Self employed tax credits check

FRESTER

Hi,I received a letter from tax credits today asking for various proof about my self employment,which is not a problem because I already have the required documents ready to go.
What I was wondering is has anyone here had to send one of these back and how long did it take to process.
Thanks in advance Simon

FRESTER

Sent everything off yesterday and it arrived today so I suppose time will tell.
My only concern is I don't have any expenses to show because I am a cleaner and all my work is local apart from one job where I get a lift with my friend who works with me cleaning holiday lets.
I email invoices so don't even need to include things like printer ink and everyone supplies there own cleaning materials.
I just hope because I keep my costs down it doesn't go against me.No telling how these people think.

Tracymae

Can I ask how you got on? We had the same letter from HMRC about sending in self employemnt details etc. My husband and I are both self employed and although we havent made much money this year especially we are still working very hard to try and keep our heads above water during the recession. We sent everything off this morning (less than 48hrs after receiving the notice) and hope we have answered everything needed.

I have been going through moments of panic of how we will cope if they remove our working tax credits, to thinking we have nothing to worry about as we have been completely open and honest. I am guessing it comes down to the person at the other end and their 'interpratation' of our timesheets.

It would be good to know how other people in similar circumstances have had their cases dealt with.

xnatalie81x

Hi

When i first went self employed a couple of years ago (jan i will have been se for 3 years) i received the letter and sent all of my paperwork off and i seem to remember getting a phone call to verify a few details and i received a confirmation letter thingie not long after. Make sure you leave contact details.

I am wondering if they will regularly check? Will i get one every 5 years? Or is the fact that my earnings go up every year good enough evidence that i am still slogging away?

FRESTER

Like you I sent all the paper work off within 48hrs and rang the number less than a week later to be told everything was fine.
We were also worried at the thought of losing our working tax credits but if you sent all they asked for you will be fine.
We started self employment August 2011 and this was our first review.
You should call them after a few days to put your mind at rest because the letter saying all is well took a couple of weeks to arrive.
Let us know how it went

Truegho

What proof do the Working Tax Credit ask for in regard to self employment? I am contemplating setting up my own freelancing writing business, working 30hrs pwk, but firstly I need to be sure that I will get Working Tax Credit as a self employed person.

FRESTER wrote: »

Like you I sent all the paper work off within 48hrs and rang the number less than a week later to be told everything was fine.
We were also worried at the thought of losing our working tax credits but if you sent all they asked for you will be fine.
We started self employment August 2011 and this was our first review.
You should call them after a few days to put your mind at rest because the letter saying all is well took a couple of weeks to arrive.
Let us know how it went

Marcs_Gran

My daughter is self employed 4 days per week, she is now on her 2nd review in under a year. They wanted bank statements, invoices car registration docs, petrol receipts, nursery receipts mortgage statement cuddly toy kitchen sink ok last 2 not needed but you get the picture. All sent in october then 2 weeks later nothing in bank . In processing queue is all she gets told and that it takes as long as it takes :eek: She is so stressed its not funny anymore. She doesn't mind the fact it's getting reviewed as she would certainly expect it would be but its the lack of communication skills at HMRC that are getting to her. A polite question surely warrants a polite answer ?

Heycock

It must be dependent on who's handling it. I had none of these problems. As I was registered with the taxman as S/E for taxation, it would have been odd for the TC section to also ask for proof.
As to annual reviews, each year I'd give an estimate of net profit for the previous year (my accounting year overlapped the tax year) and then as soon as I'd done my return and had my agreed assessment, I'd ring them with the correct figure so they could make any adjustment. And that was it. I'd be surprised if one part of HMRC was unwilling to accept figures agreed with another part. On the other hand, perhaps not.

BigAunty

Heycock wrote: »

It must be dependent on who's handling it. I had none of these problems. As I was registered with the taxman as S/E for taxation, it would have been odd for the TC section to also ask for proof.
... I'd be surprised if one part of HMRC was unwilling to accept figures agreed with another part. On the other hand, perhaps not.

Some of the threads we see on this forum are nothing to do with discrepencies between the tax return and figure used to apply for tax credits.

For the self employed, these are often compliance reviews for working tax credits where they have to prove they are working the hours they say they are and that they are in renumerative employment, (doing work in the expectation of being paid, for example, not just being 'busy' and padding out the hours with exaggerated marketing/web content/admin tasks).

There's a suspicion voiced by some posters that the HMRC are clamping down on ultra low profit hobby businesses like ebay selling and so on, that they may have flags in their system to throw up weak WTC claims to investigate, ones where the 'businesses' really don't meet the criteria for a legitimate WTC claim.

Heycock

Point taken Big aunty. I suppose then that these compliance checks will increase with the recent changes to qualifying hours of work. I was working between 55 and 70 hours a week on a pittance as well as full-time caring so i never had a problem with the minimum hours part! I'm glad I'm out of it all now. To a degree.

BigAunty

Heycock wrote: »

...I suppose then that these compliance checks will increase with the recent changes to qualifying hours of work. ...

What recent changes? I know back in April there was a change for parents to work at least 24 hours between them (used to be 16).

The main way of remedying appears to come with the move to the Universal Credit system, setting an aspiration/expectation for the self employed to at least earn the National Minimum Wage from their businesses after they've been set up for awhile unlike the current situation where some self employed households have earned pennies for a decade or so.

Setting hours of work as a threshold for WTC is very artificial and disincentivising.