Self-employed and Working Tax Credits

Hheyes

Does anybody have useful experience and/or suggestions regarding claiming WTC when self-employed?

With a recent start-up, my activity is deemed as 'not qualifying - not commercial or profitable'.

Long-story-short is that the claim was submitted in April whilst working on pre-launch activity.

After rejection, I requested a mandatory reconsideration, by the time of which I'd been trading a week-or-two and submitted evidence of about $2500 (dollars, because most of my activity is oriented toward the US and is received in my $ PayPal account).

I've now just received another refusal, advising that I didn't provide proof of activity for the pre-launch before I began receiving income.

Perhaps mistakenly, it seems to me that there's an element of whomever decides this either not being appropriately aware of s/emp activity, or deliberately ignoring it.

I'm tempted to just forget the whole thing, but income will be likely be unpredictable/irregular/low for some months and £55-or-so weekly will be very useful.

Alice_Walker

What does the $2,500 represent? What is your profit, and what kind of business is it?

Hheyes

Not wishing to be rude... I don't see how that's really relevant.

But I'm happy to answer anyway... the business provides business-oriented info through a paid-membership website. Of that $2.5k, after initial setup costs probably half of it is currently profit - but with ongoing costs that percentage may reduce depending on ongoing income.

Alice_Walker

Hheyes wrote: »

Not wishing to be rude... I don't see how that's really relevant.

But I'm happy to answer anyway... the business provides business-oriented info through a paid-membership website. Of that $2.5k, after initial setup costs probably half of it is currently profit - but with ongoing costs that percentage may reduce depending on ongoing income.

It's relevant because that's the kind of information HMRC will use to judge whether the business is viable. Have you provided them with a business plan, with protected earnings in the longer term?

Hheyes

They've had an outline strategy/operations guide... which is more honest (about money) and relevant (to what'll likely happen) than a standard business plan, and with appropriate financials which duly note the difficulty of accurate projections.

I'm not being difficult here, but I've done and taught this stuff for much of the past forty years - and hence am aware of just how inappropriate a BP can often be.

NYM

Hheyes wrote: »

They've had an outline strategy/operations guide... which is more honest (about money) and relevant (to what'll likely happen) than a standard business plan, and with appropriate financials which duly note the difficulty of accurate projections.

I'm not being difficult here, but I've done and taught this stuff for much of the past forty years - and hence am aware of just how inappropriate a BP can often be.

I don't think anyone is suggesting you are being difficult

HMRC have decided that your business isn't viable and you need to convince them otherwise so really you do need to provide whatever they ask of you.

Hheyes

They haven't asked for anything that hasn't been provided.

When initially asked 'What have you been doing?' I answered honestly with something like 'I spend my time building(tech and content) the site, and communicating with potential/actual clients, content providers and others.'

I haven't been asked for further detail.

FBaby

Could the issue be relating to hours worked? Ie, launching time, it would be reasonable to account most of your time building the site, advertising etc... but clearly questionable to still be claiming the same hours spent now that your business is supposed to be operational.

Darksparkle

If you don't agree with their decision then appeal it.

Hheyes

FBaby wrote: »

Could the issue be relating to hours worked? Ie, launching time, it would be reasonable to account most of your time building the site, advertising etc... but clearly questionable to still be claiming the same hours spent now that your business is supposed to be operational.

I haven't claimed the same hours for both periods - they haven't even asked me.
The reasonable-and-true backstory is that when I claimed, I was doing things (building) which advisories suggest count toward 'legit activity'. And now, a month-or-two later I'm also doing other things (operating) which advisories suggest count as 'legit activity'.

But I've not been asked about this... my initial claim (which contained 'I'm doing pre-launch work') was refused.

So I asked for the reconsideration and submitted an update ('now launched, here's 10 days income of $2.5k, and I still spend my time doing many of the same things - updating site tech/copy, contact with potential/actual clients and content providers and others). That too has been refused.

Hheyes

Darksparkle wrote: »

If you don't agree with their decision then appeal it.

Thanks.
Not being rude.. I'm aware of that and may do so.

My main reason for posting is to see if anyone else has has similar/relevant experience.