New rules for claiming working tax credits self employed

itsnotmeagain

Just had a letter from HM Revenue informing us about changes to Working Tax Credits.

It goes on to say that to be eligible for Working Tax Credits
you should be getting paid or expect to get paid for your self employed work.
your self employment should be done on a commercial basis with a view to making a profit.

Now my issue is that my wife is disabled and she started a small online business about five years ago as it would be therapeutic for her condition, we treat it as a business keeping all paperwork & filing returns but it barely breaks even and she does not take a wage.

Looking at the letter it looks as if we would lose the Working Tax Credits, is this correct ?

Thanks in advance

Darksparkle

Whether you would lose tax credits depends entirely on the household situation of your household. Do you work? Do you have children? What disability benefit does she receive and at what rate?

The disabled are treated no differently when it comes to self employment as the non-disabled. The difference with a disabled person is that they don't need to work as many hours.

However you need to give more detail of your personal circumstances to answer your question.

HappyMJ

itsnotmeagain wrote: »

Just had a letter from HM Revenue informing us about changes to Working Tax Credits.

It goes on to say that to be eligible for Working Tax Credits
you should be getting paid or expect to get paid for your self employed work.
your self employment should be done on a commercial basis with a view to making a profit.

Now my issue is that my wife is disabled and she started a small online business about five years ago as it would be therapeutic for her condition, we treat it as a business keeping all paperwork & filing returns but it barely breaks even and she does not take a wage.

Looking at the letter it looks as if we would lose the Working Tax Credits, is this correct ?

Thanks in advance

If you read the letter it doesn't state how much you need to make in profit so if you can adjust the figures so she is making at least £1 of profit per day then that would be acceptable.

They are trying to make people, working for nothing, thinking about making a profit instead of just doing it as a subsidized hobby.

Darksparkle

HappyMJ wrote: »

If you read the letter it doesn't state how much you need to make in profit so if you can adjust the figures so she is making at least £1 of profit per day then that would be acceptable.

They are trying to make people, working for nothing, thinking about making a profit instead of just doing it as a subsidized hobby.

Even if they made £1 a day profit, tax credits might not accept it.

HappyMJ

Darksparkle wrote: »

Even if they made £1 a day profit, tax credits might not accept it.

It's still a profit. They haven't specified how much...the OP's partner is disabled how about 3.5 hours a day at £6.70 an hour or £23.45/day. If they declare a profit of £6,420 a year or less tax credits won't be affected. They won't pay tax either. They don't have to claim all the expenses they have against tax and can show a larger profit without any change to the money they get.

FRESTER

I just got this letter.

Be ready for a review of your working tax credits.:eek:

Luckily this tax year we are actually making min wage x 30 hours :j

Happy new year and RIP Lemmy :A

tomtontom

HappyMJ wrote: »

It's still a profit. They haven't specified how much...the OP's partner is disabled how about 3.5 hours a day at £6.70 an hour or £23.45/day. If they declare a profit of £6,420 a year or less tax credits won't be affected. They won't pay tax either. They don't have to claim all the expenses they have against tax and can show a larger profit without any change to the money they get.

You are implying that the OP should fix their accounts so as to maximise their benefit entitlement. Making a false declaration, even one that makes them appear to be earning more than they are, would be a fraudulent act and leave the claimant open to prosecution. It's pretty stupid advice and should be ignored.

Darksparkle

HappyMJ wrote: »

It's still a profit. They haven't specified how much...the OP's partner is disabled how about 3.5 hours a day at £6.70 an hour or £23.45/day. If they declare a profit of £6,420 a year or less tax credits won't be affected. They won't pay tax either. They don't have to claim all the expenses they have against tax and can show a larger profit without any change to the money they get.

HMRC have specified that claims will be selected for review if not making NMW x working hours. People should be aiming to earn that at least.

Marktheshark

There is no legalisation stating what profit anyone should make, so if challenged they would be on a sticky wicket, if I can be corrected and someone can show actual legislation that state NMW must be earnt I would stand corrected.

I can find it in UC, but not working tax credit.

FRESTER

Darksparkle wrote: »

HMRC have specified that claims will be selected for review if not making NMW x working hours. People should be aiming to earn that at least.

Yep

We expect one because we didn't make min wage last tax year but luckily now we are so the only thing for us to worry about is printing all the invoices etc.

pmlindyloo

Marktheshark wrote: »

There is no legalisation stating what profit anyone should make, so if challenged they would be on a sticky wicket, if I can be corrected and someone can show actual legislation that state NMW must be earnt I would stand corrected.

I can find it in UC, but not working tax credit.

I can't quote legislation but the Gov. website clearly states that the profit made per hour should be at least the NMW. (December 2015)

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

In the OP's wife situation this is clearly not a start up business and although they keep business records no profit or very little appears to be made. it seems that this business would be subject to investigation.