WTC and link to Housing Benefit

AngelPie78

CKhalvashi wrote: »

Unless you are a single parent, you shouldn't be getting housing benefit or tax credits if you're a full time student.
CK

You don't have to be single either. You can be with a partner or married and still claim these benefits. Depends on joint income, of course.

StormyWeather_2

AngelPie78 wrote: »

Ok, like I said, I know that HB is dependent on my student loans, child benefit and CTC. That's all of my income. I already get HB and have been for almost two years - whilst I have been a student.

I just simply wanted to know if anyone knew what the effect would be on HB if I claimed for WTC whilst setting up my company. I won't be earning any money for two years , I expect, as I am building up a portfolio. I can get an extra £80 per week in WTC, but will my HB drop by this amount.

No-one seems to be able to answer my question. HB office say they can't tell me as it "depends" on my circumstances, ditto for the Tax Credit office.

I just don't want to be worse off.

Thanks x

Housing Benefit adds up your total income, some is disregarded, what's left over determines what you receive.

I don't think you'd be worse off financially. At worse you'll have the same amount.

But, if you claim WTC, you have to back this up with proof that you are working. I don't think they will allow you to take 2 years to build up a portfolio. When UC comes in they will treat you as earning NMW for the number of hours you are supposed to be working.

You also have to register as self employed, keep accounts and submit tax returns.

missymish

I am not sure of the amount extra you would get, but from personal experience of being self employed and claiming tax credits you can claim but you need to be able to justify you are working 16 hours per week. My first year of business I only earned a profit of 2k and my tax credits were based on this but my profits steadily increased each tax year.

I think the main thing is if investigated could you show that you were working 16 hours per week as self employed whilst making some income or trying to, and as others have mentioned you need to register as self employed.

CKhalvashi

AngelPie78 wrote: »

Ok, like I said, I know that HB is dependent on my student loans, child benefit and CTC. That's all of my income. I already get HB and have been for almost two years - whilst I have been a student.

I just simply wanted to know if anyone knew what the effect would be on HB if I claimed for WTC whilst setting up my company. I won't be earning any money for two years , I expect, as I am building up a portfolio. I can get an extra £80 per week in WTC, but will my HB drop by this amount.

No-one seems to be able to answer my question. HB office say they can't tell me as it "depends" on my circumstances, ditto for the Tax Credit office.

I just don't want to be worse off.

Thanks x

By the full amount, no, however it will be 61%.

If you make a trading loss, this will be reported back to the council, who can then up your HB in one go.

Only if your loss is bigger than both your total income and the total HB possible will you be truly worse off, however where student loan would be in this, I don't know.

CK

Caz3121

AngelPie78 wrote: »

I won't be earning any money for two years , I expect, as I am building up a portfolio. I can get an extra £80 per week in WTC, but will my HB drop by this amount.

You need to read up on what counts as working for self employed for working tax credits, going into it with a view that you will not be earning anything but will score £80 a week for saying you work 16+ hours per week with nothing to prove it may get you unstuck
The tax credits folk are getting wise to this (people say they are self employed to avoid having to sign on every fortnight and still get money) there was one post on here where someone had a large overpayment as their business was a website and they had made 2 sales in a year but counted offering a live chat on the website as their work. You will need to keep a diary of all the hours you are working and read up on Universal Credit where they will assume you are earning at least minimum wage after a certain period (certainly less than 2 years - if you are earning nothing for this length of time, is the 'business' viable...would you still do it if working tax credits did not exist?

Why not just carry on as is and build your portfolio claiming what you already claim and then, if it looks like you can start to earn money with a viable business, start your business

dktreesea

AngelPie78 wrote: »

OK well yes I have children, otherwise I would the getting or need CTC and HB.

AngelPie78 wrote: »

I know that student finance loans don't effect tax credits and working tax credits and that housing benefit does take student loans into account.

So back to the original question... Are we going along the lines of 61p drop in HB per £1 WTC?

Or do we not know because I'm a student?

X

Not quite. It all depends on what the applicable amount, i.e. the amount the government says you have to have in order to live, is for your circumstances. You could claim WTC and still be below the applicable amount, so still able to get the maximum available housing benefit, for instance.

