New rules for claiming working tax credits self employed

FBaby

5 years is a long time for a business to still make no profit. After such a time, it becomes hard to believe it can ever become self-sustainable.

WillowCat

If HMRC finds your business not viable for tax credits purposes then they can disallow your working tax credits.

You would be free to claim income support (as her carer) or for her to claim ESA. In each case it would be a joint claim.

You would of course be free to continue to run the business - on ESA she can apply for 'permitted work' while on income support you would simply pay back any profit earned each week which is over the disregarded amount.

Marktheshark

Universal credit puts a boot straight through the non or low profit and live off benefits business plan, so considering a change might be better now for quite a few people.

emmsie123

Says it all in here.
http://www.revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/self-employed/

teddysmum

FBaby wrote: »

5 years is a long time for a business to still make no profit. After such a time, it becomes hard to believe it can ever become self-sustainable.

Some years ago, my husband had a small business and I remember his mentioning, way back then, that they could declare that a business which doesn't go into profit(given time) to not be a business.


It could be argued that the OP's wife sell on behalf of a charity, taking out any costs, as that would still be therapeutic.

Becles

Is this just applicable to people claiming working tax credits?

I'm a self employed single mother, but I only claim child tax credits and not working tax credits. Therefore I've got nothing to worry about?

fishybusiness

Thanks to emmsie, great link, defines WTC requirements very well.

Back to the OP, this sums it up very well

but it barely breaks even and she does not take a wage.

If you added a wage, your wife's business would not break even. It would be minimum national wage x no of hours worked each week. That may be about £5500 per year at 16 hours a week.

After 5 years she has shown the business is not viable, after all a business is there to make money.

Really, the business stands to generate WTC without generating legitimate income, which seems wrong, and HMRC should be stopping it.

NYM

Becles wrote: »

Is this just applicable to people claiming working tax credits?

I'm a self employed single mother, but I only claim child tax credits and not working tax credits. Therefore I've got nothing to worry about?

I believe so

Darksparkle

Becles wrote: »

Is this just applicable to people claiming working tax credits?

I'm a self employed single mother, but I only claim child tax credits and not working tax credits. Therefore I've got nothing to worry about?

I assume by that you mean you work less than 16hrs so aren't eligible for WTC?

AG47

Say you are investigated and found your not pulling your weight?

Is it a case of you are forced to stop trading, or do you get a warning to start working harder or you will be forced to stop trading and back on Jsa?

Or do you have to pay back some wtc?