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

princessdon

leamingtonspaceman wrote: »

What bugs me about this situation is that the OP's ebay selling is not classed as 'work' because it generates little or no income. And yet, if you are claiming income related benefits, and you decide to sell some of your own possessions on ebay...that you have paid for previously...then you'll get pulled-in because all of a sudden...you have a 'business.' It'll then be up to you to 'prove' you don't have a business and an income.

It's double standards. The OP is penalized for not earning enough even though they put in the hours. And yet someone can also be penalized by doing exactly the same as the OP...and this WILL be seen as 'work' and 'income.' The rules are 'bent' to suit the Government and create paradoxes such as this. If even an hours work a day, or £10 a day income is considered a business that can affect income related benefits, then it must also be treated the same for WTC.

I wish the OP all the best. They have a sound basis on which to appeal.
k.

to be fair no one knows that (we have OP's word alone). DWP can SEE her Ebay Store - see how many were relists, see what is listed. If there are more re-lists than sales and she claimed 32 hours a week there is a problem and she will struggle to win an appeal.

If there are a huge amount of new listings then clearly she stands a better chance of appeal.

I don't *know* much about Ebay (other than private sales) but easily an half hour per lisiting for me. Therefore if she has say 40 new listings a week, plus wrapping, going to PO, etc 32 hours is justified. 2 and it isn't.

Only OP and DWP know the volume concerned and if she really did work 32 hours.

Maybe she has a none legal return policy that isn't compliant with DSR's, there could be other things that make DWP think she *isn't really running a business*, or they could be a PITA and look at income and dismiss it unfairly.

Since OP hasn't said how many new lisitngs each week and their conversion rate to sales, relist rate etc then I don't see how anyone can know her appeal will be a given

FBaby

What annoys me with these situations is that they were allowed to go on for so long now penalising people for doing what they thought was just benefit from a system that suited them. Of course WTC were not designed to help people use ebay as a business. The two can't even start to be compared. The key factor of starting one own business is that it involves a huge risk, financially of course, but also emotionally and socially. Very few people starting proper business work 30 hours or less, they put all they have into it....because it's that of fail. The positive is that when the business takes off, you can to enjoy the benefits. These kind of supposed start-up business involve no risk at all, yet are unlikely to ever become a real success.

Saying that...people are human. If they can find a way to do something they do for fun whilst getting benefits for it with no questions asked (rather than to justify efforts to look for a job or showing evidence of illness/disability), of course they will go for it. The problem is that the gov has only reacted once the number picking up on it have gone mad. It isn't fair to expect these people to repay entitlement when they gave no indication previously that claimants were not following the rules.

That they should stop such entitlement is a good step forward. To expect people to repay for previous years is just sadistic.

Magic_Fairy

Thank you everyone for sharing your views.

My grumble is not that they have stopped my claim (although I still believe that under the current rules I am entitled to claim just the same as anybody else on a low income). My grumble is that instead of asking me about my activities a month or two after processing my claim for 2011/12, they waited 14 months allowing me to unintentionally run up a huge debt! If they had told me earlier that they didn't think I could claim I would have claimed one of the other benefits and not owed them so much money. This has not happened because I renewed my claim, this was an investigation of my activities which could have been carried out at any time. If I pay them back I will be left in a situation where I received no benefit for 14 months, or longer depending upon how long the appeals process takes.

*By the way, I have spent 4 hours listing items on ebay this afternoon but I have not sold anything today. Does this mean I haven't worked?

Herongull

I've read through this thread with interest.

I must say it looks to me that you don't have a real business. You buy individual items online or in shops (not wholesale) and don't appear to add value to them before selling them on (other than washing and ironing etc in the case of clothes items). You don't make the jewellery or appear to do (significant) repair jobs.

Even if you do manage to sell them sometimes for more than you paid for them, there are significant transactional costs (eg ebay and paypal fees, not to mention postage) which will always tend to reduce or wipe out any profit you might otherwise have made.

Although it might be possible to a very small profit in some years (as you say you've done), it is difficult to see how anyone can have a reasonable expectation of anything more than that.

If your business gives you personal satisfaction but no realistic expectations of a significant income, then you have a hobby, no matter how much time and effort you put into it. Many people spend considerable time (and money) on their hobbies.

