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

recoverydust

Dunroamin wrote: »

It's equally valid to argue that the system is being tightened up because of the number of people who have been abusing it. This is particularly the case where people on JSA are using the WTC system as a way of avoiding the Work Programme and other back to work schemes..

Given the iniquities of workfare, and the ease with which sanctions of a whole family's income can be enforced for up to six months for missing an appointment or being late, it is no surprise that peoplenwill choose to be self employed and claim workingmtax credit.

After all when did the self employed and working get the amount of abuse and stigma enjoyed by those who are either to disabled to work or unemployed.

Using the system that allows you to choose to be economically active and supports you in difficult times or using the one that forces you to work for no pay in multinational companies or face humiliating and repetitive "fitness to work" assessments.

The OP was not abusing the system, she was using it how it was set up to operate and has now got caught up in the govts desire to claw back in work and out of work benefits

Don't mention the tax breaks for the very rich, over vodaphones tax fraud :eek::mad::eek::mad::eek:

Icequeen99

Anubis wrote: »

A pair of earrings would not take an hour would they?

Clothing I presume you buy knowing the measurements? Or is it all sold to you unmeasured?

Half an hour is a much more realistic but generous time accounting for your disabilities - an hour can not be taken seriously by HMRC.

Now if you list 8 items per week, and you are including measuring etc in your listing time, that's 4 hours. What do you do for the other 28?

More importantly on the weeks you sell nothing and relist, what do you spend 32 hours doing? HMRC will definitely not believe you do anywhere near 32 hours for the weeks you don't sell.

But the weeks she doesn't sell are irrelevant if she is listing things for sale. The legal requirement is that she is working 'in expectation of payment/profit' which is not the same as whether anything is sold. If she is placing items for sale that don't sell, as long as she can show the hours she has done to sell the items, they will count for tax credits. Whether it ends in a sale is not the determining factor.

However, it will make HMRC question it, which is why she needs to breakdown the 32 hours in a non-selling week and say what it is she does and explain why each on is necessary for the business.

IQ

Magic_Fairy

No, a pair of earrings would not take an hour to list.

The clothing items are generally one offs because I sell vintage items so they have to be washed and ironed and sometimes repaired or customised.

I do different activities at different times due to fluctuations in my health but I buy stock either online or from shops (when someone takes me out). I have to look at what is selling and what isn't to set my prices realistically and see what current trends are, I have to wash and iron second hand clothes and repair or customise them, I have to receive deliveries and check stock when it arrives, I have to take photographs, watermark them (a lot have been stolen by other sellers in the past) I have to design ebay pages, upload listings, answer questions from potential customers, measure items and describe them, keep accounts including excel documents, wrap parcels and post them when I get sales, arrange to be taken to the Post Office, print invoices, check payments in my paypal account, send emails to customers (you get marked on communication)... and that's just off the top of my head! I know I spend 32 hours a week running my shop but I also know I struggle with some things due to my health and it would not take other people the same amount of time. There is absolutely no way they can say I don't at least meet the minimum 16 hours though!

^^^ Actually they CAN say I don't work the minimum 16 hours per week because they just HAVE, but you know what I mean!

Anubis_2

Icequeen99 wrote: »

But the weeks she doesn't sell are irrelevant if she is listing things for sale. The legal requirement is that she is working 'in expectation of payment/profit' which is not the same as whether anything is sold. If she is placing items for sale that don't sell, as long as she can show the hours she has done to sell the items, they will count for tax credits. Whether it ends in a sale is not the determining factor.

However, it will make HMRC question it, which is why she needs to breakdown the 32 hours in a non-selling week and say what it is she does and explain why each on is necessary for the business.

IQ

Which is why I posted the question. In my previous posts I did say I was posing questions that HMRC are likely to question to themselves. I was not posing questions for me to find out if you see what I mean and made this clear

My point about the non selling weeks was not that she had not sold anything - it was exactly that she would be hard pressed to show 32 hours based on:

She would only need to press the relist button - as all the info is there.

She said she has made little profit and sales are slow therefore the chance of restocking on a week of no sales would be low, and even if she did, she would not have much expendable cash to buy stock and it would not take 32 hours.

Therefore in the week she did not sell, given slow sales, looking at it from a HMRC POV, I cannot see where 32 hours would come to play. Given she will have more than one week without sales, these hours then would need to be accounted for, but there would be little she could say to account for the hours since there are low sales/little expendable cash/no detailed listings to do as the info was already put in the week before.

My intention was to get her thinking about the time she states she spends and time herself, as HMRC have questioned it.

Magic_Fairy

I already sent them a break down of my hours worked, and I sent receipts showing purchases I have made and I sent my ebay invoices which show all my ebay activity including listings that didn't sell as well as those that did.

