DWP seem to demand business accounts unfairly

dippy3103

I can't see how it could be seen to be unfair to check tax payers money is not being abused.

fishybusiness

Hang on a minute, did OP really say this?

I am on Working Tax Credit and having received absolutely no payments for work from the company or anywhere else

No payments = no wages.

No wages = no real income from company

No real income from company = no justification for Working Tax Credits

OP regarding your accounts, no point is explaining, Local Authority are absolutely allowed to ask for accounts. There is some legislation in the HB rules defining how to check for hidden money in limited companies and if and when it should be classed as notional income.

No doubt they are wanting to check that out, and why not.

Also, I would expect HMRC WTC will catch up with eventually now RTI is used for salary reporting.

nannytone_2

working tax credits only require that the claimant work a certain number of hours a week.
there is no requirement to actually earn anything at all .... just that they spend the time in anticipation of earning

fishybusiness

working tax credits only require that the claimant work a certain number of hours a week.
there is no requirement to actually earn anything at all .... just that they spend the time in anticipation of earning

Afraid this is just not true. Has been a common misunderstanding for years, have a look at following info.

Look here

http://www.revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/self-employed/

HMRC will apply this test to new claims from 6 April 2015 and gradually check existing claims to see if those claimants also meet the new test. HMRC will write out to existing claimants about the new test from July/August 2015 before they start to apply these rules to existing claims later in the year.

Notably, this means for example that where a claimant says they normally work say 25 hours a week even if they are only required to work 16 hours a week to qualify for working tax credits, they may be selected for a check if their earnings fall below the threshold based on the hours they declare.

Here

http://www.hmrc.gov.uk/manuals/tcmanual/TCM0126220.htm

The qualifying remunerative work condition applies to self-employed earners in the same way as to employed earners.

A self-employed earner’s expectation of payment must be a reasonable one. The customer must confirm that the work is done in expectation of payment. It doesn’t matter that the self-employed earner might trade at a loss.

OP as director could simply be an Office Holder, but then would have to justify his hours to claim WTC, alternatively he could be an employee rather than self employed and would have to be paid regularly and send payment details via RTI.

In basic terms, claiming WTC has to be backed up with evidence of remuneration.

fishybusiness

A company director is an 'employee' for tax credit purposes so would need to declare any earnings and dividends.

However a company director is not entitled to NMW so could declare no earnings and if they take no dividends then have no income for tax credit purposes.

However one of the conditions to claim is:

The work must be done for payment or in expectation of payment.
This means work for an employer in return for wages salary or some other measurable reward

If after 20 years there is still no salary or dividends I do not think tax credits would accept the work is done in expectation of payment.

Absolutely. If OP did not claim WTC all would be good