Tax Credits

setmefree2

Oh dear - Ms Dorrell should have got her facts straight before she went on National Television.

However, accountants said Ms Dorrell's salon business may now be looked at by HM Revenue & Custom because self-employed tax credit claimants should be working 'with a view to profit' - and she says she does not make one.

http://www.dailymail.co.uk/news/article-3276961/Hardworking-mother-four-stunned-Tory-minister-silence-Question-Time-unlikely-affected-tax-credit-cuts.html

wotsthat

setmefree2 wrote: »

So let me get this straight, as I know nothing about tax credits - I can set up a business in my front room, make a loss and the government will give me money?

The rules have changed. Before April self employed for the purposes of tax credits meant the work was done for payment, or in expectation of payment, and they met the remunerative work conditions.

Now it means the self-employed activity is done on a commercial basis with a view to realising a profit and it must be organised and regular

Very slightly more stringent but still a convenient method for the unemployed to gain access to in-work benefits without the inconvenience of working.

setmefree2

zagfles wrote: »

People on £42k should not be on any sort of benefit, agreed, not tax credits, not child benefit. And they wouldn't, if we had a tax system like most other countries, where non earners were allowed to use their tax allowance against the income which supports them. Fully transferrable allowances between couples, and allowances for children.

Not the hypocrisy of a system which says to a non-earner "you can't have any benefits, your husband/wife/parent earn a decent wage, they can support you - oh, but you can't use your tax allowance against the income we expect you to live on".

The 10% transferrable tax allowance is a tiny step in the right direction, but pretty insignificant at that level.

Good point imho.

setmefree2

beecher2 wrote: »

I expect so too and if more people knew the eyewatering amounts that some people are getting I think they would be less silent. If I was earning £10k and my fellow worker was taking home £20k for the same work I'd be raging mad.

The Tories need to get those stories out there.

wotsthat

Graham_Devon wrote: »

Keeps you off the unemployment stats though....

We could redefine some of the self employed as unemployed but it makes no net difference to the economy. There's little point worrying about the absolute unemployment number - much more enlightening to concentrate on the quarterly changes.

IMO this isn't an attempt to massage the stats - the government don't fully understand how tax credits are being used.

The bigger concern is that rent seeking is unproductive and wasteful. Tax credits are given to people that don't need them and it holds people back. It's the UK's perpetual problem - if people put half as much effort into doing something productive as they do rent seeking we'd be seeing a much stronger economy.

setmefree2

It says in the mail Ms Dorrell gets £400 a week (£21,000 pa ) in tax credits and child benefit plus she gets maintenance from her ex.

setmefree2

So I'm starting to get a different take on these sort of headlines

Self-employment in UK at highest level since records began

Self-employment in the UK is at its highest level since records began almost 40 years ago, according to a report by the Office for National Statistics, with taxi-driving, construction and carpentry among the most common jobs. There are 4.6 million people working for themselves, with the proportion of the total workforce self-employed at 15% compared with 13% in 2008, and 8.7% in 1975.
Fewer people left self-employment over the last five years than at any period in the last 20 years, with the ONS suggesting that they might have struggled to find an alternative job during the downturn. It also pointed to the increasing number of people choosing to work for themselves beyond the state pension age of 65.
The ONS said more people than usual staying in self-employment was the main reason behind the sharp rise in numbers over recent years, which itself has accounted for the majority of the overall rise in employment since early 2008.
"The rise in self-employment can be accounted for by fewer people leaving self-employment than in the past. About 886,000 people who were self-employed in 2009 had left by 2014, compared with 1.3 million who were self-employed in 2004 leaving by 2009," the ONS said.
Of the 1.1 million increase in the total number of workers in the UK between the first quarter of 2008 and the second quarter of 2014, 732,000, or just over two-thirds, were self-employed.

http://www.theguardian.com/uk-news/2014/aug/20/self-employment-uk-highest-level

setmefree2

FT

The BoE also found little evidence of unusually high underemployment among the self-employed. Even though there has been an increase in the proportion of self-employed people who earn only £5,000-£7,500 a year, the self-employed do not say they want to work any more hours on average than employees. The increase in low-paid self-employment could simply represent “a growing prevalence of lower income, less intensive self-employment”, rather than an increase in the slack in the labour market, the article suggests

http://www.ft.com/cms/s/0/3b015100-c805-11e4-9226-00144feab7de.html#axzz3p0aD7jLx

wotsthat

setmefree2 wrote: »

It says in the mail Ms Dorrell gets £400 a week (£21,000 pa ) in tax credits and child benefit plus she gets maintenance from her ex.

I don't have a particular problem with the Tories using her as a 'poster boy' for everything that's wrong with tax credits because she's opened herself to scrutiny but it's not a very grown up way of formulating policy.

setmefree2 wrote: »

Oh dear - Ms Dorrell should have got her facts straight before she went on National Television.

It might be the talking head accountants that have got the facts wrong. Not making a profit is not the same as operating with a view to making a profit.

setmefree2

wotsthat wrote: »

It might be the talking head accountants that have got the facts wrong. Not making a profit is not the same as operating with a view to making a profit.

Ms Donnell said she was having her tax credits taken away - she isn't. She says she works bloody hard for her money - she clearly doesn't. (How can you not make a profit running a nail bar from your front room?)

Someone works hard to give her £21,000 worth of benefits - it's not her however.

I'm not saying it's not hard running around after 4 kids. She is probably confusing this with working hard for the money she's been given.