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

shedboy94

At the end of the day, it is not a viable business you are running. In days gone by, going s/e was something most people did after a bit of research and drawing up a business plan with projections etc....nowadays however every Tom, !!!!!! and Harry seems to be s/e, yet no-one ever seems to make money from it.......
Would you do the work if you didn't receive WTC? Probably not because it isn't viable - it is more likely that you are doing the work BECAUSE you receive WTC.
Everyone knows Tax Credits is a joke system, designed by Labour to get people to work the least amount of hours and to become "s/e", thus creating a false unemployment figure.
Universal Credit will cut most of it out, and Tax Credits are now starting on that path in the lead up to it.

Magic_Fairy

There are lots of transactions on my account and I have been actively selling and trying to make a profit. Unfortunately after all the fees etc are taken into account I think I just about broke even. That does not mean that I was not working because I WAS. As it stands I believe Tax Credits are paid based on hours worked an not on income and I provided evidence that I was actively working. If you looked at my ebay invoices you would see that I was actively listing lots of items and I was making sales. The fact I did not make a profit last year is not evidence that I wasn't working.

If a person is not working the hours that they state and are commiting fraud then yes they shouldn't be able to claim Tax Credits, but I provided evidence to show that I WAS working and running an ebay shop.

I am not asking for any special treatment, however since my claim is based upon the fact that I am disadvantaged in the work place due to my physical disabilities surely they are supposed to take this into consideration when looking at my claim?

soolin

Unfortunately you need to look at this from a different viewpoint to understand why the decision has been made. I worked for a while in an advisory situation and when the rules changed for people without disabilities stating that 30 hours work was required in order to claim WTC and not the 16 as previously, everyone, and I mean everyone decided to run an ebay business.

It seemed at first as though DWP/HMRC would allow these claims without checking, but more recently proper checks are being made as to whether these are true businesses or not.

Even on this board people have been told that whilst a business might not be expected to make a profit immediately, it would expect to eventually make a profit and show a decent hourly rate.If this was not achieved then it isn't really a business- just a hobby that makes money (and still eneds to be declared of course for tax and NI purposes).

Realistically there is no point in running a business if it isn't intended to make money and at a reasonable rate. Some people have been told that DWP would expect an hourly rate approaching the minimum wage (although perhaps for home businesses that might be unrealistic for the first year or two) so even if they said a notional rate of £4 an hour the accounts should show £120 clear profit for a full week. Even £4 does not even begin to approach the minimum wage.

If you look at it like this and are perhaps only showing taxable profit of say £1 an hour- it doesn't look much like a business.

Magic_Fairy

OK, I can see that people on here are unhappy that I was claiming Tax Credits.

For the record, I originally claimed when I was working in a completely different field when my health was better than it is now, and the Tax Credits WERE a 'top up'. I then became an ebay seller and was also claiming Tax Credits as a 'top up'. It has only been recently that my business has taken a down turn and obviously I couldn't predict that (you can't know in advance whether you will make a profit or loss).

I am not proud that for all the hours worked I have nothing to show for it, in fact it is pretty demoralising. But it is even worse struggling against the odds only to find that NOBODY believes I have even been working!

I am more concerned about how I am supposed to pay the overpayment back since I am no longer receiving anything other than DLA.

I will still be trading on ebay regardless of whether I recieve benefits or not because I have worked hard on my shop for several years and hope that things will pick up for me. Claiming Tax Credits was not my motive for running an ebay shop. I do it because I am housebound and have a little bit of pride left and wish to do something constructive with my time and I also hope to support myself (as I did in the past).

And for those of you calling me a liar - I don't think that is very polite or fair. Until you have seen my accounts for yourself and seen the activity that has taken place in my shop you are just stating your opinion and not fact.

Sixer

OP - as suggested earlier, your best bet going forwards is probably to claim ESA and do eBay as permitted work.

As for appealing the overpayment, you *may* have grounds but it won't be easy as you'll need to satisfy you worked in "expectation of payment" for the full 32 hours. You will need proper advice from a rights officer. Here's a relevant thread:

http://www.rightsnet.org.uk/forums/viewthread/3032/

It may also be that you could ask for a notional entitlement calculation (ie you can get them to agree that you did 16 hours work and, as you're disabled, would have been entitled to tax credits, just not the 30 hour rate). This may reduce the overpayment.