You've have been given good advice on this forum from the other posters.

chrisotherwise

Magic_Fairy wrote: »

I have spent 4 hours listing items on ebay this afternoon but I have not sold anything today. Does this mean I haven't worked?

Yes, that's exactly what it means. You are self-employed and running a business. The business should be judged on how well it performs. If you don't make any money then the DWP can quite reasonably say that it is a hobby and can't be considered "work".

eskimo26

Despite some people claiming this is legitimate, they are as far as i'm aware, making a very aggressive reinterpretation of the current legislation?

Both with regards to their claims you are not eligible and the money they expect you to pay back i would contact your MP IMMEDIATELY.

They should be made aware of everything.

The most relevant thing is the idea that because you are not making profit this is not a bussiness and you set it up purely to make a tax credits claim. The fact that at one point this company WAS making profit directly rebuffs this!

If you feel they have been rude, treated you like a criminal or been totalitarian with no explanation [did they say their is nothing you can appeal? Have they refused to explain specifics of what led them to their conclusions?].

Make sure MP knows how this has made you feel, what difficulties it has thrown up and what a state of panic they have made you feel financially as a vulnerable and presumably profoundly disabled individual.

Contact your MP now. Otherwise tomorrow it'll be something else their after to pay for their financial mistakes.

At the end of the day your company did make profit, it is now no longer doing so in the current economic climate. Many, many small companies i am sure are in the same boat and they shouldn't be punished because the politicians have decided illegitimately to change the goalposts.

By all means make a revised business plan, obviously at one point vintage clothing was popular but not in today's climate.

I recently went to an auction clearing stock from bankrupt companies. Which companies did the auctioneer say again and again had gone bankrupt and had a rough time in today's economic climate? Luxury goods. Cloths, persian carpets, autographed paraphernalia, paintings by famous artists, fine furniture, vases, crystal, expensive spirits and wines.

Perhaps you could also ask your MP what happened to the investment and loans the banks promised to the Government, for small businesses when we bailed them out? :mad:

Magic_Fairy

Herongull - I do buy from online wholesalers but I also buy vintage pieces which sometimes have to be repaired. I provided receipts to show this.

As far as I am aware, if you buy anything with the intention of selling it for profit, you are trading and this was confirmed when I registered my business with the Tax Office.

sabretoothtigger

Sad situation, they would rather pay you for nothing then the idea of doing work. Ideally there should be an arbiter between government depts to equalise what you have and could have claimed but government is a meat grinder.

Its not a just situation, I dont think you will get a nice conclusion to this. Often people go bankrupt when caught up with back taxes of this sort

Herongull

The trouble is that the rules for paying tax are not the same as those for WTC. If you derive income from a hobby, you are supposed to pay tax on it, but this does not mean the hobby is eligible for WTC.

If you can demonstrate that your e-bay shop had a viable business model and that you made substantial profits in previous years (much more than a bit better than breaking even), and that this year was just a bad year then this might help your case.

But I'm only a layperson and as several others have said, this is a complicated area and you need to take expert advice.

Icequeen99

chrisotherwise wrote: »

Yes, that's exactly what it means. You are self-employed and running a business. The business should be judged on how well it performs. If you don't make any money then the DWP can quite reasonably say that it is a hobby and can't be considered "work".

This thread is really getting silly now, I have asked again for the moderators to close it.

'How well it performs' is not a test in tax credits legislation, and you don't get paid WTC based on a judgement about how well a business performs. Secondly we are talking about HMRC not DWP.

The fact that you make no money is irrelevant when determining whether the person is in 'qualifying remunerative work' and is 'working hours in EXPECTATION of payment'. The fact that no payment is forthcoming does not matter if the hours were in fact work with an expectation that some money would come forward.

HMRC may well argue that the OP wasn't doing work in expectation of payment, but that will be for a Tribunal to decide.

The rest of the discussion on this thread seems to comprise of people who disagree with the policy behind tax credits supporting the self-employed who are loss making along with other people who don't like what the OP is doing and are making up rules which just don't exist in the tax credits system. Neither is helpful for the OP and if you look at the board rules, neither is within the spirit of the board.

IQ