They phoned and said that as I didn't make a profit my business is a hobby, and they also disputed the hours I said I worked. I asked what further evidence I could send to help my case and they said their decision was final. I have received a letter stating that my Tax Credts have been stopped and that I will receive another letter shortly outlining why. In the meantime I am only receiving DLA. The letter also stated that they will be asking for the overpayment which I assume will be approx £6500.

Basically they don't believe that I work for the number of hours I say I do, and they refused to allow me to send any further evidence to prove that I do (although I'm not sure what I could send to be honest). I did send a letter from my Doctor which explains how my physical disabilities severely limit what I can do and the time it takes me to do any tasks but they don't seem to have taken that into consideration at all.

mildred1978

Magic_Fairy wrote: »

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Basically they don't believe that I work for the number of hours I say I do, and they refused to allow me to send any further evidence to prove that I do (although I'm not sure what I could send to be honest). I did send a letter from my Doctor which explains how my physical disabilities severely limit what I can do and the time it takes me to do any tasks but they don't seem to have taken that into consideration at all.

but this is the point. Let's change scenario. Let's say you were a self employed painter and decorator. It would usually take a day for a non-disabled decorator to paint a room. But because of your disabilities it takes you 4 days. The customer is going to pay for the job, so £150. Someone doing it in 1 day would be earning a fair bit from that. You're taking 32 hours to do that £150 job - less than £5 per hour without costs. You're then claiming tax credits to live on.

In your case you are selling at a loss, so buyers aren't paying enough, and taxpayers are subsidising your buyers' bargains. On top of that you ate carrying out pretty active work, while apparently being incapable of work.

It just doesn't sit right I'm afraid.

Magic_Fairy

mildred1978 wrote: »

but this is the point. Let's change scenario. Let's say you were a self employed painter and decorator. It would usually take a day for a non-disabled decorator to paint a room. But because of your disabilities it takes you 4 days. The customer is going to pay for the job, so £150. Someone doing it in 1 day would be earning a fair bit from that. You're taking 32 hours to do that £150 job - less than £5 per hour without costs. You're then claiming tax credits to live on.

In your case you are selling at a loss, so buyers aren't paying enough, and taxpayers are subsidising your buyers' bargains. On top of that you ate carrying out pretty active work, while apparently being incapable of work.

It just doesn't sit right I'm afraid.

Where have I claimed I am carrying out pretty active work? I am not incapable of doing any work but due to fluctuating symptoms I cannot work for an employer and I am housebound due to agoraphobia unless I have someone to accompany me outdoors! I am trying to make the best of a bad situation by doing what I can to make ends meet. As I said before, I haven't always made a loss from my business.

Under the current rules Tax Credits are based on the number of hours worked and not on income.

Would you prefer I do nothing and simply claim another benefit? I paid into the system for over 20 years before claiming anything and I would prefer to be working! In fact I would really like to be healthy but I don't have any choice about that.

I don't understand why people are so bothered about me claiming Tax Credits. If I don't receive them I would have to claim something else to live on. What difference does it make what the benefit is called?

I pay my own NI contributions and I was a tax payer myself for over 20 years.

Icequeen99

mildred1978 wrote: »

but this is the point. Let's change scenario. Let's say you were a self employed painter and decorator. It would usually take a day for a non-disabled decorator to paint a room. But because of your disabilities it takes you 4 days. The customer is going to pay for the job, so £150. Someone doing it in 1 day would be earning a fair bit from that. You're taking 32 hours to do that £150 job - less than £5 per hour without costs. You're then claiming tax credits to live on.

In your case you are selling at a loss, so buyers aren't paying enough, and taxpayers are subsidising your buyers' bargains. On top of that you ate carrying out pretty active work, while apparently being incapable of work.

It just doesn't sit right I'm afraid.

Yes, but that isn't relevant for tax credits. As long as each hour spent is in expectation of payment, it doesn't matter that it takes the OP longer than a non-disabled person to do the same job.

What this thread is confusing is the policy (whether the taxpayer should support someone who is constantly making a loss) vs. what the tax credits rules actually say and advice for the OP.

OP - please appeal the decision. Compliance often make wrong decisions, i have successfully appealed several compliance decisions recently including a couple of self-employed where they said exactly the same thing. Please do get some advice.

IQ

mazza111

By all means appeal the decision, but you really need to get onto ESA and do the Ebay as permitted work. Will save you the same problems when renewal time comes next year.

Magic_Fairy

Icequeen99 - thank you for you advice.

You say you have succesfully appealed Tax Credit decisions, do you mind if I ask if you mean along the normal appeal route or whether it went to Tribunal? I don't think I could cope with attending a tribunal hearing as I have agoraphobia and panic attacks along with my other health problems.

I am extremely distressed right now, more about the debt I may now owe rather than about any future claim.

I saved some of my benefit because I need to repair my shower (it leaks into my lounge), I have no working sink and I need a new back door as the one I have is rotten and is no longer secure. If they take what little I have I will literally be left with nothing to live on especially as I can't claim anything now until I receive the proper paper work and sort out the appeal etc.