This is a tricky area and I reiterate, you'll need advice and help with an appeal.

Personally, I would agree with those who say hobby businesses have become a loophole for tax credits entitlement. BUT, we should remember that in many cases, DWP themselves actively encouraged the creation of such businesses with the carrot of tax credits entitlement. So it seems unjust that HMRC are now cutting the ground from beneath claimants' feet. Typical fiasco from government organisations if you ask me.

mazza111

Just to reiterate what other's have said, you should really be claiming ESA and doing the ebay business as permitted work.

Not everyone on ESA has to go to meetings etc, this is only if you are place in the WRAG. In theory, if you're as bad as you say, you should be placed in the support group. I'm not denying your illness by the way, just that the powers that be in ESA and ATOS are mysterious beings and could either find you fit for work or place you in the WRAG, even if you think you should be in the support group.

Self Employment like ebay shops have quite rightly been seen as exploiting a loophole in Tax Credits.

Anubis_2

Magic_Fairy wrote: »

Hi. I sell a mixture of jewellery, make-up and vintage customised clothing items in my shop. The vintage clothes have to be washed and ironed, repaired, photographed, measured, described and the listing page has to be designed with the description, pics and details etc along with my terms and conditions etc. It certainly does not take 5 minutes to do a listing, I would say each one takes at least half an hour to an hour. As I said I am probably slower because of my disability but that does not mean I am not working.

Last week I sold £80 worth of goods (sales value), this week I have sold nothing. Yet the hours I have put in have been the same. I cannot force customers to purchase items from me but that doesn't mean I am not actively trying to sell.

The problem seems to be that I can't prove how long it takes me to wash and iron or repair vintage clothes, or how long I spend designing my listing pages, or how long I spend purchasing stock etc (I offered to provide evidence from my Support Worker and they were not interested)!

The Tax Office say I am trading yet the Tax Credit people say I am not! By the way, my Ebay business has been more lucrative in the past but due to failing health and the current economic climate last year was especially bad for me.

The Tax Credit Office have not yet sent the letter stating their reasons for stopping my benefit so I can't appeal the decision yet. However they have stated that they don't even believe that I work the minimum 16 hours which is a huge insult considering the struggle it has been for me to continue working with all my health problems. Surely they have to prove I am not working for 16 hours or more, they can't just say I am not? They refused to allow me to provide any further evidence that may support my case!

In bold. An hour for one listing is an extremely long time. Given the time it has taken you to type out your posts here, I find an hour extremely hard to believe.

Your page designs should be templates so are easily loaded in no time, the typing of the listing, judging the amount you have typed here should take you no more than 15 mins max.

Additionally, as last week you sold nothing, all you had to do this week was relist the items - and a couple of clicks relists them, taking all of a couple of minutes no matter how limited you are.

I can understand why tax credits would take issue, if you are claiming it takes you an hour to put one listing up, and I do think this is why they have stopped your tax credits, due to the time you are listing.

I am just letting you know how they will view it. You are obviously not slow at typing so I am bemused why it would take an hour?

How do you wash your vintage clothes? You cannot claim time for washing and drying as the washng machine does the job. Drying, if natural is nothing more than waiting, so you certainly cannot claim it takes you any business time to dry clothes because it doesn't. Waiting for clothing to wash and dry is not working time.

If you have stated you handwash them, this also may be curious to them and it will raise suspicions if you are stating you are so limited it takes an hour to do a listing, they will wonder how you are managing to hand wash at all, and it may go against what you claimed on your DLA form so be wary of that.

So washing (unless handwash) and drying, you cannot really claim time for. Fixing the clothes maybe, but I would imagine you are not going to purchase clothes that require a lot of fixing given your limitations. If you are stating they require a lot of fixing, again they may question why you are choosing to purchase clothes that require substantial fixing when you are stating you are disabled to the extent you are.

