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self employed, didn't declare period of unemployment, help please


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hi there, I wonder if anyone can give us an idea of what to expect when we renew our tax credits...


From April to August last year, my partner was working 40 hours a week as a self employed subcontractor. Then the company he was working for folded, but rather than sign on and claim JSA as we were sure we could weather the financial storm without doing so, he continued to look for work and we lived off our small savings (and sold pretty much everything we owned). Our second baby was born in November, so having him at home was a godsend really as I was pretty ill, all in all he was not working for around 5 months. By the beginning of Februuary thanks to the generosity of friends and family we had managed to find him enough tools etc. to set up on his own as a gardener. So he informed HMRC that he was now a sole trader, and at the time I rang tax credits who said that that in itself made no difference as he was already registered self employed. Things are really positive now, he is working 6, sometimes 7 days a week and we are financially back on track. However, now that we have got last year's accounts back from the accountant and it's time to renew our tax credits claim, I realise that the details they have for last year won't be correct, (he DID work 40 hours a week when he was working, but obviously that doesn't apply to the 5 months off). I feel stupid that we didn't tell them about the 5 month period where he was looking for work but not signed on. We continued to receive tax credits for that period, which I assume is fraud as now I've looked into it we should have told them within four weeks if he wasn't working? Being newly self employed last year, we just didn't think as I assumed our award would just be based on income (overall, he still made a profit of £4237 for the year)

Will they just ask us to pay it back from future awards? Or will they cut off our award altogether for not disclosing all of the relevant information? I'm making myself sick with worry as this was a genuine oversight as we had so much on our plate. Any advice gratefully received.

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I'm not sure if you're right regarding having to tell them he was not working as he was still registered as self employed.

As a sole trader I can sometimes be "not working" for weeks at a time but the tax credit people are only interested in how much I've earned for the whole year.

As long as you declare your earnings for the year I don't see a problem.

Others will advise if I am missing something here.



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Thanks for the reply. :)

It's just so confusing, under our "personal circumstances" section, it says total hours worked in a week "40", true as I've mentioned for the time periods when he actually was working, I know that the number of hours you work affects your claim as it can't fall below 30 (as a joint claim for a couple with children) but just can't seem to work out how that affects the self employed (whilst going through the notes that apply to changes in personal circumstances, it does state that you need to inform them if your usual working hours change, you stop working or are laid off). This from the HMRC website:

If you're now working fewer hours


If your hours have gone down temporarily, you can normally carry on getting your usual tax credits payments for four weeks. This is from the date your hours dropped. This can happen as long as you expect your hours to go back to normal after four weeks.

If your hours have gone down until further notice or for good, you may carry on getting the same tax credits payments for four weeks. This is from the date your hours go down. This can happen as long as you continue to meet the other qualifying conditions for Working Tax Credit.

After the four weeks is up, your tax credits may:


  • stop if you no longer qualify
  • go down if you still qualify for some payments

What you need to do


You must tell the Tax Credit Office within one month if your hours of paid work fall below the minimum for your circumstances. To find out the minimum working hours, see 'Number of usual working hours' at the top of this page.

You also need to get in touch within one month if either of the following happens:


  • you or your partner were working at least 30 hours a week, and your hours have dropped to less than 30 hours a week
  • you're in a couple with children, and your joint working hours drop to less than 30 a week



See, a few weeks in between jobs as a self employed person I'd expect them to understand, but 5 months might raise a few eyebrows...

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