Advice for Non-Claimant

[PeterBW]

Hi,

 

I was hoping for a little advice on my situation concerning NI, Council Tax and so on. Cheers

 

After being unemployed and on JSA for two years and no luck finding work despite 50+ jobs applications a week, in January I decided to have a go at self employment. I signed off and as a craftsman started to make things selling on ebay and my own website. There were a few weeks with no sales but there has been a steady increase over the weeks. For the month of January I made about £20 a week net profit, February £40 and last month £60 this month I am projecting £70. It's still less then dole money but my business is getting recognised, I am building up repeat custom, have my first small regular contract and even made some stuff for a BBC TV show. So I have no business worries and my query is not about business.

 

The problem is with the above happening what my concern is, at the moment I am making less than JSA each week if I were claiming. Currently I am paying no tax, income, VAT or NI. To be honest with my profits I couldn't afford them, I most certainly cannot afford Council Tax unless I get an unemployed reduction, the person I am living with is unemployed and filled in the form as living alone, and also I cannot afford my due dental appointment unless I go as a claimant.

 

So what I wanted was advice on the best course of action for a person in my shoes.

 

A little unusual situation but hopefully someone can help.

[abc123def]

Is the person you are living with, your partner? If you are in a relationship they need to declare this and be open and honest about it.

 

What will happen then is your income will be assessed to decide what if any financial support you need. Given what you say it would be likely that you may receive some CTR at least. What is not an option is not to declare your relationship. Read the very many threads on here where such lies come back to bite you even years later.

[Mr.P]

The problem is with the above happening what my concern is, at the moment I am making less than JSA each week if I were claiming. Currently I am paying no tax, income, VAT or NI. To be honest with my profits I couldn't afford them, I most certainly cannot afford Council Tax unless I get an unemployed reduction, the person I am living with is unemployed and filled in the form as living alone, and also I cannot afford my due dental appointment unless I go as a claimant.

 

Dealing with the points you mention in order:

 

• Income Tax will be based on previous year's profit and HMRC expects it to be paid in good time. Failure to do so could incur penalty charges - As this is your first year of trading, HMRC should have alternative arrangements in place. With your profits being under the tax threshold anyway, you wouldn't be liable for paying tax (you could still incur penalty charges). Contact HMRC to discuss this as soon as possible.
  
• VAT - You are well under the £80,000 p/a threshold, so be thankful you don't have to deal with all the extra paperwork and accounting that goes with it.
  
• National Insurance contributions - All self employed people should be paying NI. If your profits are below £5,885 p/a you will be exempt from Class 2 contributions but HMRC must be informed so that they can grant the exemption.
  
• Council Tax - If you are earning less than £72.40 p/w (current rate), you should be able to claim full council tax relief. Depending on your local council, there may be a small amount to pay each week, but you won't be any worse off than a JSA claimant.
  
• Declaring living alone - You do realize that when the DWP and council find out, they will conduct a fraud investigation ? This could result in both the DWP and council demanding repayment of all benefits and possibly a conviction for your partner. If you have also been claiming benefits from this address as a single claimant, you could also find yourself going through the same process.
  
• Dental/prescription charges - The NHS run a low income scheme that provides help for NHS fees. See http://www.nhsbsa.nhs.uk/1125.aspx for more information.
  

[PeterBW]

Thanks for the advice, the person I am living with is not my partner, I am staying as a non-rent paying guest which I just read may make things different.

Edited April 7, 2014 by PeterBW

[Mr.P]

the person I am living with is not my partner, I am staying as a non-rent paying guest which I just read may make things different.

 

Is this your sole residence or do you have alternative accomadation where your mail would normally be addressed to ?

 

If the former, then the main resident would have to declare a second occupant. If the latter, you could claim tempory residence as a visitor, but councils have different guidelines on what constitutes a visitor;.... My own opinion: Two or three weeks, a visitor, three months or more, a resident. If you are contributing to the bills and/or receiving mail at this address, then it adds weight to the residency test.

 

One last point to be aware of: The DWP will often decide that two people living in the same household are living as a couple - Keep personal matters seperate and any food/utility bill sharing on a formal basis.

[PeterBW]

One last point to be aware of: The DWP will often decide that two people living in the same household are living as a couple - Keep personal matters separate and any food/utility bill sharing on a formal basis.

 

The other person is also male and we are sleeping in separate rooms, though he also spends 6 days of the week staying at his girlfriend's place, which on a residency test could even put him living there and make this place a genuine sole residency, just me not him. Trouble is council tax residency makes no consideration for the reality of how people actually live their lives.