Compliance telephone interview

croboy

Hi, i had a letter in the post stating I was to have one of the above. I rang to ask why and they said they had information i could be working. I am in ESA support group which is not means tested (and i'm not working in any form by the way).

My wife purchased a rental property last year instead of a pension and for tax purposes it is in my name. I had to complete a self-assessment tax return for the rental income and i'm wondering if this could have triggered this interview as to HMRC I may look like im self-employed maybe?

Im not very worried as i havent been working and im not self-employed (i've read up that receiving rental income does not classify you as self-employed) but anxious none the less. Anyone confirm that this is the situation and HMRC could trigger a compliance interview?

calcotti

I think information on HMRC system can indeed trigger a DWP check (reasonably so). It doesn't mean that you've done anything wrong or even that they think you've done something wrong (despite the way letters are worded). however they do need to carry out checks to ensure that benefits are being claimed correctly.

Secretsusie

Whether you are on income based or conts based esa having any income in your name will mean that income is deducted from your esa. One alight exception on conts based esa private pensions are deducted at 50% of anything over £85.

calcotti

Secretsusie wrote: »

Whether you are on income based or conts based esa having any income in your name will mean that income is deducted from your esa. One alight exception on conts based esa private pensions are deducted at 50% of anything over £85.

That is not correct. Someone on contribution based ESA only would not have any deductions from their ESA for other income with the exception of the pension rule over £85 as you mentioned.

tacpot12

As far as HMRC are concerned, residential property rental is not trading, but is running a business. A person running a residential property business on their own account is not regarded as self employed, nor required to pay class 2/4 National Insurance contributions. They are allow to deduce business expenses from business income in calculating their tax liability - they are liable for income tax on the profit from the business.

You might have a problem if you are claiming income-based ESA (which is means tested), as you are only allowed to have £16,000 of capital and if you own a property (which you do) you will have more than this, so should not be claiming income-based ESA. If you are claiming new style ESA, there is no capital limit, so you are ok.