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

paddedjohn

Icequeen99 wrote: »

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

This thread would be lower down on the page out of the way if you hadn't bumped it up with your assertion that it should be closed, if you don't like the way the thread is going then dont read it.

shedboy94

When you say in previous years you made a small profit.....how small are we talking?
Almost everyone I know who is s/e actually makes a living out of it - they treat it as their main income, not as a means to claiming huge amounts of Tax Credits. I also know a couple of people who started up a business, gave it a couple of years, and when they realised they couldn't make a decent income from it they gave it up - it seems you are not making a living out of your 'business', so they question is - why are you still doing it unless it is to receive WTC?

My dad goes fishing as a hobby - he spends about 7 hours a day doing it - if he were to do it 3 days a week and then sells the fish he has caught for a few pounds profit would it be classed as employment for WTC - no, it is a hobby that makes some money but isn't a viable business.

Magic_Fairy

Thank you Icequeen99.

I was hoping someone who had themeslves been in a similar situation would come forward. I would like to know how they 'proved' how many hours they worked when working from home and whether they were successful upon appeal. I offered to get a written statement from my Doctor outlining how my condition would make it harder for me to do the same tasks as a healthy person and they refused, and I offered to send them a letter from my Support Worker who has taken me out to purchase goods and they refused that as evidence also.


If anyone has been in a similar situation please PM me. Thank you.

Magic_Fairy

Shedboy94 - As pointed out earlier, how successful my business was during the tax year in question is irrelevant to the argument because Tax Credits are based on the number of hours worked and not on whether the business made a profit or loss.

I have made a profit in the past but I would prefer not to post every minute detail of my life on this board only to have people rip me to shreds.

I am not claiming HUGE amounts of benefit. I received £6500 over 14 months. I believe I would have received more had I claimed ESA or Income Support. At the time of my claim I was told to claim Tax Credits because I was self employed. There are couples earning up to £32000 (not sure what the cut off point is now) who claim Tax Credits so I don't understand why people are so angry that a person such as myself who is experiencing true poverty is also claiming?

It would be nice to hear from someone who has been in the same or similar situation.

The argument here is not about whether I should continue trading, or whether I should be in receipt of a different benefit. The fact is I did work more than 32 hours per week during the year in question and I was in fact perfectly entitled to claim Tax Credits under the current rules. My problem is PROVING the hours I worked from my home, nothing else.

***Icequeen99 - I have sent you another PM but my messages don't seem to be sending. Could it be because I am new to the site or is there a problem with my settings?

soolin

Yes I have seen it successfully appealed, but due to the fact the seller had a proper business plan and an expectation of a real business.

This person showed proper research, e they could afford to buy 20 items to start with at x cost, the ebay pulse showed an average selling price of x, therefore before fees etc there was an expectation that those 20 items would achieve a gross profit of x , from which fees and expenses would be x.

Then after the first money started rolling in they showed they would be using all the net profit to reinvest, they even had other lines ready to buy when they had money. It was a properly worked out plan, they had it all written down and showed a true expectation of a realistic amount of profit after time, but nothing really at start up. Their busines splan showed though that after a certain amount of trading they could realistically have expected to make X amount and have a large stock on hand and listed at all times which gave a basic turnover of X.

However I have also seen people lose their WTC as their business model was unrealistic.

I sell antiques and collectables for instance. so it is no good me buying just about anything antique, I watch th emarkets carefully and whilst last year I could sell any amount of very old pewter, this year it is barely moving at all, so I don't buy it. I keep notebooks of things to watch for and mark trends in names and manufacturers. So if you are appealing you will need to show a good solid business plan with enough stiock being bought and enough evidence to support a realistic income from that.

So lets say you buy vintage dresses and your research shows that a certain vintage or style fetches £50 on average, you could show that by buying that at £10 and in quantities large enough to expect say £15 a dress clear profit, which might mean you show you hold say 30-40 items of stock at any time. If you are merely buying 3 or 4 items a time and spending 32 hours sellign them and making £10, then I don't see an appeal going your way as there is no expectation of making money and therefore no business for WTC purposes. (obviously it is still a business which many people would run in their spare time to make pin money).

You need specialist advice though to support you with an appeal, I would not suggest you go it alone.

Dunroamin

Magic_Fairy wrote: »

Thank you Icequeen99.

I was hoping someone who had themeslves been in a similar situation would come forward. I would like to know how they 'proved' how many hours they worked when working from home and whether they were successful upon appeal. I offered to get a written statement from my Doctor outlining how my condition would make it harder for me to do the same tasks as a healthy person and they refused, and I offered to send them a letter from my Support Worker who has taken me out to purchase goods and they refused that as evidence also.


If anyone has been in a similar situation please PM me. Thank you.

Anybody else's situation is likely to be quite different from yours and asking for information like this sounds very much like wanting help on fiddling the system.

Magic_Fairy

Dunroamin wrote: »

Anybody else's situation is likely to be quite different from yours and asking for information like this sounds very much like wanting help on fiddling the system.

Asking what kind of evidence I can use to prove what actvities I undertake from my own home is hardly fiddling the system. I have already told HMRC what I 'do', I am merely asking how to prove it.

How can I prove how long it takes me to repair a vintage dress for example? How can I prove how long it take me to iron the dress and hang it up to take photographs? These are activities I do in order to sell items and asking how I can prove it is not fiddling the system.

Soolin - Thank you, your post was very helpful.

GlasweJen

Magic_Fairy wrote: »

As I stated in previous posts I have not always made a loss from my ebay business, but yes I did always get a low income from it. Anyone on a low income can claim Working Tax Credits as long as they meet the qualifying criteria which when I claimed it I was told I did.

the qualifying criteria are that you work at least 16 hours a week and if you start working less than 30 hours a week you call them to report the change in circumstances.

chrisotherwise

Icequeen99 wrote: »

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

Why? The OP is getting some really useful advice, and this is a very interesting area about which the law is unclear. Lots of people are "running an ebay business" and claiming WTC so it has wide interest as well. Also the OP, to her credit, is engaging in the debate rather than putting her fingers in her ears or running away.

'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.

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.

Sure that could be decided by a tribunal, as could many questions asked on this board. Debating them here is interesting and useful - both to the OP and to others.

From the OP's descriptions it seems clear that there was no realistic expectation of making a profit. It is therefore likely that she doesn't qualify for WTC. However it's impressive that she has the entrepreneurship to do what she's doing - so perhaps she might consider how she can turn that loss into a profit. Maybe she could add value to the products she sells - by cleaning them, repairing them or replacing missing parts. Perhaps she could be more selective about the stock that she buys so that it's rarer and more interesting to customers. Perhaps she could ship abroad where English things may sell for a premium. Doing any of this, even if it's only at the planning stage is likely to impress the DWP/HMRC and give more weight to it being a *real* business.

Magic_Fairy

I think a photo of my stock room would show that I have invested a lot of time and money into this venture! I am struggling to get into the room! :rotfl:

I don't think it's fair to say I had no real expectation of making a profit. I wouldn't work my backside off without thinking I would make money from the venture. Sometimes when trends change, postage costs increase, ebay fees go up etc, a profit is harder to reach on a particular type of product so you have to let them go for a loss. That doesn't mean that I never intended to make a profit. Times change and I am trying to sell different items accordingly. As I said, I made a loss in the last tax year, that does not mean I have always done so or that I will continue to do so.