Tax credit problem.

Billy_Austin

I've had a letter from HMRC re my tax credits asking why I've claimed as a single person. In the past my girlfriend has not lived here full time but just visited, when she's here she is working with me on my self employed business, she has no income of her own.

I think we perhaps should have claimed as a couple, but the income that i've claimed on for myself is basically what both of us have been living on anyway, so i don't think i have claimed anything i shouldn't have.

i'm not really very good at this sort of thing, which is why i've never changed it, i'm worried about calling them up incase i drop myself in it and end up having to pay it all back.

Can anyone advise me on what the best course of action is?

nannytone_2

if she has no income of her own, then obviously you are living as a couple and are financially supporting her.

the fact that you are no better off because you claimed as a single person is irrelevant.
you signed the declaration saying you were single, which is not the case.
you need to be honest and tell them the truth

davehughes182

If she does not live there with you, then you may not need to claim as a couple.
That being said, if you are a couple and have financial ties, then maybe a joint claim is the way to go.

Billy_Austin

davehughes182 wrote: »

If she does not live there with you, then you may not need to claim as a couple.
That being said, if you are a couple and have financial ties, then maybe a joint claim is the way to go.

I think I could argue that we aren't living as a couple for the time being but as time goes on it would be best to claim as a couple. what i'm wondering is whether it's best to argue that i claimed correctly in the past and then simply change any future claim to one as a couple, or rather than try and fight them to simply say yes i made a mistake and hope they don't make me pay it all back. I'm not sure i can prove she hasn't been in permanent residence here for the last two years as when she's not here she's either staying with some other friends she helps out or with her father in the highlands, she doesn't have an address of her own and uses my address for correspondence.

Billy_Austin

nannytone wrote: »

if she has no income of her own, then obviously you are living as a couple and are financially supporting her.

the fact that you are no better off because you claimed as a single person is irrelevant.
you signed the declaration saying you were single, which is not the case.
you need to be honest and tell them the truth

OK, and what would happen then?

davehughes182

You would need to provide evidence that she didnt live with you at the time they are stating of course. As long as you can do this, then you are able to argue your point.

Billy_Austin

What would constitute evidence though? it's not like she has kept her own residence during this time, she's spent some time staying with me and some time staying with her friends and family, most of her post comes here, which is why i presume they're querying my claim as she had some tax stuff sent here last year.

pmlindyloo

This is a bit of a mess!

You have to decide on what has been happening as regards your self employment.

Do you declare her on your tax forms as your secretary and pay her a salary? If you do then she should have registered as self employed and completed her own tax form.

If this is what you have done then the money should have been showing up in her bank account for tax purposes (i.e. out of yours and into hers)

If she had her own place where she lived and where she was registered for the doctors/on the electoral roll/where she used the address for any mobile phone bills etc etc then you could have probably have made a single claim for tax credits purposes.

If you do not declare her on your tax form as paying her a salary and give her money to spend out of your own income, and her address for all purposes is yours then you should be making a joint claim.

It would seem from what you say that the second scenario is the most likely.

You must therefore tell tax credits that you should have made a joint claim. They will want to see bank statements which is why I mentioned the 'salary part'.

I understand that the situation is somewhat unusual but you have to ask yourself if you could be seen as 'living as man and wife'. This is what tax credits look at.

Everything you have said so far indicates that you are.

As to what happens then - hopefully when you ring them they will tell you what information they need and what will happen.

shop-to-drop

Electoral role, bills, car insurance etc.

Icequeen99

pmlindyloo wrote: »

This is a bit of a mess!

You have to decide on what has been happening as regards your self employment.

Do you declare her on your tax forms as your secretary and pay her a salary? If you do then she should have registered as self employed and completed her own tax form.

If this is what you have done then the money should have been showing up in her bank account for tax purposes (i.e. out of yours and into hers)

If she had her own place where she lived and where she was registered for the doctors/on the electoral roll/where she used the address for any mobile phone bills etc etc then you could have probably have made a single claim for tax credits purposes.

If you do not declare her on your tax form as paying her a salary and give her money to spend out of your own income, and her address for all purposes is yours then you should be making a joint claim.

It would seem from what you say that the second scenario is the most likely.

You must therefore tell tax credits that you should have made a joint claim. They will want to see bank statements which is why I mentioned the 'salary part'.

I understand that the situation is somewhat unusual but you have to ask yourself if you could be seen as 'living as man and wife'. This is what tax credits look at.

Everything you have said so far indicates that you are.

As to what happens then - hopefully when you ring them they will tell you what information they need and what will happen.

If he has been paying her salary surely that would make her an employee of his business not self-employed. If she is a partner in the business - then that would make her self-employed and she would need to fill in a SA return.

IQ

Billy_Austin

pmlindyloo wrote: »

This is a bit of a mess!

You have to decide on what has been happening as regards your self employment.

Do you declare her on your tax forms as your secretary and pay her a salary? If you do then she should have registered as self employed and completed her own tax form.

If this is what you have done then the money should have been showing up in her bank account for tax purposes (i.e. out of yours and into hers)

If she had her own place where she lived and where she was registered for the doctors/on the electoral roll/where she used the address for any mobile phone bills etc etc then you could have probably have made a single claim for tax credits purposes.

If you do not declare her on your tax form as paying her a salary and give her money to spend out of your own income, and her address for all purposes is yours then you should be making a joint claim.

It would seem from what you say that the second scenario is the most likely.

You must therefore tell tax credits that you should have made a joint claim. They will want to see bank statements which is why I mentioned the 'salary part'.

I understand that the situation is somewhat unusual but you have to ask yourself if you could be seen as 'living as man and wife'. This is what tax credits look at.

Everything you have said so far indicates that you are.

As to what happens then - hopefully when you ring them they will tell you what information they need and what will happen.

Thankyou for this advice, i would say in all fairness that yes, your second scenario is correct, i don't pay her a salary. TBH I hadn't given the matter much thought, i thought if she wasn't in permanent residence here then we would not be viewed as a couple.

It's not my intention to try and gain any advantage via claiming as a single person, and if this is wrong then i'm happy to correct it. What i could do with knowing is will they expect me to pay any historic claims i made back to them, regardless of whether i gained an advantage by claiming incorrectly? or will they asses what they should have paid me had i claimed correctly, and then ask me to repay anything they have overpaid?