Self Employed and Claiming Working Tax Credits

Discussion in 'Accounts & Finance' started by Voddiemonster, Jul 10, 2007.

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  1. cumfy

    cumfy UKBF Newcomer Free Member

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    How do 30hr and disability elements work in combination ?

    Can one claim for both ?
    Or is 16 hrs the "limit" for disabled applicants ?

    Posted: Jul 11, 2010 By: cumfy Member since: Jul 10, 2010
  2. thecyclingartist

    thecyclingartist UKBF Newcomer Free Member

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    to SRRooms: you should be able to claim CTC for your children as their father. Also tax credits are not based on nationality, but residency and tax status. (ie. the person being a UK resident and tax payer or potential tax payer) I'm a permanent resident only (US citizen) and have claimed WTC no problem, because I'm a UK tax payer and UK business.

    You're best calling the HMRC to enquire about the CTC and WTC separately.

    Posted: Jul 11, 2010 By: thecyclingartist Member since: Mar 25, 2010
  3. Homshaw

    Homshaw UKBF Enthusiast Free Member

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    Firstly there are pre-conditions to decide whether you qualify at all for WTC. In total an individual or a couple must work 30 hrs with one of them working 16. A single mum must work 16. I believe the same is true of registered disabled.

    If you qualify you add up the different elements one of which is a disabled element another is the 30 hours element.

    You then work out your income and for every pound it exceeds a threshold your allowance is reduced by 39p to arrive at the amount payable
    Posted: Jul 11, 2010 By: Homshaw Member since: Apr 18, 2008
  4. noliver48

    noliver48 UKBF Newcomer Free Member

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    thanks paul.
    Posted: Jan 4, 2011 By: noliver48 Member since: Jan 4, 2011
  5. mickelly

    mickelly UKBF Newcomer Free Member

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    i submitted 2 years income tax returns ,i have had my tax credit stopped and the tax credit people have asked me for a repayment.It was my fault that the returns were late due to family problems and I had been receiving tax credits for 4 years prior to them being stopped.Now that my returns are finally in and I have paid s ome income tax my entitlement to tax credit should be restored soon.Will I still have to make the repayment or will the tax credit department re calculate accrdingly.
    Posted: Feb 4, 2011 By: mickelly Member since: Feb 4, 2011
  6. Scalloway

    Scalloway UKBF Legend Free Member

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    What has happened to me is that the overpayment was deducted from payments due.
    Posted: Feb 4, 2011 By: Scalloway Member since: Jun 6, 2010
  7. mickelly

    mickelly UKBF Newcomer Free Member

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    Posted: Feb 4, 2011 By: mickelly Member since: Feb 4, 2011
  8. clare200

    clare200 Guest

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    thats not true u will get housing benefit , go to
    Posted: Feb 28, 2011 By: clare200 Member since: Feb 28, 2011
  9. loneparent

    loneparent Guest

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    Can anyone advise me please as when I phone Jobcentre they relay information without really listening to my query!

    I am a lone parent with two children age 4 and 6, my Income support stops soon for my youngest as he reaches school age.

    I have been told I can claim Working tax credit if I work 16 hours a week, can I claim if I am self employed working from home and how do I prove to them I am self employed and working this amount of hours?

    As I am returning to work after looking after my children I am very vague in the area of Working Tax Credits..................please help!
    Posted: Mar 15, 2011 By: loneparent Member since: Mar 15, 2011
  10. DeanCo

    DeanCo UKBF Newcomer Free Member

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    Posted: Mar 15, 2011 By: DeanCo Member since: Feb 19, 2011
  11. Homshaw

    Homshaw UKBF Enthusiast Free Member

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    If you are self employed you need to register as such with HMRC. Contact the newly self employed helpline

    With two children tax credits could be worth up to 9K to you (more if you pay for child care) depending on how much you earn - more if you work over 30 hours

    This would reduce by 39p for every pound you earn over 6400 pa

    The nature of self employment is such that it is difficult to check on hours. You need to do marketing, accounts which don't always result in an increase in turnover in the early stages of a business. I think HMRC accept this.

