Disabled Ebay Seller's Tax Credits Stopped - Advice Please!

Sixer

bestpud wrote: »

The OP may well have avoided this situation if they'd stuck with 16 hours. Claiming 32 hours for little income in previous years and no income the last year is probably what caused her claim to hit the radar.

Anecdotal evidence (threads on here and elsewhere) I'd say that's right. I haven't seen anyone with a 16-hour claim posting with this issue. But only single parents and the disabled could actually claim WTC on 16 hours.

Sixer

Herongull wrote: »

How do you decide when you have an income-generating hobby and when are you self-employed? Is it based on how many hours you spend or is how much income is generated? .

If the ebay shop only generated very modest incomes in the past (eg a few thousand or less) and last year generated no income, then it will be difficult for you to claim that it is a business not a hobby.

To meet the "be in qualifying remunerative work" condition for WTC, self-employed claimants must have at least one customer/have made sales before being eligible:

http://www.hmrc.gov.uk/manuals/tcmanual/TCM0124080.htm

So you can't, for example, sit at home trying to write the next Harry Potter and get tax credits for it if you haven't been published. You can't say you're a web designer and claim tax credits for it if you've just put up a website saying that you're a web designer but haven't actually designed anyone's website (for money) yet.

The OP is making sales. The tasks she describes are - according the HMRC's own definitions, in expectation of payment.

90% of this thread is wrong and irrelevant.

The ONLY thing the OP needs to evidence to HMRC's (or a tribunal's) satisfaction is that the tasks she describes take HER (not Joe Public or anyone else) 30 hours or more each week. Nobody on here except the OP knows how long these tasks take her.

Presumably, she can evidence this by recording herself doing one of each task type for a base timing. She can then multiply these base timings by the number of tasks completed as proved by her eBay account pages. A large proportion of her work could be evidenced in this way.

Weary_soul

Judging by the examples I've followed on Rightsnest just claiming 16 hours doesn't exclude you from being targeted, in fact from what I can gleam It maybe be one of their reasons why some are targeted.

The ONLY thing the OP needs to evidence to HMRC's (or a tribunal's) satisfaction is that the tasks she describes take HER (not Joe Public or anyone else) 30 hours or more each week. Nobody on here except the OP knows how long these tasks take her

Exactly. Well said.

Herongull

So anyone with a hobby that they spend lots of time on, provided they make at least one sale can claim WTC for their hobby?

A painter sells one painting (perhaps to family or friends), a writer sells on article to a magazine or self-publishes a novel on Amazon and makes one sale, or an angler who sells one of his fishes.

Woohoo! Good news for people who have hobbies!

Sixer

Herongull wrote: »

So anyone with a hobby that they spend lots of time on, provided they make at least one sale can claim WTC for their hobby?

A painter sells one painting (perhaps to family or friends), a writer sells on article to a magazine or self-publishes a novel on Amazon and makes one sale, or an angler who sells one of his fishes.

Woohoo! Good news for people who have hobbies!

Depending on how many hours they work. There are regulations and tests surrounding these issues. I - and Icequeen and others - have explained them at length on here. Provided a claimant meets the qualifying remunerative work and realistic expectations tests, then they can claim WTC if they work more than 16/30 hours.

Look. This is an advice section of the forum; not a discussion section. The OP has asked for advice, not for a discussion on whether tax credits, DWP and/or HMRC are super-duper, useless, wrongheaded or anything else.

The OP is looking at a £6.5k debt with no means of repaying it. Can we not at least ensure the thread gives her the best advice on dealing with this based on the regulations as they actually are, not as we think they ought to be. If inspired by the OP to discuss the wider implications of low income self employed people and tax credits, we can go to DT.

Dognobs

So se wants advice on how to get out of paying £6500 she owes because she has had it good for too long?

FBaby

But you can then manipulate the hours as you see fit. It takes me 2 hours to do the main chores around the house because I do it as quickly as I can so I have time left for the other things I need to do. If I was to be paid to do the same thing I could very easily make it last 6 hours! Surely choosing to do things at slow pace knowing that it will result in a higher income to do so is manipulating the system?

Herongull

"There are regulations and tests surrounding these issues."
Exactly

"Provided a claimant meets the qualifying remunerative work and realistic expectations tests"
Exactly

But the tests and realistic expectations test will need to distinguish between a viable business and a hobby. In order to satisfy these tests she will need to show that her expectations of generating substantial income were realistic, not optimistic.

You do the claimant a disservice by claiming that just making one sale and spending lots of time trying to generate income is sufficient.

She is in a difficult position with a big debt to pay off if her appeal is unsuccessful, so let's try to help by flagging up the issues which she may need to address and take professional advice on, rather than say reassuring but misleading things.

Sixer

Herongull wrote: »

But the tests and realistic expectations test will need to distinguish between a viable business and a hobby.

Wrong. They need to ascertain the OP has a business (assuming her posts to be accurate, she does - buying clothes and selling them for a profit on an ongoing basis), and that the tasks she has claimed WTC for are tasks in expectation of payment (assuming her posts to be accurate, all tasks she has described fall precisely into HMRC's definition of tasks in expectation of payment).

Herongull wrote: »

In order to satisfy these tests she will need to show that her expectations of generating substantial income were realistic, not optimistic.

Wrong. Substantial doesn't come into it. Levels of profit don't come into it.

Herongull wrote: »

You do the claimant a disservice by claiming that just making one sale and spending lots of time trying to generate income is sufficient.

I don't claim this. You claimed it by talking about writers and artists. I answered explaining why writers/artists/tradespeople need to show at least one customer. This isn't relevant to the OP who has a retail business with regular sales.

Herongull wrote: »

She is in a difficult position with a big debt to pay off if her appeal is unsuccessful, so let's try to help by flagging up the issues which she may need to address and take professional advice on, rather than say reassuring but misleading things.

I do not intend to reassure the OP. For all I know, she only takes five minutes to do all these tasks and has been fibbing to HMRC for all she is worth. I am not misleading the OP - you are! I am explaining the regulations as they ARE and suggesting ways she can evidence her hours. You are posting with no relation to the regulations and rules - I understand you see what you say as common sense, but appeals don't stand or fail on common sense; they stand or fail on the regulations.

Felicity

You have my sympathies OP but ... taking this down to the basics ...

You have a business that doesn't make any money. It is no viable for you.

You need to diversify and find a product line that would make you money or quit the business.

Why would you continue to operate a loss making business (which apparently has no exit costs) other than to gain from the benefits system?