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Housing Benefit - Self Employed and refusing to agree Net Profit

Mermibridg
Posts: 19 Forumite
I applied for housing benefit earlier this year. I'm self employed, a single mum and I also do a part time job 4 hours a week for the national trust.
At first I got full housing benefit but when I told them about my new national trust job they cut my benefits and are insisting I earn more than I do!
My self employed business I earn £15 a week net profit (and that's without the carried over loss from last year which they ignore!). For my national trust job I earn £27 a week. They're insisting I earn £113 a week!
I've sent three letters now detailing all of my self employed trading accounts at transaction level, all of my expenses laid out in the categories they use and my tax returns. Tax Credits and HMRC are both happy with my figures and I'm getting working and child tax credits to the full amount. Housing benefit don't even answer my letters, why do they not believe the net profit I'm quoting and insist i'm earning so much more!
Has anyone got any advise or have been through the appeals process? these people are driving me nuts!
Michelle
At first I got full housing benefit but when I told them about my new national trust job they cut my benefits and are insisting I earn more than I do!
My self employed business I earn £15 a week net profit (and that's without the carried over loss from last year which they ignore!). For my national trust job I earn £27 a week. They're insisting I earn £113 a week!
I've sent three letters now detailing all of my self employed trading accounts at transaction level, all of my expenses laid out in the categories they use and my tax returns. Tax Credits and HMRC are both happy with my figures and I'm getting working and child tax credits to the full amount. Housing benefit don't even answer my letters, why do they not believe the net profit I'm quoting and insist i'm earning so much more!
Has anyone got any advise or have been through the appeals process? these people are driving me nuts!
Michelle
0
Comments
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I've sent three letters now detailing all of my self employed trading accounts at transaction level, all of my expenses laid out in the categories they use and my tax returns
Self Employment profits are calculated differently for housing benefit than they are for tax purposes - many deductible expenses aren't allowable for housing benefit profit calculations even though they are allowable for tax purposes.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0 -
Hi CIS,
thanks for responding. Yes I realise they're calculated differently for housing benefit, but I wouldn't expect it to be 5 times as much profit for housing benefit as for HMRC!
I have used the exact categories the housing benefit use to list my expenses. There are the usual things like stationary and packaging and a decent size expense for postage (its a retail business). My biggest expense is purchase of stock of course and they seem to just be ignoring this, but on the forms it is definitely one of their categories.
This is the thing - I've worked it out their way! (the housing benefit way) and it works out at £15 a week net profit - no two ways about it, I've been over and over my figures and the guidelines.
For HMRC self assessment tax return it was £592 a year net profit from April to April, so £11.38 a week. For housing benefit its just under £15 a week and running from 25th May to 24th May for a year, I even updated it so it would be a running year not the normal tax year, just for them!.
Note this is the same office who originally wanted me to print out 400 paypal receipts on one per A4 sheet as apparently excel accounts were not good enough. I refused and they backed down!
Michelle0 -
Mermibridg wrote: »They're insisting I earn £113 a week!
Is that including your tax credits or is that listed seperately as income?0 -
Can you list your income and expenditure for self employed purposes. Would ten help identify how they are calculating your self employed income.
Losses from previous years are never carries forward.These are my own views and you should seek advice from your local Benefits Department or CAB.0 -
Is that including your tax credits or is that listed seperately as income?
That doesn't include the working tax credits, child tax credits or child allowance, its a separate listing for 'Your Weekly Earned Income'. They've listed it all as one at £113.48. This includes the £27 from the National trust job so they're saying £86.48 is my weekly self employed net profit when I say its £15.
I have read some other forums where the council seems to think it could insist on what you should be earning rather that what you do earn. I know when universal comes in, after the grace period they can treat you as if you're earning minimum wage for the number of hours you say you work, even if this is a lot more than your income really is. Would they be trying to do something like this ahead of universal coming in? seems very unfair when this money doesn't actually exist and isn't coming into my account!
thanks for reading.
Michelle0 -
Housing_Benefit_Officer wrote: »Can you list your income and expenditure for self employed purposes. Would ten help identify how they are calculating your self employed income.
Losses from previous years are never carries forward.
Ok.. so for the last year (May 25 2012 to May 24 2013) I have as annual figures
Income from business: 5105.67
Purchase of stock, bought for resale 2484.56
Packaging 137.67
Petrol to post office 37.50
Car Maintenance (proportion for business) 30
Laptop (proportion for business) 40
Heating and electricity (proportion as work from home) 200
Stationary (ink cartridges) 9.79
Professional membership 74.42
website hosting 66
ebay fees 188.16
postage 1053.94
Total Expenses = 4322.04
Net profit for year = 783.63
I thought that all of the above were allowable expenses for Housing Benefit based on their guidelines.. do any of them look wrong to you? They'd have to not include a few of them to be able to get to a profit of £86 a week I think! (£4472 for the year). That doesn't even include the purchase of stock and that must be an allowable expense, surely?
Michelle0 -
I don't know whether this link might help:
http://www.hackney.gov.uk/Assets/Documents/self-employed-advice-htbandctb.pdf
If it still doesn't make sense then you will need to ring them and ask for a breakdown of how they have worked it out. or have you got this already?0 -
Re your business. It does seem a huge amount if effort for the equivalent of 3 hours work a week at min wage. I would imagine the allowance for working from home would not be considered fir housing benefit purposes or you would in effect be paid twice for this amount.0
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Looks like they are not counting purchase of stock and heating electricity use as expenses.These are my own views and you should seek advice from your local Benefits Department or CAB.0
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Housing_Benefit_Officer wrote: »Looks like they are not counting purchase of stock and heating electricity use as expenses.
I am unsure of the rules in this area - I've read the rules for ESA.
Would it be correct that stock purchased - but not sold - is capital, and cannot be offset against income for the purposes of HB?
For example - buy 10 widgets, break one, sell 2.
You can claim the 3 as legitimate business expenses for HB, which can be offset against income - but not the purchase of the 7, until you come to sell them.
Perhaps the problem is that how much of the stock has actually been sold is unclear?
(Though clearly to take the position that none has been, seems odd)0
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