You can only claim WTC once you actually start running your business, i.e. have some revenue coming in (regardless of whether you actually are making a profit yet.

This might be worth a read. From Northern Ireland, but tax credits etc work the same regardless of where you live in the UK.
http://www.nidirect.gov.uk/benefits-for-higher-education-students-with-low-incomes

The applicable ammount is made up of:

a personal allowance for yourself and your partner, if you have one
an additional amount for any dependant child or young person in your family
any premium that applies to you. A premium is an extra amount that you might get, for example, because you are disabled or have a disabled child.

These rates are from the citizens advice bureau;
Personal allowance or premiumAmountSingle or lone parent under 65 £145.40
Single or lone parent over 65 £163.50
Couple both under 65 £222.05
Couple where one or both of you over 65 £244.95
Additional amount for each dependent child or young person £65.62

On top of this there are other premiums, e.g.
Family premium £17.40 (all per week)

If you check out your current housing award, it should state the applicable amount somehwere on it. Whilever your income (and it doesn't all count, e.g. child benefit is excluded) is below this amount, the housing benefit will stay at the maximum amount.

AngelPie78

Ok I have spoken to Tax Credits and HB and the result of this was I can claim the extra WTC and will be around £30 a week better off.

The work I am doing towards my portfolio - which is separate to my university work - can be classed as working hours, according the Tax Credit Office. Especially as I will be hoping to get this up and running in the next few months and then start accepting clients. Even though the work I will do for them will be very cheap - it will still be work and I will be getting paid for it so my self assessment will show all of these costs.

I have been self employed in various roles for the last eight years and have never kept a record of my work, but never thought I needed to so will definitely start doing that now. Thanks for that advice.

Also, with regards to UC, I will read up on it this week but I don't understand why they would assume that a self employed person will be on minimum wage. What if you're just starting out and working at a loss for the first two years [or whatever the statistics suggest]? Am not being argumentative, but just thought you guys might be able to shed some more light on in it in layman's terms.

Thanks so much for all your advice and help.

p.s. the WTC/HB ratio is you lose 65p [HB] per £1 of WTC. Well, that's what it is in my Local Authority. The lady said I always needed to ring and get advice for my situation, because my student loans make it more complicated for them - but not for Tax Credits as they don't take student loans into account (as we know )

Thanks again xx

AngelPie78

Ok have read up a bit on UC and am understanding how that sits with the self-employment side of things. I am more than happy to demonstrate that I am actually working from home and, how working out of home and in my current circumstances would not work. I have seen various people about this, but don't want to go into all that on an open forum. Thanks for the heads up though - just makes me more motivated to get my portfolio up and running and get some clients in asap!

x

dktreesea

HMRC accept your declaration that you are self employed and will wait and see what your accounts are, i.e. evidence of income from self employment, which could be a long way ahead by the time you get your accounts in via self assessment.

Housing benefit can be a bit different. I've helped a couple of self employed people who had startups to get housing benefit, people who were previously employed, and in both cases, the local authority asked for bank statements showing evidence of the revenue flowing into the accounts.One of them asked for a forecast for the first 13 weeks of trading, but after that they wanted to see the bank statements for that period to see evidence of the actual income.

AngelPie78

dktreesea wrote: »

HMRC accept your declaration that you are self employed and will wait and see what your accounts are, i.e. evidence of income from self employment, which could be a long way ahead by the time you get your accounts in via self assessment.

Housing benefit can be a bit different. I've helped a couple of self employed people who had startups to get housing benefit, people who were previously employed, and in both cases, the local authority asked for bank statements showing evidence of the revenue flowing into the accounts.One of them asked for a forecast for the first 13 weeks of trading, but after that they wanted to see the bank statements for that period to see evidence of the actual income.

Ok thanks. I've been self employed in one manner or another for years and never been asked for any evidence with regards to this for Housing Benefit, other than my self assessment. Housing Benefit have said that they will consider this as unpaid work, while I am studying...

Will absolutely bear what you've said in mind and make sure I keep everything recorded etc.

Thanks.