Tax Credit Claim How Long?

UnderPressure

Hello

Right to cut an extremely long story short, my brother has been caught up in the great incapacity benefit to esa transfer, he failed the medical, he has just sent in his appeal so is hoping that will be accepted and he will be put on the assessment rate. In his claim for incapacity benefit he was claiming an extra amount for his partner, if his appeal is accepted we understand he will only get the £71 a week assessment rate and nothing extra for his partner.

They are due for the youngest child to start school in September, through another family member she (his partner ) has managed to arrange some childcare as she has decided that she is returning to work now instead of September, she is reviving her old self employed business that she wound down a few years ago when youngest child was born.

She should be able to get things moving again within a couple of months hopefully quicker, now they currently receive child tax credit, she will be working full time from day 1 to get things moving as quickly as possible, she will need to claim working tax credit, now at the moment until this appeal is accepted for him they only have child tax credit coming and child benefit, if she rings the tax credit help line and makes a claim for working tax credit what will happen? Will they take the details and process it there and then? Will they stop the claim and make them make a new claim? How long is it taking? They have never had any problems with tax credits and whenever there has been a change of circumstances they have always sorted it there and then on the phone so they are hoping it will be the same with this.

Also what is she best doing regarding earnings, she will need to give them a figure of expected earnings for the next 12 months, problem with this is that for the first 8-12 weeks she will not actually have anything earning wise coming in, she needs to set everything up, find customers then work for them, send invoices wait to be paid bla bla it will be a good 12 weeks in the real world before she sees any of here hard earned cash, if she says she expects to earn say 15k in the first year they will treat her as having that from the beginning, which she will not so her payments will be lower than she should actually be getting.

I know HMRC are clamping down on self employed claims and about time to but in the real world there is not a business anywhere that starts and pays a wage from day 1, not without investment and there is none of that anywhere. Could she declare a nil salary at first and then when she receives here first payments update them then with a more realistic figure? She expects to earn 15-20k in the first year but as said this will only kick in from around 8-12 weeks.

She wants things to be as accurate as possible with tax credits, they have never had any issues or over payments and she really wants to keep it that way.

Any advice appreciate as usual

Thanks in advance

davehughes182

if the expected inc is 15-20k then tell them right away.

UnderPressure

Hello

Thanks for the reply, do you have any idea regarding if they will stop their current claim or not?

If she does tell them 15-20k though I presume her payments will be lower for the first 10-12 weeks than if she told them something lower or even nil?

I understand what she means, she is trying to keep the figures as exact as possible to maximise the money they have coming in over the first 3 months because she knows it will take this long to get monies in and moving as cash flow.

Thanks again

Icequeen99

UnderPressure wrote: »

Hello

Thanks for the reply, do you have any idea regarding if they will stop their current claim or not?

If she does tell them 15-20k though I presume her payments will be lower for the first 10-12 weeks than if she told them something lower or even nil?

I understand what she means, she is trying to keep the figures as exact as possible to maximise the money they have coming in over the first 3 months because she knows it will take this long to get monies in and moving as cash flow.

Thanks again

Tax credits are annual though. So telling them nil, and the later 15,000 will likely result in some overpayment. They average income out over the year so she needs to tell them whatever figure she thinks she will earn over the year. If she makes that figure too low she risks an overpayment.

Also, is she going to try claiming childcare costs from tax credits? She will need to check they qualify with her partner's situation.

Finally, if he gets Contribution based ESA payments then they will be included as income for tax credits whereas his IB might not have been (depends how long he had been on it).

IQ

UnderPressure

Hello IceQueen

Thanks for the reply

I see what you mean so really she would be better just sticking with the 15-20k and struggling through the first couple of months, the last thing she would want is an over payment and any hassle with the tax credit people. No childcare needed when she was self employed before she had their youngest she worked in school hours and then after they went to bed, the beauty of being self employed I suppose.

I will point her in the direction of the turn2us calculator so she can an actual figure and then go from there, no idea what is going to happen with his ESA transfer he is ringing them this morning to see if his appeal has been accepted so that will be another thing to consider as and when the appeal comes around.

Why does everything seem to happen all at once!

Thanks again

shedboy94

How long has he been on ESA.....was he receiving IB before, if so for how long?

UnderPressure

shedboy94 wrote: »

How long has he been on ESA.....was he receiving IB before, if so for how long?

Hello thanks for the reply, he was receiving Incapacity Benefit since 2003, he had the medical to be transferred over to ESA at the beginning of May and then got the dreaded letter last week to say he had failed. He has sent in an appeal along with a sick note from the doctor which they received yesterday so hopefully today it will be accepted and he will go onto the assessment rate until appeal.

shedboy94

If she expects to earn £15-20000 then providing an est of £0 would be fraudulant. TC's are based on annual income, it has nothing to do with when you earn it.
As an example, if you are earning £20k pa and you lose your job after 6 months....although you don't have any income at the time, you have still earned £10000 in the 1st 6 months, so that is still your income for the year.

UnderPressure

So does anyone know if the tax credit people will make them apply from scratch or if they will just alter their current claim without stopping it?

stroptart

It should just be a change to the existing claim, unless they've separated or just got together.

UnderPressure

Thanks for that, I will let her know tomorrow she will be relieved
Thanks