Letter from Concentrix on behalf of HMRC - Self employed re- Working tax credit

AutumnMoon

Hi,

I'm not sure if I should be concerned and would really appreciate any advice?

I'm a single parent and I live with my Mother. I work 16 hours a week whilst my young child is in school. The rest of the school week I do voluntary work in the field I am hoping to eventually be able to get myself into (And then I won't need these bloody tax credits)

I received a letter last week saying they are acting on behalf of HMRC and they are doing random checks and I have been selected (not sure if this is true?) They want to know if i'm still self employed and if i'm still working 16 hours, which of course I am or I would have contacted them.

They have requested my UTR number, copies of any adverts placed, any invoices, a letter outlining what I do for a living, a breakdown of my hours, a diary with any appointments in and also bank statements from April 2014 to November 2014. I closed down my business account a couple of years ago as the fees were too high, so I am paid into my current account.

I work 2 self employed jobs, the first one is from home on the computer, I work 8 hours a week in this job and I am paid through my bank fortnighly. I'm not paid by the hour, I am paid for the work I complete in those 8 hours. It averages out to be about £100 every two weeks (sometimes a bit more, rarely less) that goes into my bank account.

My second job is as a Reflexologist/Indian head masseuse, I also work 8 hours during school hours doing this. I have a small group of loyal clients, I am not paid through the bank, it's cash in hand (but all declared) nor do I put my earnings through the bank as it's not worth it, it's not much money and I need it for petrol/food/clothes for my child etc. I do however, have an account book with all my appoitments in, the treatment they are receiving, and also how much profit i've earned that week, every two weeks I put my earning from my other job on there too, I use this book for my figures for my tax return. I don't advertise so have no copies of adverts ( I advertised a few times last year, cost me a lot of money and I got no response - didn't keep copies of these adverts)

I don't give my clients receipts as they don't claim back the cost, plus the majority are elderly and I didn't think it was necessary (may have to rethink this though) Nor do I invoice them.

They've not asked for receipts, which is a good job as my overheads are so low (a bit of peppermint foot spray and oil) I don't claim expenses back and I rarely need to buy stock so I don't keep the receipts.

Do you think i'm going to be ok or wil they stop my tax credits? I am going to send them the bank statements, account book which has all appts in and profit etc, a letter outlining my work and a breakdown of my hours, and also my UTR number. I'm so scared incase they don't feel this is sufficient. I won't be able to live without this money. I was going to mention my voluntary work in the letter incase they wonder why i'm not working more than 16 hours, do you think this is wise?

Anyone else had one of these letters? Really worried as to why they would randomly selected me.

AutumnMoon

thanks for your reply. do you think they will take an age to get back to me? i'm worried sick and would rather know either way asap.

i am on course to pulling in minimum wage for my hours worked, thankfully. but i didn't last year. could they say my business isn't viable and take them away because of this? i was under the impression this would happen when UC came into play?

Marktheshark

Who made the assumption that self employed people keep a diary ?
It is not a tax requirement to log your hours.
Yet another retrospective back dated change ?

Icequeen99

Marktheshark wrote: »

Who made the assumption that self employed people keep a diary ?
It is not a tax requirement to log your hours.
Yet another retrospective back dated change ?

It isn't a retrospective change, for at least the last 4 years their guidance has included diaries as part of compliance checks. They also used to suggest it on their website pages for the self-employed (before it moved to GOV.UK and got removed).

There is no requirement to log hours of course, but it is one piece of evidence to answer the question of whether the work is qualifying remunerative work which is whether it is done for payment or in expectation of payment.

IQ

AutumnMoon

Icequeen99 wrote: »

It isn't a retrospective change, for at least the last 4 years their guidance has included diaries as part of compliance checks. They also used to suggest it on their website pages for the self-employed (before it moved to GOV.UK and got removed).

There is no requirement to log hours of course, but it is one piece of evidence to answer the question of whether the work is qualifying remunerative work which is whether it is done for payment or in expectation of payment.

IQ

I do log hours, I do everything I thought I needed to do, besides issuing receipts, but as I say they haven't asked for those.

