Self Employed Tax Credits Help, Please?

MissFlip

Hi,

I'm registered as self-employed as I was a self-employed cleaner up until around 18 months ago when I was struck down with very bad CFS. I've never got around to telling the correct people that I'm not doing that job anymore.

To earn a few quid I'm running my own e-commerce site, not making much at all at present, but mostly because of my condition it's taking forever to get all the products uploaded.
I'm putting in around 38 hours a week (leaves me utterly knackered, sadly) but because of the 'brain fog' that comes with CFS I don't get massive amounts done in that time.

I absolutely don't want to claim JSA or try for going on the sick (not that there's anything wrong with it, I just really want to support myself as much as possible, plus I'm pretty much housebound due to the CFS and bad anxiety and panic attacks so going to the JC would be a mentally and probably physically crippling idea), I just wondered if maybe the government would give me a bit of help in trying to support myself in this manner?

I'm 30, and don't have a partner or any other income.

I did try Working Tax Calculator and it said I'd be entitled to around £1600 per annum, I just wasn't sure if they'd think running an e-commerce site would count as self-employment?
Also, if anyone could tell me, if they know, if they ask for proof of hours or anything? As I'd have to think about how to prove it on paper. Also, stupid question, they need a National Inusrance number, of course?

Many thanks

princessdon

Do you have children

Do you have a partner

Do you claim DLA or other benefits


To answer your question basically they take a "reasonable approach". Ie it is reasonable that someone would work XXX hours for YYY money and it is reasonable they took that long to do the job.

there have been many threads by disabled people who lost their WTC (or at least the 30 hour element) because they didn't beleive it took them that long.

Then there is the introduction of UC - Where this is going to be looked at.

MissFlip

No children,
No partner,
No other benefits.

benefitbaby

Hi, I really think you need to consider making a claim for DLA. If you were unable to continue your current s/e work (or if WTC do not consider it reasonable as per previous post) you should then consider ESA. Details on both benefits can be found on the Disability Rights UK website in the sitemap section.
Naturally there is also housing benefit and council tax benefit to consider.

Pedent

Self-employed Working Tax Credit claimants aren't routinely asked for proof of hours. You do need your NI number to apply. In theory, as long as you're registered self-employed and accurately report your hours and earnings, then what type of work you're doing doesn't affect your entitlement to Working Tax Credit.

However, do bear in mind that WTC claimants will be migrated to Universal Credit within a few years of its introduction, and at that point things will get tougher for low-earning self-employed claimants.

For a start, a Minimum Income Floor will be introduced: unless you're in your first year of self-employment, your entitlement will be calculated on the basis that you're earning at least the equivalent of minimum wage for 35 hours/week (unless you're unable to work that many hours, e.g. due to caring responsibilities).

Also, there'll be some new conditionality for awards: if you aren't earning above the Minimum Income Floor, then you'll be expected to attend interviews and produce evidence to demonstrate that you really are doing the work that you say that you are, and that you have a business plan to develop your self-employment and increase your earnings.

Transitional protection may mean that you don't lose out due to the Minimum Income Floor (or rather, that you only lose out slowly, over time, as your transitional protection is eroded by inflation), but I'd imagine that unless your CFS improves, or you increase your earnings significantly (probably to the point where you aren't entitled to Universal Credit in your current circumstances) then you'll find the conditionality quite arduous.

For those reasons, WTC is probably at best a very short-term solution for you.

BigAunty

The HMRC website sets out clearly what can be classed as self-employed hours (the type of business task/activities) and what is classed as renumerative employment (with the expectation, not just the hope of payment).

Do interrogate the terms and conditions of WTC clearly. Make sure you keep thorough records of your time, customer records, invoices, etc.

On this forum, we have seen many cases of the self-employed, including those with disabilities and those with e-commerce sites, who have had compliance reviews of their businesses by the HMRC and been forced to pay back their WTC for not being able to prove that they've worked the hours they say. See if you can dig up those threads.

This included one disabled e-bay seller who hoped, but failed, to convince the HMRC she spent the hours she said on her activities which she said was made much slower because of her disability and she felt the HMRC made no allowance for this.

