Newly self employed and wtc

icarly71

Hello, I'm thinking of going self employed with a small cleaning business .i will be starting off at 16 hrs per week and paying myself £8 per hr .i want to claim tax credits to help me get started , what can I expect with the new rules for self employed ? I'm a single parent of one child , no other income and I rent , many thanks

icarly71

I already get ctc , how do I apply for the wtc ? Just phone them ? What happens next ? Interview ?

rogerblack

blondebubbles wrote: »

You call them with the details, start date, hours, UTR, expected income. If further checks are going to be done they will write to you

And of course, be _extraordinarily_ careful about recording every single thing you do for the buisness.
Keep records on everything, as much as possible.
It is not the case that just because they've awarded you, they may not come back five or six years in the future and say that your buisness wasn't 'real'.

icarly71

Business wasn't real ??? What'd be the point in that , how can you prove it is real ?

rogerblack

icarly71 wrote: »

Business wasn't real ??? What'd be the point in that , how can you prove it is real ?

In order to later disqualify you for tax credits for the period you were claiming them.

The official intent is 'action against fraudulent claims'.

tomtontom

Is your child at school, is it possible to do more than 16 hours?

rogerblack

blondebubbles wrote: »

People say they are working the required number of hours to claim tax credits then hope they don't get caught out.

Or people actually are doing the required hours, and then some years later cannot prove that they were to HMRCs satisfaction because they were never informed at the time their submission was inadequate.

icarly71

You're scaring me off now ! I would imagine lots of people don't keep strict records

FBaby

Most people who run genuine businesses do keep very strict records. They also don't limit themselves to the number hours that is just the limit to what they can claim in benefits. They take any business they can manage to start with rather than turning down offer and give their business a bad name.

It sounds like the purpose of you starting self-employment is to claim wtc. They are now doing many more checks to ensure that this is not the case and the business is indeed acting as a normal business. The question you might want to ask yourself is whether you would invest your time and efforts in the business if tax credits didn't exist?

Teahfc

icarly71 wrote: »

You're scaring me off now ! I would imagine lots of people don't keep strict records

You are raising questions already, happy to do just minimum hours but not aware that you have to keep records of all your activities.
Should you also mot make minimum wage on your " venture" then questions will be asked. Surely a minimum 20 hours work is possible ?

HappyMJ

icarly71 wrote: »

You're scaring me off now ! I would imagine lots of people don't keep strict records

There are people out there working cash in hand not declaring that to the HMRC and as there is no paper trail it becomes very difficult for the HMRC to bring a case against them for unpaid tax and national insurance. Those people that do not keep records should not be claiming working tax credits claiming they are working over 30 hours per week as the HMRC will definitely be asking questions.

If you're going to be claiming working tax credits you need to keep accurate records of not just your income and expenses but also how much time you spend each week on your business. Although time spent on administration and time spent travelling to your clients counts as working time I would highly recommend that you only count chargeable hours to your clients as working time. If you need 16 hours for WTC's then make sure each week you are on a client site for 16 hours and don't count the time spent on admin or how long it took you to get to/from the client site.