    As long as you are honest and can justify what you have claimed for you should have few problems

    WTC for self employed people and the timing of capital expenditure can be important so you need to read up on it or get an accountant that understands it

    Tax and NI for the self employed are 28% (29 from April) but tax credit reduction is 39P for any increase in income. It is also possible to minimise tax yet because of the impact of tax credits be worse off overall
    Posted: Mar 16, 2011 By: Homshaw Member since: Apr 18, 2008
  12. victoria777

    victoria777 UKBF Newcomer Free Member

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    Thankyou both for your advise, very helpfull :)
    Posted: Mar 16, 2011 By: victoria777 Member since: Mar 15, 2011
  13. Trying

    Trying UKBF Newcomer Free Member

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    Hi I'm having a benefits self employed issue too. Husband got made redundant 6 weeks ago and we have 3 children.
    Only today they tell me I must do my accounts before they will change our tax credits and housing benefit need them too. We only get £250...that's to feed 5 of us, bills...etc So it's really urgent I show them I'm earning nothing. I work about 50 hours a week probably more, it feels like every waking hour, but I made -£800 last year.
    But as I wasn't expecting to do proper accounts yet in such a rush, my expenses and income I get but the rest of it I'm confused about. Is a camera fixed or tangible for example? Is there a good guide out there? When I book a wedding I take a deposit, rest payable later. This makes them a debtor then?
    Posted: Apr 15, 2011 By: Trying Member since: Apr 15, 2011
  14. Scalloway

    Scalloway UKBF Legend Free Member

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    Fixed assets and tangible assets are much the same thing. Goodwill is an example of an intangible asset.

    Cash received as a deposit is a current liability, if you will have to repay it if you cannot fulfil your engagement.
    Posted: Apr 18, 2011 By: Scalloway Member since: Jun 6, 2010
  15. DeanCo

    DeanCo UKBF Newcomer Free Member

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    I think a simple profit/loss account should suffice. There is a good basic guide here: Set up a simple profit and loss account for your business
    Posted: Apr 18, 2011 By: DeanCo Member since: Feb 19, 2011
  16. Trying

    Trying UKBF Newcomer Free Member

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    Brilliant thank you so much!
    Posted: Apr 18, 2011 By: Trying Member since: Apr 15, 2011
  17. lostsoul23

    lostsoul23 UKBF Newcomer Free Member

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    I am probably doing this wrong this is my first post but i notice most on this thread have similar issues
    I am finding it hard to find a job to work around my 3 kids my partner works fulltime and we get wtc and ctc, partner brings in around 15900, I am thinking about becoming self employed as an artist, to work from home. my youngest has just started school and has a medical condition that has ment that he has had to have more time off than i had expected( we dont get benifits for him).
    i dont think that an employer would tolerate me nipping to pick him up all the time so it looks as if i might have to fall back on art/ photography work. I just don't know how to start. I have been on the HMRC tax intro thing and read lots of bits, but it doesn't seem to be relevent for art based work.
    i have tried to ring but have had conflicting advise. One said i had to declare that i was self employed from my first sale....... and one said that i had to declare from the moment i started to prepare work for sale.
    Because of this i have delayed doing anything as i was also told it was better to hang fire untill after aprill!
    So now i have stumbled upon you guys and would be grateful of any advice regarding : How many hours i should put down I could easily clear over 30 but this could be reduced if i need to be part time.
    : What if i sell nothing! i hope to sell at markets/ gallerys you know the drill but like i said have held off making as i was advised against it. do i estimte my earnings to be nill and bank any money earned seperatly to pay back any over payment?
    : Should i employ an accountant. some say yes as they save you more than they cost?
    : what is a cottage industry........ this is a odd question because its probably irrelavent but there is loads of folk that make things and sell them at markets and sales and art clubs are they all self employed? I just dont get it. could i really get in loads of trouble if i had a local exhibition and sold work or does this fall into some kind of hobbie catagory like if you make a model train and sell it on ebay ( hope that makes sense)

    thank you in advance :)
    Posted: Apr 21, 2011 By: lostsoul23 Member since: Apr 20, 2011
  18. Trying