Do you, or anyone else who has any understanding of how it all works, think they will stop my working tax credits?

I will be furious, don't know how i'd cope. I need them in the short term. I have to pay rent to my Mum and survive in general. I'm working as hard as I can considering I have no childcare at all besides school.

AutumnMoon

blondebubbles wrote: »

They could say you don't work enough hours.

But for a single parent with a child in reception, the hours I have to work minimum are 16 hours, which I do, so I don't see how they can say I don't work enough hours? I think if anything, because my Holistic therapy work payments don't go through the bank, they would think i'm making it up? As all I have to prove it is my account book with appts in and a record of what i've been paid. I have all my qualifications of course but they don't want these.

AutumnMoon

The list of things they have asked for I can provide, besides invoices - don't know any mobile holistic therapist that invoices their client. Also can't provide copies of adverts as I don't advertise, I tried twice and it didn't work and was expensive. I think if I explain in the letter what my line of work is, and I base my tax return figures on my account book as it's all recorded there, then that's all I can do really. Perhaps in future I need to put my holistic payments through the bank.

The letter say we just want to confirm you are still self employed and work 16 hours per week.

AutumnMoon

blondebubbles wrote: »

I don't know much about holistic therapists. So do you offer different treatments or always the same thing?

I'm just thinking if you did different things then maybe you had a price list that also includes timings? Like when I've went for massages before it can sometimes say 30 mins or an hour. Usually when I book these things I do get some kind of receipt and I would imagine they'd have a copy. I'm just guessing here.

Do you have the same clients every week? Is it always for 8 hours of sometimes more or less?

I only offer the two treatments now that i'm mobile, to difficult to cart all the equipment around that i'd need to offer the other treatments. I used to work 16 hours and rent a room, I didn't do the other self employed job then, but this was in the last tax year and they aren't interested in that, they only want to know from April 2014 to November 2014.

When I rented the room I had a price list, pointless sending them that as it's from the last tax year, it's not relevant to now, everything has changed. It's always 8 hours for the holistics. My child started school in September and i'm finding it difficult to work any more hours as I have no childcare. It was much easier when she was in private nursery. My clients are the same, I have about 12 regulars and sometimes family or friends of theirs get treatments.

This may not be morally right but I don't advertise anymore as I don't want to grow the business. I put my heart and soul into it for over 2 years, scrimping and scraping, renting a room, spending all kinds on new courses, advertising, promotions etc and it didn't work, i barely broke even. People don't have the cash to spare for such treatments. I'm on course to making min wage now but that's because I also work from home 8 hours a week. I want out, hence why I do voluntary work in a completely different area in the hope that one day I get a full time job in it.

How about business cards, could I send those in? Would that help do you think? They show the days I work (Thurs and Fri) but not the times, as in the school holidays ex will have daughter on the days I work and I can do evenings instead in the hope of squeezing a couple of more appts in. I can say in my letter that I simply advertise through my business cards, which I do really as I leave them in local businesses - although haven't had so much as an enquiry since I got my new ones printed.

AutumnMoon

Another thing I have thought of is I could print the VAT invoice off Vistaprint, this is where I got my business cards, however I wasn't sure how to do them so my friend's name and address are on the invoice (she designed them for me and had them dispatched to her house, I am kicking myself now) But they do have the name of my business on etc?

FRESTER

AutumnMoon wrote: »

Another thing I have thought of is I could print the VAT invoice off Vistaprint, this is where I got my business cards, however I wasn't sure how to do them so my friend's name and address are on the invoice (she designed them for me and had them dispatched to her house, I am kicking myself now) But they do have the name of my business on etc?

Just out of interest have you only been self employed for a short amount of time ?
They seem to be targeting the more recently self employed they didn't check a couple of years ago.
I had one of these a couple of years ago.It came back ok but is a worry.

AutumnMoon

Hi, no i've been self employed since May 2011.

Worried if I send my business cards off then they will want to see my invoice for them & the invoice is in my friend's name & address who kindly created them for me. Not sure if this would be an issue?