On the weeks you don't sell anything, your hours would be 10 minutes to relist. This means you have to make up another 32 hours, for each week you sell nothing. How can you claim your hours are the same when you sell nothing?

You wouldn't need to buy stock that week, as it would be foolish to do so, no washing, drying (which you really can't claim for) and no listing - only relisting. So explain how the hours can be the same?

You said last year was very poor for sales, so justifying 32 hours a week for last year will be near impossible.

If you can see where I am coming from, that what you state may be seen as contradictory - this is how HMRC will view it, and is the very reason I am "questioning" to show you what they are likely to be thinking.

Where you have gone wrong is telling them extortionate times - an hour per listing, claiming you still work 32 hours the week you sell nothing etc. This is far from realistic, disabled or not.

I will explain here that I am practically bedbound. I have several problems, doubly incontinent, experience a lot if pain, exhaustion, and heart issues, as well as asthmatic and I take a lot if medication. I am slow because of my disabilities and meds and have to reread everything. I rarely sleep. 20 hours a week if I am lucky as some of my night posting here will attest to. This makes things doubly hard.

However, I can honestly say it would not take me an hour to do a listing - I couldn't do ebay anyway tbh, although I do purchase from there. Even though I do not know your disabilities, claiming an hour for a listing can be viewed as not being entirely honest IMHO, especially given the timescale of your posts here.

If you feel you want to appeal then do so, but have a good think first and time yourself realstically because I don't think you have much chance of success with the timescales you are telling them. I am just being honest.

Magic_Fairy

I was trading in expectation of payment and WAS paid for the sales I made. Unfortunately after ebay fees, paypal fees, postage costs and the cost of the items themselves I made a loss that tax year. That doesn't mean that I was not trading in expectation of being paid. I was paid, I just didn't make a profit.

ESA is a fairly new benefit and I haven't claimed it because I was already claiming Tax Credits - in the past I was making a profit from my ebay sales. Also I was told I would have to attend meetings and training courses which I cannot do without a Support Worker which I no longer have.

Also, I have tried claiming other benefits in the past and was told I could only claim Tax Credits because I was running a business! I can't win!

shedboy94

Magic_Fairy wrote: »

I was trading in expectation of payment and WAS paid for the sales I made. Unfortunately after ebay fees, paypal fees, postage costs and the cost of the items themselves I made a loss that tax year. That doesn't mean that I was not trading in expectation of being paid. I was paid, I just didn't make a profit.

ESA is a fairly new benefit and I haven't claimed it because I was already claiming Tax Credits - in the past I was making a profit from my ebay sales. Also I was told I would have to attend meetings and training courses which I cannot do without a Support Worker which I no longer have.

Also, I have tried claiming other benefits in the past and was told I could only claim Tax Credits because I was running a business! I can't win!

Well that goes to show lack of business accumen - ebay fees and costs of materials should be factored into the price you charge - presumably your items are not auction lots? Postage fees.....surely your postage charges would cover the costs of postage??

Magic_Fairy

In response to Anubis. Thank you for your reply.

In the past my ebay shop was successful and I have a stock room full of stock. If items don't sell well I try to sell other items that I have which means I have to take new pictures, take new measurements, write a new description etc. The listing takes half an hour to an hour to do when I am uploading photographs, writing the description, measuring the items etc. I also seem to have a lot of problems with Turbo Lister because it doesn't run well on my computer. Yes, I am quite good at typing and I wish to God I could get a job doing that (if anybody knows of one please let me know)! Having said that I was unable to use my right arm for 2 weeks recently and had to prop it up on a pillow so even that can fluctuate!

I do buy new stock when I spot new trends that are selling well on ebay and I do generate sales. As I said before it was only in the last tax year that I made a loss.

I also have to wrap the parcels that I have sold and post them. I never said that I don't sell anything, only that I didn't make a profit last year.

I would prefer not to go into details about my disability but my symptoms do fluctuate. Sometimes I am bedbound and other times I am not and I provided medical evidence of this.

If the Tax Credit Office have decided I cannot claim Tax Credits any more, then I accept their decision. However I DID work the hours claimed and I will struggle to pay back the overpayment, and that is my main concern.