So if you go down this route, hope that you don't have a HMRC investigation but keep good records as if you expect to.

MissFlip

Thank you all for the replies.

I found the thread about the lady who had her WTC withdrawn. It's really put me off. I've been trying to support myself for the past 18 months and never had any intention of claiming any kind of benefit, someone just mentioned that I might be able to get WTC as I'm working hard at trying to build a viable business for myself.

I've never claimed any kind of benefit, I've always just worked or starved. It seems like they'd be constantly on my case and I can just barely cope with day to day things now so I think I'll have to give up the idea of claiming WTC as it sounds a rather confrontational experience with which I just couldn't cope at present. I'll look into ESA, but at the moment I can't even pick up the phone to call a doctor let alone face assessments.

Thank you all for replying.

BigAunty

MissFlip wrote: »

...It seems like they'd be constantly on my case and I can just barely cope with day to day things now so I think I'll have to give up the idea of claiming WTC as it sounds a rather confrontational experience with which I just couldn't cope at present. ....

They aren't constantly on the case of every disabled or self-employed WTC claimant, the HMRC investigate some claimants as a matter of course due to the regular abuse of the tax credit system which people are attracted to compared with the hassle of signing on for JSA.

Another one of the posters we came across, an ESA claimant, who failed a compliance case sold two products in the space of a year but said he spent 30 hours a week tweaking his website and monitoring customer activity....But seriously - selling one product every 6 months?! How is that a business by any measure?

Another poster had sold books on ebay or amazon for years and was barely earning more than a hundred or two hundred pounds per month. Another was a graphic designer with next to no clients. Another was someone who made things from donated items and sold them at bootfayres.

All of their businesses were very dismal enterprises that, should there not have been the cushion of WTC, housing benefit and so forth, they'd have come to their senses and wound them up.

One thing that made me aghast when I joined this forum is that a few years ago, many posters encouraged people into self-employment to qualify for working tax credits, saying how easy it is to have some kind of micky mouse or hobby activity, how to maximise the hours claimed towards the WTC threshold and so on.

There certainly was a culture of 'oh, just flog some stuff you buy in charity shops on ebay - each one might take an hour to buy, an hour to list, an hour to wrap and post, then you can trouser thousands in WTC/HB/CT indefinately - you don't even need to make a profit, in fact you will probably want to minimise your profit to maximise your benefits', etc.

One poster here thinks the HMRC probably have some kind of risk flag in the system that throws up cases to investigate. My theory (just a theory) is that they target particular groups for compliance interviews - for instance, one year it will be IT contractors, another doctors, another plumbers - this is well known because the HMRC publicise their intentions. So perhaps they target certain types of self-employment because they tend to find low levels of compliance with the criteria for claiming tax credits.

If your business complies with the terms and conditions of WTC and self employment, then put in a claim. At least you are aware of what happens when the HMRC investigate - many of the posters that come onto this forum have kept next to no records, were really shocked that they needed to be able to demonstrate that their claims were legitimate, were really surprised that their microbusinesses were considered laughable by the MSE posters here.

Sixer

What BigAunty said.

But I would say that even HMRC expect low profits AT FIRST.

For example, I have a well-established web business. In its first year, it made under £600 in profit. In year two, about £2k. Now, in year eight, I'm expecting profits over the average annual wage in the UK.

Tax credits were never an issue for me - there's another full-time wage earner in my household, and we were only ever entitled to the tenner a week of family element for a few years.

But I kept proper records and could always have proved 30+ hours of proper remunerative work even if I had been the single earner in my household. Also, as BigAunty says, if I'd still been making £600 profit in year three, I'd have packed it in as a pointless effort.

Sixer

PS: it should also be remembered that Jobcentres were guilty of encouraging microbusinesses + WTC as a way of getting off JSA. A quick look at the Rightsnet forum will show many people who were told by JSA staff to set up an eBay shop or similar and claim WTC now having their WTC claims disallowed by HMRC.

So it wasn't by any means all deliberate abuse of loopholes.

STOCKWIRE

MissFlip wrote: »

No children,
No partner,
No other benefits.

Strange. Have you not recently purchased a house with your partner ?.