    Trying UKBF Newcomer Free Member

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    Ah yes the reason I am self employed now (usually photographers are part time with a full time job to help fund the business until they can go full time) is because one of my boys is autistic. The kind of childcare he needs means I'd have to find a job earning enough to pay a specialist nanny or school hours only (although now husband is out of work it isn't an issue but he can earn more than me in the workplace so it makes sense for me to stay as I am while he looks for a new job). So not likely! The whole how many hours do I say I work stumped me for a while because it's pretty much if I'm awake I'm working. I wasn't sure if this would be detrimental in anyway. I guess I will find out soon when they let me know what tax credits we will get.
    Good luck!
    Last edited: Apr 21, 2011
    Posted: Apr 21, 2011 By: Trying Member since: Apr 15, 2011
  19. tree568

    tree568 UKBF Newcomer Free Member

    102 17
    A few things to keep in mind moving from income support or jsa to self employment:

    If you ahve been out of work for more than a year, when you become self employed you may qualify for a payment of £40 a week for a year (exact amounts may have changed). This is paid via DWP, not HMRC. So it's a good idea to talk this over with the job centre people.

    You cease to qualify for DWP benefits like income support and JSA from the day you register as self employed with the HMRC. So you need to make sure you apply for working tax credit with ther HMRC on the date you register.

    There can be a delay in receiving funds when you switch over from DWP administered benefits to HMRC administered tax credits. So you need to have enough savings to tide you over, preferably for around 12 weeks. The WTC will be backdated but when you are trying to run a business cash flow, in the early days, is, if not quite equal to profits, at least profit's queen.

    You still can qualify for housing benefits if you are receiving working tax credits. But again, as soon as the DWP money stops, so does the housing benefit. Yes, it can be backdated to when you become self employed but you do need to tell them straight away about your change in circumstances. Don't leave this - it can get really messy if you do. So usually what happens is DWP will inform them electronically that you are no longer their client. At that point all housing benefit and council tax benefit stops. You tell them you are self employed as of that date. Once you get an award notice from the HMRC, you take this into the council - it will state the effective start date plus whatever you have estimated your income at for the year - and they will restart your housing and council tax benefit from the date you become self employed.

    Something to keep in mind if you are already receiving housing benefit at the 50th percentile level. New applicants only get it at the 30th percentile level. If you pay rent to a private landlord and your rent is within that level anyway, then this doesn't matter. But if you have rent of, say, £200 a week, and the 50% percentile is £210 a week, so your rent is covered in full, but the 30th percentile is only, say, £160 a week, then, when you move from income support or jsa to self employment and WTC, this may qualify as a change of circumstance for the purposes of assessing housing benefit. So you could end up, all of a sudden, with running a new business and having to find an extra £40 a week for your rent that you hadn't counted on having to find.

    Whereas, if just for the next few months you stay as you are, that reduction in local housing allowance from the 50th to the 30th percentile, won't affect you until around October this year.
    Posted: Apr 21, 2011 By: tree568 Member since: Jan 25, 2011
  20. lostsoul23

    lostsoul23 UKBF Newcomer Free Member

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    you will have to let me know how you get on :)
    I have one with ASD as well, it seems we have a couple things in common. there is a high volume of appointments!
    does it make much difference if you put part time or full time? if my partner all ready works full time anyway as it is based on our joint hours ? am i best to work part time?

    I don't Know! I just what to not get it wrong on the form! :)
    Posted: Apr 21, 2011 By: lostsoul23 Member since: Apr 20, 2011
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