you are declaring to TC's that he is working X amount of hrs every week, I find it hard to believe anyone can work X amount of hours, every week for 2 years and make a loss - if he made a loss 2 years ago, where did the money come from that he 'lost' last year?

If he is having problems getting paid, why doesn't he get the money up-front?

joandkaz1

any money that he uses to pay for personal things like food, mortgage etc is income and not aloss in the eyes of the tax credit people.all my money goes on my rent and food but i cant declare my income as 0.

Assun23

Ok maybe I'm explaining myself wrong but this was my understanding:

His profit or loss is

Turnover (ie income from clients/customers)
less: purchases (ie cost of sales , purchase of raw materials etc)
less: running costs (ie rent, heat, light, telephone etc)

The balance is his profit or loss.

He has taken drawings from the business for personal use. They are not a business expense and so are excluded from the loss. However he still made a loss without taking these drawings into account.

Yes it isn't ideal and you are preaching to the converted. We are generally living robbing peter to pay paul. I have already given him an ultimatum to get a proper job. All I am asking is whether I am correct in thinking we are entitled to a backpayment of tax credits for the past year?

joandkaz1

how could he make a drawing for personal use if he was maing a loss though?? where was the money coming from? any money you have taken they will need to be delared I should imagine. If hes writing drawings as his wage then that needs to be declared.

Assun23

his drawings are declared on the self assessment. And there has been money coming in and out throughout the year, our living expenses have been priority but there are outstanding debts within the business.

joandkaz1

well then sureley that is a wage tax credits take into consideration. im sure those companies you owe money to have homes and chilren too!!!