Part time self employment, do the hours count for tax credits?

bimbo84

Hi,

I'm going for an interview on Monday for a job which is 22.5 hours a week. If I get it this won't qualify me for tax credits as I need 30 hours. For a while I've been considering setting up an Ebay business but I haven't gone ahead as I realise I probably won't make much of a profit to start with and all my effort has needed to go into finding a proper job.

However if I do get this job I'd like to give it a go. I'd only be working three days a week so I could easily devote 20+ hours to it.

I'm wondering how I prove this for tax credit purposes though? Or does it only count if I'm making a decent profit?

Thanks in advance for any advice.

BigAunty

Currently, working tax credits have a threshold determined by hours spent on the business for the self employed - profit is irrelevant.

In reality, the HMRC have the reputation for targetting low or non-profit businesses for compliance checks and forcing the claimant to pay back the WTC if they can't prove their hours.

In future, under the proposed switch to the Universal Credit system when tax credits are scrapped (if/when UC is ever implemented), then there will be significant changes for the self employed so do read up on that.

The background is that the govt identified that the self employed were long-term benefit dependent and they want them to be more self sufficient and wind-up badly performing businesses or seek regular employment on top, for example.

bimbo84

Thanks for the responses.

I'll have to give this some thought. I don't want to end up in a position where I have a business that isn't making much, a low paying job and HMRC chasing me for money.

I would be putting the hours in but proving it is another matter.

Maybe I should wait until I'm working 30+ hours in a normal job or jobs before I start up anything. Then of course it's finding the time!