Tax credits stopped: "Info does not show trade/profession/vocation regular/organised?

mongoose11

Hi there,

As regular readers/contributors here will know this is my 3rd post re my working TC's and this last one I guess is the most important and it's my first and last chance of appeal.

Firstly, many thanks to those who commented on my earlier 2 threads, your feedback was/is much appreciated.

So basically, long story short the info I sent in re the "Tax Credit Checks" was concluded that I was no longer entitled to working tax credits.

The 2 reasons are as follow:

The information you have given me does not show:

# Mr xxxx xxxxx trade, profession or vocation is regular and organised

# Mr xxxx xxxxx trade, profession or vocation is commercial.

I'm struggling to understand why this is the case, so I should explain what I do and the info I sent in.

I returned May 2015 from having lived abroad last 10 years teaching English.

I currently teach S Korean students online, roughly 6/7/8 hrs day.

The info I sent in included 3 months as requested of my working hrs with my students including time/date/hrs completed/absentees/additional info and money earned that had all previously been diarized on an excel spreedsheet.

I get paid through Paypal each month so I sent in Paypal payment transaction ID receipts from my South Korean colleague who goes through my hours on Skype at the end of each month - he logs into my skype account, that way he can verify my exact time with the students - and issues payment around the 15th of following month.

Regarding commercial costs, I don't really have any as I work from home, online, all my material is digital - all books/student progress reports etc are digital. I only use a little stationary to keep physical notes, that is it.

I have no commercial costs like travel expenses.

All communication is conducted through skype so it makes it very straightforward, we don't exchange emails or we hadn't during that period wit my S Korean colleague - personal email with students is not allowed and is not something a teacher would do as it often leads to additional time and expense.

My South Korean colleague was someone who I worked with abroad who then went on to set up an online English teaching school of which the domain I gave reference to it in my TC check info and prior to returning to the UK he set me up with some future classes with some of his students.

I have no other solid info to pass on.

I currently earn $10 hr which puts me on £500 to £600 month which I believe entitles me to working tax credits.

**************************************************************************

If anyone could kindly advise as to how best to answer:

The information you have given me does not show:

# Mr xxxx xxxxx trade, profession or vocation is regular and organised

# Mr xxxx xxxxx trade, profession or vocation is commercial.

I would be most grateful.

missbiggles1

If that's US dollars you're being paid in that's about £7ph, which is ridiculously low for language teaching.

mongoose11

Yes correct - it is low.

Darksparkle

Are you registered self employed?

What actions are you taking to increase your business/income?

You mention your daily hours, what are your weekly hours as that is what TC ask?

As mentioned, is that US dollars? I don't know South Korean currency but don't think they use dollars?

So if US dollars, $10 is around £7.15 ph.

If you are working the required 30hrs for WTC (I've had to assume no disabilities/children/under 60 as none mentioned) then your earnings should be closer to £930 per month? Why only £500/£600?

It could also sound like you are actually employed by this Sourh Korean person rather than employed and running your own business.

densol_2

I agree with DS - it does sound like you are an employee and not running a self employed business. You should at the very least be issuing an invoice for the work you have done and bill accordingly. How do you promote the business and try and gain new work or is that all through the contact as well ?

mongoose11

Darksparkle wrote: »

Are you registered self employed?

What actions are you taking to increase your business/income?

You mention your daily hours, what are your weekly hours as that is what TC ask?

As mentioned, is that US dollars? I don't know South Korean currency but don't think they use dollars?

So if US dollars, $10 is around £7.15 ph.

If you are working the required 30hrs for WTC (I've had to assume no disabilities/children/under 60 as none mentioned) then your earnings should be closer to £930 per month? Why only £500/£600?

It could also sound like you are actually employed by this Sourh Korean person rather than employed and running your own business.

Hi there,

Thanks for your reply.

Yes, it is a bit of a strange set up.

Yes I registered as self employed when I returned in 2015 as was requested to by Korean pal. I give him the no' of hours at end of month and he goes into check on behalf of students on my skype account as he can see the time spent online. Some are under 18 so they/families deal with him and I get paypal payment from him middle of mth.

My weekly hours each week for actual teaching are roughly 25 to 30 but I spend an additional 2 hours a day for marking and preparing the following days class for which I'm not remunerated.

Bum deal I know but part of the job.

They use won in S Korea but for the purpose of teaching fees for foreign teachers it's $10 US/hr for online classes.

Unfortunately there are often cancellations (as there were for all 3 mths requested by HMRC) for online classes plus the first month there were some canx for holiday.

So Aug was only $740.
Sept $757
Oct $774

If your thinking why don't I get out this game and teach in the UK for much more well I don't have a PGCE or I didn't do a specific degree in teaching but I do have a degree and TEFL plus no' of years experience and I do enjoy it. I also moved back to help out and spend time with folks as their getting on quite a bit but not disabled or anything.

Yes - no kids, under 60, no other benefits/disabilities.

mongoose11

I should add on the paypal transaction ID receipt it states something like these are for the teaching hours of August 2015, which I included in the original credit check info.

Darksparkle

Again, based on what you've said I think this does sound more like employment rather than self employment. It doesn't sound like you are actually running a business.

It's not clear cut whether someone is self employed or employed, it's based on the specific terms of the engagement.

But if self employed it would be expected that you set your own work times, how the work is carried out etc, have the right to send a substitute, you are responsible for the business success/failure, you have a financial risk.

Try HMRC's employment status indicator for their opinion of employed or self employed.

Does the letter say nothing else on how they reached their decision?

How many hours did you work August, September & October?

Your averaging $757 so around £544 per month. On NMW that's only around 18hrs per week. Or if declaring 30hrs per week, only earning £4.18 per hour.

Mersey_2

mongoose11 - As you may have read on these threads and the rightsnet forums, HMRC have sent a lot of these letters out since December 2015.


It appears to be an extension of an initiative to 'test' WTC claims. ie many are receiving 'examination' letters before payments even 'go live.'


I assume you were sent your Appeal rights in writing, separately?


Mandatory reconsideration is what you need to request in writing.


You can then Appeal this decision.


Acceptable 'evidence' usually means Facebook and other adverts and postings, names and contact details/addresses of customers and any bookkeeping/accounts' records you keep.


It appears that 'regular and organised' means you need to provide evidence of hours worked in more detail. This can include research, record keeping, advertising, meeting prospective new customers and so on.


At least HMRC didn't say your business wasn't a 'trade or profession' or doesn't show it's 'carried out with a view to profit' as they appear to be the two sent out to most WTC claimants. So you've half-qualified; but, need to send in more detailed information.

missbiggles1

mongoose11 wrote: »

Yes correct - it is low.

It may be that they think that because you're charging less than 50% of the commercial rate that you aren't running a commercial business.

mongoose11

Hi all,

Thanks so much again for all your swift replies.

The reason for my understanding that I should have gone through the route of registering myself as self employed in order to see if I was entitled to tax credits was/is that after I have sent my hrs across to S Korean colleague, I'm not taxed anything his end, the hrs are just calculated and then $10 is exchanged to £ and paid to my paypal acc.

Attached is the 2 page letter I received with names edited out.

In terms of finding new clients/students, it's mainly through my colleague out there although some have been friends of students I've previously taught online or in class when I was abroad. It's a bit of a mix match based on word of mouth.

In truth obviously this type of wage - even adding a couple more students a week - isn't going to cut it living in this country so in terms of how I am trying to build business I am myself currently in the research of setting up an online teaching school here in the UK, but some months off.

I will check out "Try HMRC's employment status indicator for their opinion of employed or self employed." now - many thanks.