Benefits, self-emplyment, "gainful employment" and "minimum income floor"?

Marktheshark

blondebubbles wrote: »

Tax credits do not have a minimum income floor. Tax credits have not said that they do.

IQ has posted what the change in legislation was. There is also info here - http://www.legislation.gov.uk/uksi/2015/605/pdfs/uksi_20150605_en.pdf

Tax credits also don't have sanctions.

With the keyword of Realisation.
They are on a very sticky wicket anyone they refuse Tax credits to who is Self employed if they were to make legal challenge.
Then again they were on Workfare and they lost in court on that one.

missbiggles1

From https://www.gov.uk/working-tax-credit/eligibility

"You may be investigated if the average hourly profit from your self-employed time is less than the National Minimum Wage. The Tax Credit Office will ask you to provide:

business records
other details, like a business plan, if they need more information,"

rogerblack

Marktheshark wrote: »

With the keyword of Realisation.
They are on a very sticky wicket anyone they refuse Tax credits to who is Self employed if they were to make legal challenge.
Then again they were on Workfare and they lost in court on that one.

Err - no, for several reasons.
Firstly, if you mean 'legal challenge' - the only way you can actually challenge the legality of their ability to make this decision - rather than the specific decision - is a judicial review.
This is _really_really_expensive.

Secondly, even if you are willing to pay the fees, and find a barrister willing to help, the government is essentially certain to win.

Tax credits do not have to prove that you are not running a qualifying business to beyond a reasonable doubt.
They have to prove that you are not doing so to the balance of probability.
That is - only that it is more likely than not.
The limits on this decision are that it has to be of a quality which is better than 'no reasonable person could have made this decision'.

The 'Loss' on workfare was on very narrow technical grounds, and has affected essentially nobody other than those who had already complained on the same grounds before the decision.

Judicial review does not look in general at fairness or rightness of a legal decision or law.
Only if it complies with all treaties and obligations of the government.

Gavin234

What happens if someone is still not making nMW per hour in the second year, they ask for proof of why and you show your time diary and earning and everything? The business looks good for the future but you are still struggling?

Gavin234

FBaby wrote: »

They can't force you to close a business. It means that you won't be entitled to tax credits any longer, so will need to consider another mean to support yourself, maybe by then if you are confident that the business will take off with just a bit more time, looking at a bank loan the way to go.

In other words they force you to close the business and go on JSA? This is not going to be good for the precious recovery!

FBaby

The business looks good for the future but you are still struggling?

If it really looks good, then why are you saying that a bank loan is not an option? The only way you can decide that it 'looks good for the future' is evidence of future orders of goods/services, so with that in hand surely you can convince a bank to loan you the money to keep you going until there.

Sounds to me that 'looks good for the future' might come down more to wishful thinking than a promising business plan.

Icequeen99

rogerblack wrote: »

Err - no, for several reasons.
Firstly, if you mean 'legal challenge' - the only way you can actually challenge the legality of their ability to make this decision - rather than the specific decision - is a judicial review.
This is _really_really_expensive.

Secondly, even if you are willing to pay the fees, and find a barrister willing to help, the government is essentially certain to win.

Tax credits do not have to prove that you are not running a qualifying business to beyond a reasonable doubt.
They have to prove that you are not doing so to the balance of probability.
That is - only that it is more likely than not.
The limits on this decision are that it has to be of a quality which is better than 'no reasonable person could have made this decision'.

The 'Loss' on workfare was on very narrow technical grounds, and has affected essentially nobody other than those who had already complained on the same grounds before the decision.

Judicial review does not look in general at fairness or rightness of a legal decision or law.
Only if it complies with all treaties and obligations of the government.

That is not strictly true. On the point of what is a 'view to the realisation of profit' you wouldn't need a JR - you would appeal to first-tier Tribunal and onwards from there up through the courts.

And JR does have some consideration of fairness of rules - this is a good summary http://www.publiclawproject.org.uk/data/resources/6/PLP_Short_Guide_3_1305.pdf - it is often used to challenge whole Government policies.

IQ

rogerblack

Icequeen99 wrote: »

That is not strictly true. On the point of what is a 'view to the realisation of profit' you wouldn't need a JR - you would appeal to first-tier Tribunal and onwards from there up through the courts.
IQ

Quite - this would be challenging the particular decision, not the general policy, and would only set limits in the extreme cases.
The upper tribunal is in general extremely reluctant for good reason to randomly pick limits out of the air that are not in legislation.
They essentially always give limits only in absolute extremes - not what is 'reasonable'.

So, you might get a decision like 'someone on NMW-1p*40 hours is running a business' - as no reasonable person would disagree.

You're not going to get a decision saying '55% of NMW is the cut-off point in all circumstances', which you would need in order to effectively clarify the law, and mean that there was certainty around decisions.

AG47

missbiggles1 wrote: »

From https://www.gov.uk/working-tax-credit/eligibility

"You may be investigated if the average hourly profit from your self-employed time is less than the National Minimum Wage. The Tax Credit Office will ask you to provide:

business records
other details, like a business plan, if they need more information,"

Say you have a letter that you are going to be investigated, then you inform them you stop trading and go on JSA. Will they still want proof from before or will they try and get some of your WTC back?

Icequeen99

AG47 wrote: »

Say you have a letter that you are going to be investigated, then you inform them you stop trading and go on JSA. Will they still want proof from before or will they try and get some of your WTC back?

It depends when they do the investigation - it could be retrospective to the start of the tax year.

IQ