Clarity on Working Tax Credit claiming ability...

duff67

Sine my employer of 30 years, ended my job, I have been trying to find work and on JSA. This was 2 years ago.

Despondent at the lack of application replies, follow up call 'excuses', and an overwhelming desire not to be claiming benefit - I joined on a course at the local University which will help me start up a small business (if no one will employ me, then I'll employ myself attitude).

I need to provide a CashFlow forecast which will indicate income in the first year. My JSA will stop so I am hopefully WTC will assist whilst I build regular income.

Calls to the WTC helpline, online reading & a 'chat' conversation have not clarified whether I will receive WTC and only add fear that I need to be a/employed before I apply (hence my JSA will stop, & then it may not be sanctioned. (Thus not replacing the loss of JSA).

When I have explained above, I have been asked what my first years income will be? I have told them that it'll only be a best 'guesstimate' and most business start ups will loose money in the first couple of years due to developing books and start up costs.

Immediately told that no WTC would be sanctioned if loss made. When I have spoken again another time, suggesting a profit in first year leads the helpline to give me a computer generated figure (which I can get online), but any further clarity is 'knowledge denied' by the operator.

Has anyone knowledge, or been in same start up position and can confirm the possibility of acceptance is there?

Aged 50
Single
Children all adults.
Current Income: JSA & Housing Rent contribution.
Used to 40 hour working week so see no reason why my hours invested in a start up would not be same or greater.

I understand I need to apply as specific to me, but I need to jump, but cannot loose JSA for nothing income wise.

Thanks

Darksparkle

Once you are working over 30hrs per week (assuming not disabled) then you can claim WTC.

The HMRC compliance manual states that any hours which will be costed to the client/customer as spent in producing/providing the individual order or service count when working out hours for self-employment. In addition, the following activities also count:

- trips to wholesalers and retailers
- visits to potential clients for giving quotes etc
- time spent on advertising or canvassing business
- cleaning the business premises or space used specifically for business purposes
- cleaning a vehicle used as part of the business, for example a taxi
- travelling for the purposes of the business, but not from home to their business premises
- book keeping
- research work, for example where the claimant is an established author.

Research carried out be persons who are not established authors, but are working in the hope of one day becoming established will not count.

To claim WTC you must be either employed or self-employed. For tax credit purposes, HMRC define self-employed as meaning the self-employed activity is done on a commercial basis with a view to realising a profit and it must be organised and regular.

If your income doesn't meet hours x NMW then you may be asked to show your business records.

How much tax credits you get will depend on your taxable income for the previous and current tax years.

duff67

Darksparkle wrote: »

Once you are working over 30hrs per week (assuming not disabled) then you can claim WTC.

The HMRC compliance manual states that any hours which will be costed to the client/customer as spent in producing/providing the individual order or service count when working out hours for self-employment. In addition, the following activities also count:

- trips to wholesalers and retailers
- visits to potential clients for giving quotes etc
- time spent on advertising or canvassing business
- cleaning the business premises or space used specifically for business purposes
- cleaning a vehicle used as part of the business, for example a taxi
- travelling for the purposes of the business, but not from home to their business premises
- book keeping
- research work, for example where the claimant is an established author.

Research carried out be persons who are not established authors, but are working in the hope of one day becoming established will not count.

To claim WTC you must be either employed or self-employed. For tax credit purposes, HMRC define self-employed as meaning the self-employed activity is done on a commercial basis with a view to realising a profit and it must be organised and regular.

If your income doesn't meet hours x NMW then you may be asked to show your business records.

How much tax credits you get will depend on your taxable income for the previous and current tax years.

Thank you Darksparkle.

All above seems reasonable to expect. So from the above, should my start up business be forecasting a loss in year one due to starting up as mentioned in my original post, then I would still qualify for WTC as long as more than 30 hours can be shown, if demanded, re above criteria.

My calls to helpline seem to indicate - profit is required , &ha reasonable amount of first year profit at that !

Darksparkle

If you don't meet the hours x NMW and they investigate it will be for you to prove that the business meets the criteria. Only the facts and evidence will determine if you are truly entitled.

dktreesea

I thought if you told the DWP you were starting up a small business, you got JSA for another year without any obligations on your part other than to build your business?

duff67

dktreesea wrote: »

I thought if you told the DWP you were starting up a small business, you got JSA for another year without any obligations on your part other than to build your business?

Dktreesea - unfortunately not.

Once informed and if the JobCentre accept a Business Plan, you can apply for Enterprise Allowance which lasts for 12 weeks ( 6 weeks at £66 and another six weeks at approximately half that). Then it stops.

The JSA is stopped immediately on informing.

This is why WTC is crucial for me ATM

Darksparkle

I thought it was £66 per week for 13 weeks and £33 per week for 13 weeks?

WTC max would be £53 per week.

NYM

Could you apply for a Business Start Up loan ?

Gov.UK

duff67

Darksparkle wrote: »

I thought it was £66 per week for 13 weeks and £33 per week for 13 weeks?

WTC max would be £53 per week.

We're quoting the same figures but I thought it was over a total of 12/13 weeks rather than 12 at each element.

I will ask again Wednesday at the JobCentre. Would be better over 26 weeks

duff67

NYM wrote: »

Could you apply for a Business Start Up loan ?

Gov.UK

NYM - thank you.

I've been speaking to JobCentre and advisers regularly and always mentioned loans won't be an option in view of credit scoring, having had no regular income over the last years.

No one has mentioned the link you provided, which seems to be geared to JSA current claimants so therefore it should be expected that credit scores fail.

I will seriously look at it as an option as, if granted, it will help first year costs and therefore more likely be in a positive end of first year position.

NYM

duff67 wrote: »

NYM - thank you.

I've been speaking to JobCentre and advisers regularly and always mentioned loans won't be an option in view of credit scoring, having had no regular income over the last years.

No one has mentioned the link you provided, which seems to be geared to JSA current claimants so therefore it should be expected that credit scores fail.

I will seriously look at it as an option as, if granted, it will help first year costs and therefore more likely be in a positive end of first year position.

I hope you're successful in your new venture!