HMRC Tax Credits self employed - being assessed

[Beautybecca27]

Thankyou so much for sharing this information, I have been following this with interest as I am single parent soon to be starting a business therefore the family income is all down to me. Do you mind if I just ask, was the earning of minimum wage calculated from your total income or was it expected even after you had taken off expenses?
And also, do you have to pay back the tax credits you have recieved during your first year? (If that's not too personal a question.)

I am very worried that I will work hard at getting a business off the ground only to be told after a year it isn't good enough and be landed with a huge lump of debt to tax credits. I cannot for the life of me understand why they are punishing hard working people who choose to go self employed!

I completely agree! It shouldnt be this way!

I was going to keep my current job and work round it until the business built up...

Does anyone know if because I also earn over minimum wage in an employed job - this silly rule of removing peoples child tax would apply? - if that even makes sense! I know what I mean LOL.

Xxxxxx

 

[Cindy2021]

I completely agree! It shouldnt be this way!

I was going to keep my current job and work round it until the business built up...

Does anyone know if because I also earn over minimum wage in an employed job - this silly rule of removing peoples child tax would apply? - if that even makes sense! I know what I mean LOL.

Xxxxxx

It's not child tax credits, it's working tax credits. And it was because I don't earn the min wage not because I earn over it X

 

[Beautybecca27]

Ohh i see .. I must read properly before I answer!!!

The system is backwards!!!! What a joke!!! [emoji107][emoji107][emoji107][emoji107]

 

[surf girl]

My working tax credits have been stopped. I haven't been notified just noticed the change in amount being paid.

Main reasons were I didn't make enough profit (min wage) after qualifying and setting up in my first year. They understood I'd bought products, equipment, advertising and done further training but the lack of profit and the fact I hadn't paid cash payments into a business account were the issues.

I hope this info helps anyone else setting up X

Huston I'm going to have a problem! I think in the 2.5 years I've been open I've put cash into the bank about 4 times I spend the cash and leave my bank alone, also my 1'st year trading was a £1200 loss I still haven't had my orders to send info in yet, it's so stupid how they stop money from people who earned less than nmw but people who did earn it they give it too, it's the people that diddnt reach nmw that need it?? Do they expect you to live on buttons? Insane...

 

[Cindy2021]

Huston I'm going to have a problem! I think in the 2.5 years I've been open I've put cash into the bank about 4 times I spend the cash and leave my bank alone, also my 1'st year trading was a £1200 loss I still haven't had my orders to send info in yet, it's so stupid how they stop money from people who earned less than nmw but people who did earn it they give it too, it's the people that diddnt reach nmw that need it?? Do they expect you to live on buttons? Insane...

Just make sure you can prove you have clients and they pay you!
I live off the cash too and buy most stuff online from my personal account.
My bank has now closed lots of branches so
I'd have an hours round trip anyway.
I've read that from 2017 if you earn the minimum wage with the minimum hours then it's over the threshold to qualify for working tax credits so it's being stopped however I'm still waiting on confirmation of this.

 

[CocoAllure]

Just make sure you can prove you have clients and they pay you!
I live off the cash too and buy most stuff online from my personal account.
My bank has now closed lots of branches so
I'd have an hours round trip anyway.
I've read that from 2017 if you earn the minimum wage with the minimum hours then it's over the threshold to qualify for working tax credits so it's being stopped however I'm still waiting on confirmation of this.

Have u thought about having a card paying facility?

 

[Cindy2021]

Have u thought about having a card paying facility?

Yes I'm doing that just now. Ive had a few times where I've run out of change before the end of the day and that's not ok. Some of my clients pay be bank transfer so it would be ideal X

 

[CocoAllure]

Yes I'm doing that just now. Ive had a few times where I've run out of change before the end of the day and that's not ok. Some of my clients pay be bank transfer so it would be ideal X

Yea just thinking it may be easier for u if your bank is far out of your way. And it's w good way of keep track of it all

 

[Cindy2021]

Yea just thinking it may be easier for u if your bank is far out of your way. And it's w good way of keep track of it all

I registered and tried to buy online and you need photograph ID which I don't have as I've lost my driving licence so I'll do it when my replacement one arrives

 

[sunflowerfi]

I'm a single mum and I was hoping to make a go of running my business full time from August when my contract on my current job ends.
However I rely heavily on tax credits so hearing this is very bad news. Xxx

 

[CocoAllure]

I registered and tried to buy online and you need photograph ID which I don't have as I've lost my driving licence so I'll do it when my replacement one arrives

Do u think you've got an overpayment?

 

[Kelly.P]

I'm a single mum and I was hoping to make a go of running my business full time from August when my contract on my current job ends.
However I rely heavily on tax credits so hearing this is very bad news. Xxx

I'm in the same position, being a single mum means tax credits unfortunately. It's scary when it's all down to you isn't it.
I'm just wondering what's the worst that can happen? I assume that they would move people onto job seekers allowance if it the business wasn't acceptable to them after the first year.

It's got to be worth a try, but the pressure to make a profit at minimum wage level in the first year with the possibility of overpayment if I don't meet that figure, that's what worries me. Also, the wording in their guidance document that reads along the lines of 'every hour worked should be in expectation of payment', it just doesn't work that way!

Just realised that this is all negative thinking lol what if it doesn't work...I need to change my mindset to it will work! Xxx

 

[CocoAllure]

I had an overpayment of around £3k just for working tax credits and they took it out of my future child tax credits and it took a year of only getting peanuts it was awful for us such a stressful time

 

[BannerPenguin]

I'm in the same position, being a single mum means tax credits unfortunately. It's scary when it's all down to you isn't it.
I'm just wondering what's the worst that can happen? I assume that they would move people onto job seekers allowance if it the business wasn't acceptable to them after the first year.

It's got to be worth a try, but the pressure to make a profit at minimum wage level in the first year with the possibility of overpayment if I don't meet that figure, that's what worries me. Also, the wording in their guidance document that reads along the lines of 'every hour worked should be in expectation of payment', it just doesn't work that way!

Just realised that this is all negative thinking lol what if it doesn't work...I need to change my mindset to it will work! Xxx

They wouldn't' move you to job seekers because self employed people aren't entitled to JobSeekers as you aren't actively looking for another job.

 

[Kelly.P]

They wouldn't' move you to job seekers because self employed people aren't entitled to JobSeekers as you aren't actively looking for another job.

Ahh that's good to know, I'd assumed they would make you close the business and look for work. That makes me feel better

 

[sunflowerfi]

It's really scary. Tax credits make up half my income at the moment. I was really determined that I would be in a position to go full time self employed from August when my contract ends in my current job.
I earn less than £200 a week at the moment in my job so was hoping u could equal my earnings and receive equivalent tax credits.
What would I do when applying for tax credits? Estimate my earnings? Xxx

 

[CocoAllure]

I rely so much on my tax credits

 

[blonde8]

So basically am I right in thinking that unless u earn a certain amount from being self employed that u won't qualify for working tax! Does anyone know what this figure is?x

 

[blonde8]

Surely earning minimum wage you don't qualify for working tax anyway? I'm confused x

 

[Cindy2021]

Surely earning minimum wage you don't qualify for working tax anyway? I'm confused x

And therein lies the problem! I've asked them to confirm the qualifying thresholds in my complaint so hopefully I'll find out