Tax Credits Confusion

Icequeen99

What a shambles by HMRC.

Darksparkle is right - this doesn't sound like notional income case just more than they are either not accepting he works X hours or they are trying to apply a NMW rule that doesn't exist in legislation.

You should definitely appeal.

IQ

Confused277

The company made a loss this year, there is no way we could take out extra to pay more even if we wanted to. That doesn't seem to be their point. They are claiming that because he doesn't pay himself nmw as an employee we are entitled to nothing. No wtc and no ctc. Despite my 2 children being disabled (so I would have thought we would get something.
I'm getting no where with them, so I will probably have to appeal. They are also,saying any money we may be able to claim will only be backdated 4 weeks, despite how long this is taking to sort out!

Icequeen99

Confused277 wrote: »

The company made a loss this year, there is no way we could take out extra to pay more even if we wanted to. That doesn't seem to be their point. They are claiming that because he doesn't pay himself nmw as an employee we are entitled to nothing. No wtc and no ctc. Despite my 2 children being disabled (so I would have thought we would get something.
I'm getting no where with them, so I will probably have to appeal. They are also,saying any money we may be able to claim will only be backdated 4 weeks, despite how long this is taking to sort out!

All completely wrong. Firstly you don't need to work to get Child Tax Credit. Secondly, the claim runs from when they received your form. It can only be backdated for a month from that date.

Can you confirm you have submitted a claim form? Are you able to tell us exactly the wording of the letter you have received back?

IQ

Confused277

UKSBD wrote: »

There is a difference between doing work and being a worker.

Simple solution is to have a written contract of employment stating he is expected to work 30 hours a week at £7.20 an hour.

Additional hours worked can be classed as his duties as an office holder where NMW does not apply.

ie. if he spends half a day on paperwork, accounts, business duties, etc. this is being done under his duties as an Office Holder (Director).

If you are married or a civil partner you can transfer £1100 of your tax allowance to him which means all of the approx £11,500 is tax free.

If the company can't afford to pay the £11,500 just put it in his Directors Loan account which he can have out at a later date tax free.

You may not be entitled to as much Tax Credit (about £1200 less if he earns £11,500 instead of £8500) but his company saves about £600 in corporation tax, and as long he isn't deliberately depriving himself of money he could have drawn from the company you can feel comfortable that you are doing nothing wrong.

Darksparkle wrote: »

Where did the OP say they they were depriving themselves of income?

He took a salary of £8035 which he has declared to tax credits. That was the profit they made so he can't take more.

The £5,000 mentioned is reimbursed expenses which are non taxable and confirmed as such by the accountant. The £342 he didn't take would make no difference to the claim.

The company also has now made a loss so they can't magic up more money to pay the director and they don't need to as the director does not need to pay himself NMW.

We are still waiting the on the letter, which could apparently take 14 days to arrive. I spoke with a manager and was told no nmw means no tax credits. And no point in appealing as the rules are different with regards to tax law and employment law (was arguing that a director is not paid nmw or at least doesn't have to be)
As soon as I receive the letter I will post it up.

Icequeen99

Confused277 wrote: »

We are still waiting the on the letter, which could apparently take 14 days to arrive. I spoke with a manager and was told no nmw means no tax credits. And no point in appealing as the rules are different with regards to tax law and employment law (was arguing that a director is not paid nmw or at least doesn't have to be)
As soon as I receive the letter I will post it up.

Well he is right that tax law and employment law are not the same thing. But there is nothing in the Tax Credit Act or Tax Credit regulations that says directors have to be paid NMW.

Wait for the letter and then you can appeal.

IQ