Self-employed and Working Tax Credits

[Heyes]

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.

[Openlaw15]

Re: Self-employed and Working Tax Credits

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.

What specific terms did they use in their letter?

[Heyes]

Re: Self-employed and Working Tax Credits

What specific terms did they use in their letter?

Thanks.

'... not commercial and profitable... not regular and organised.'

[Openlaw15]

Re: Self-employed and Working Tax Credits

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.

You can make an Appeal to a tribunal possibly if the reconsiderations are not helpful.

[Heyes]

Re: Self-employed and Working Tax Credits

You can make an Appeal to a tribunal possibly if the reconsiderations are not helpful.

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.

[Snoopy1948]

Re: Self-employed and Working Tax Credits

Hi there ...

I am aware that assessment of self employed earnings for welfare claims such as tax credits and housing benefit/council tax support has changed over the last two years as there was substantial evidence that self employed claimants were able to be 'creative' in their accounts and net profits and there is a trend towards accepting that no one would work on a self employed basis for less than the minimum wage and I believe they now use that even where income is shown to be lower.

In your case, the reflection of the new rulings show ( and I have taken this quote fro a revenue & benefits advice website ) that "For claims from 6 April 2015 onwards, claimants 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".

IT is extremely difficult to assess regular projected income from a start up business and HMRC are perfectly entitled to see longer term evidence of your earning potential and it seems that in this instance, they do not see the work as being done on commercial basis with a view to realising a profit and it must be organised and regular.

From what you are saying, you were relying somewhat on WTC being available as an immediate supplement to your earnings? And what exactly is the figure of $2500 for a week or two of trading? Is that a turnover or profit? And may I ask what type of trading you are undertaking here?


http://revenuebenefits.org.uk/tax-cr...self-employed/
Useful page for reference :

[Heyes]

Re: Self-employed and Working Tax Credits

From what you are saying, you were relying somewhat on WTC being available as an immediate supplement to your earnings? And what exactly is the figure of $2500 for a week or two of trading? Is that a turnover or profit? And may I ask what type of trading you are undertaking here?

No, not relying - but it'll be useful.
The amount is currently almost all profit, but that percentage could reduce depending on the amount of ongoing revenue relative to costs.
Business information through a membership-based website.

[wales01man]

Re: Self-employed and Working Tax Credits

If you are making 2500 nearly all profit in 2 weeks why do you need WTC?
Sounds like a good earning business going to tell us all what it is

[Heyes]

Re: Self-employed and Working Tax Credits

If you are making 2500 nearly all profit in 2 weeks why do you need WTC?
Sounds like a good earning business going to tell us all what it is

Your questions have already been answered.

[wales01man]

Re: Self-employed and Working Tax Credits

Think HMRC are correct here you are in a business that made2500 in a couple of weeks what you need to do is prove that you earn below the amount that stops you claiming WTC maybe a few more months trading will satisfy them.

[Snoopy1948]

Re: Self-employed and Working Tax Credits

Think HMRC are correct here you are in a business that made2500 in a couple of weeks what you need to do is prove that you earn below the amount that stops you claiming WTC maybe a few more months trading will satisfy them.

I agree with this. Trading experience, going forward, will dictate your income but currently, and on initial indications, you appear to be some three times over minimum income to allow a tax credit to be applicable. I cannot see HMRC being irresponsible in any way here.