Worried I might lose tax credits and have to go back on the dole

Michael2015

Hi, I was unemployed for three months, from December 3rd, 2014 - to March 2nd, 2015.

I voluntarily quit the dole so I could go self employed.

My business is very new I have been claiming Working Tax Credits for three months. Sometimes I only earn as low as £43 profit per week so I need the tax credits to bump up my income. I'm not planning to be on WTCs for a long time. It's just to help start me off in business and money is short.

Luckily I am single, no dependants.

My worry is, if the government will axe WTCs in this month's budget and I will be forced to close my business and go back on the dole.

It's a bit annoying since I know someone who's on £350 a week and he's been claiming WTCs for ten years. But because I get off my bum and actually try to do something with my life - ie, get off the dole and provide a service for people, I feel cheated. Like I am being kicked in the teeth.

I agree with people who say people on £350 per week should not claim WTCs. Boy, if I had that I would feel I was a millionaire.

Any help please. Thanks.:)

Michael2015

Thanks. I hope you're right.

missbiggles1

However, you may well be expected to be making more than £43pw for 30 hours work.

Michael2015

That's £43 profit. Obviously I am making more. Sometimes it's £90 profit per week.

It varies. I am self employed. I am not on a weekly wage.

But it averages out.

missbiggles1

Michael2015 wrote: »

That's £43 profit. Obviously I am making more. Sometimes it's £90 profit per week.

It varies. I am self employed. I am not on a weekly wage.

But it averages out.

Even £90 is well below NMW for 30 hours' work which is what, I believe, may come to be expected for WTC.

Michael2015

Well I can't help that. I am working the hours PLUS more hours.

They know the situation.

Michael2015

And what about those new businesses who operate all year and make a loss.

Least I am managing to claw something out of my efforts per week. I work unsociable hours too. Sometimes 2-5am - because the factory I use is in China.

Then I work during the day too.

bloolagoon

Michael2015 wrote: »

Well I can't help that. I am working the hours PLUS more hours.

They know the situation.

It is being looked at and soon will need to change. Hopefully by then you will be in profit of 35xNmw.

However, no one can guess the budget. I think it's unlikely they will stop WTC but they could certainly insert the min floor limit or increase hours or any other number of things.

dori2o

blondebubbles wrote: »

Why can't you help that? Couldn't you increase your rates? It would be expected that your profit would increase.

The rules from April 15 state that if you don't work NMW x qualifying hours then you could be subject to a compliance check and be asked to provide evidence that you are in a regular and organised trade, profession or vocation on a commercial basis and with a view to achieving a profit.

The self-employment should also be structured, regular and ongoing.

If you're going to provide information on the subject you would do well to provide all the information and not just the bit likely to scare the person asking the question the most.

How the changes will apply
Self-employed WTC claimants with earnings below a threshold (this will be based on working hours and the National Minimum Wage) will be asked by HMRC to provide evidence that they are in a regular and organised trade, profession or vocation on a commercial basis and with a view to achieving a profit.

The information we ask for should be available as part of normal business activity, for example receipts and expenses, records of sales and purchases. We may also ask for supporting documents such as a business plan, planned work, cash flow and profit projections.

During the early stages of self-employment it may prove difficult to make a profit. If someone in this situation claims WTC they may be asked to show that they have a commercial approach and how their business would become profitable. This could be demonstrated in a business plan.

HMRC will use the information provided to reach a decision about the claimants’ current WTC award.

Claimants may lose their WTC if they cannot provide the evidence we ask for and may have to repay any tax credits they are not entitled to.

Claimants who disagree with our decision can ask for us to look at the decision again.

As long as you can show that you are running a business with a clear plan, and show that there is an expectation that this will grow into a profitable business which rovides an income in excess of the NMW, then you will be fine.

If you keep no paperwork, have no accounts (even just a basic in/out will suffice), can not show what work you have done, cannot show work which has been done, cannot show evidence of advertising etc , i.e cannot show evidence of there being anything more than a hobby business, then you are likely to be in trouble.

The unfortunate thing is that this Government and the JC forced thousands into self employment as ebay sellers etc (trades with no future) as a way of fudging the unemployment figures. Cameron and Osbourn have been crowing of the huge increase in Entrepreneurs, those starting their own business, yet don't seem to realise that most of them were a sham and will be ended once they are investigated following these WTC changes. Which will lead to a huge surge in the unemployment figures again.

It's just another form of attack ion the most vulnerable, but this one has been fully planned to attack those people the government claimed to have helped into the world of work, the people whom they had set free from a life on benefits.

It's the same scam Thatchers government pulled when they transferred millions from the dole onto IB.

Thats all Cameron does, recycle the worst of the old Tory policies, i.e. Right to Buy.

missbiggles1

dori2o wrote: »

If you're going to provide information on the subject you would do well to provide all the information and not just the bit likely to scare the person asking the question the most.



As long as you can show that you are running a business with a clear plan, and show that there is an expectation that this will grow into a profitable business which rovides an income in excess of the NMW, then you will be fine.

If you keep no paperwork, have no accounts (even just a basic in/out will suffice), can not show what work you have done, cannot show work which has been done, cannot show evidence of advertising etc , i.e cannot show evidence of there being anything more than a hobby business, then you are likely to be in trouble.

The unfortunate thing is that this Government and the JC forced thousands into self employment as ebay sellers etc (trades with no future) as a way of fudging the unemployment figures. Cameron and Osbourn have been crowing of the huge increase in Entrepreneurs, those starting their own business, yet don't seem to realise that most of them were a sham and will be ended once they are investigated following these WTC changes. Which will lead to a huge surge in the unemployment figures again.

It's just another form of attack ion the most vulnerable, but this one has been fully planned to attack those people the government claimed to have helped into the world of work, the people whom they had set free from a life on benefits.

It's the same scam Thatchers government pulled when they transferred millions from the dole onto IB.

Thats all Cameron does, recycle the worst of the old Tory policies, i.e. Right to Buy.

Why are people who are unemployed or claiming WTC when running sham businesses seen by you as vulnerable?

IME, most people who are in this position have chosen to be because they can avoid the constraints of claiming JSA and still get as much money. The fact that the government has used this for their own ends is a separate issue.

Londonsu

Why on earth would you have to go back on the dole, seems to me you think the only sources of income for you is benefits either in the form of WTCs or JSA, there is a another form of income you know, its called a salary and you go out and find a job any job to earn it