WTC stopped. Will HB be stopped too?

[BotheredOne]

Hi All,

 

My head is all of the place at the moment due to letters from HMRC's Tax Credit Office.

 

 

I will give you some background info.

 

I have been claiming WTC, CTC and Housing Benefit since 2012 due to low income. I had been working just a few hours here and there. TBH, I deliberately kept the hours down as the total benefits outweighed any potential income. The " Benefit Trap" so to speak.

 

Last year, I decided to go down the Self - Assessment route and contacted HMRC and was issued with an UTR. I have kept my official earnings at around 10K,so not to earn too much.

 

In June this year, I received a letter stating that according to the WTC people my working hours were ' zero' and had been since May 2014.This is when I became "Self - employed". I requested a Mandatory Reconsideration.

 

I received a reply about 7 weeks later saying I was not entitled to WTC because they have no record of my hours worked since becoming self- employed. They have requested further info

 

1. Copies of advertisements placed ( I have never placed any!)

2. A breakdown of the hours you worked in a week. ( I have a breakdown of the amount worked,but not the hours. Should I break this down to say an average of 27 hours a week over a month? )

3.Invoices for any work you have done. ( haven't got any,but could work on that.)

 

To add further woe, I was given until 14 August to provide this, but I only opened the letter last Friday as I had been out of the country for 5 weeks....

 

As I am sure some of you know for the Mandatory Reconsideration the HMRC give two options?

 

1. Choose this option if you DON'T want to proceed and withdraw the request and repay any over payments ...

 

or

 

2. Choose this option ... and supply the requested information.

 

I am tempted to go with option 1 as it seems like a lot of hassle,but have not decided yet.

 

I want to call them tomorrow,but am seeking some advice here first.

 

 

However, I think my biggest worry is potentially losing my HB. I live in London with my wife and child and this would be life changing.

 

If I did choose Option 1 and ended my request for a Mandatory Reconsideration, would this affect my HB?? I know I am supposed to inform my local housing authority of any changed,but haven't.

 

I seemed to have spun a right web for myself,however, writing this feels like the first step. Hopefully, some of you can advise?

 

Thank you,

 

Bothered One

[Tawnyowl]

Hi Bothered One and welcome.

Just saying hello .

The Benefit Trap.

Living in London. High rents, Self Employed, Low income bet many hard working people will be saying snap.

Having a wife and child you have I feel to supply the requested information

Otherwise it seems option one. No hassle then.

No invoices how does that work. Advertising is it leaflets etc.

What do you do. Are you genuinely self employed or as you say just in the trap. Trying to survive the best you can.

Otherwise it seems I feel you could receive letters asking for payment back from May 2014. Sooner or later.

And maybe over payment of Housing Benefit and Council Tax etc. And if you receive things such as Dentist and prescription help it could affect them.

Just came on because this seemed urgent.

Others will advise as the day goes on I am sure.

And please if you telephone them record if possible on your phone or recording device and ask for names.

Keep a paper and diary trail. Dates times the lot

.

[blondebubbles]

It's hard to give much advice on the work front without knowing more about what you do.

 

It is not simply a case of registering self employed with HMRC. You must work a required number of hours per week (24 for a couple).

 

HMRC are coming down on claims where people have simply registered as self employed to claim tax credits and are not genuinely running a business or not for the required hours.

 

The work must be done on a commercial basis with a view to realising a profit and it must be organised and regular.

 

I must admit it seems very strange that you don't have any record of the hours you do, no invoices etc but as I said, it's hard to comment without knowing what you do.

 

As a self employed person you have record keeping obligations for HMRC for tax purposes, what records are you keeping for that?

 

You mention your "official" earnings, what do you mean by that? Do you have earnings you are not declaring? Why are you restricting your earnings to £10,000? I think this is another area that causes concern for tax credits. Businesses would be expected to grow each year rather than steadily being on a low income.

[obiter dictum]

What you need to do is contact the housing benefit at your local council in writing. They will have a dedicated email

 

Tell them your WTC have stopped and you are appealing

Tell them your circumstances have not changed and not to stop your housing benefit

 

I had the same when i moved from JSA to ESA. They told the council my claim for JSA was cancelled while neglecting to tell them in the same letter i was now claiming ESA

 

The housing benefit department had my housing benefit backup and running in no time. The lady at the council said give them notice and they will mark your file of the change and not stop your housing benefit if it happens again

 

The key is on your income coming into your home that decides housing benefit, not state benefits

[BotheredOne]

Thanks for the advice. Really appreciated.

[BotheredOne]

Thanks for your reply. I will try and give you a better idea.

 

 

It's hard to give much advice on the work front without knowing more about what you do. I work as a language teacher and guide. My work comprises of part time work with a language school. No fixed hours and I am responsible for my own tax and NI. Also working for a non UK based company for which I guide and again am responsible for my Tax and NI

 

It is not simply a case of registering self employed with HMRC. You must work a required number of hours per week (24 for a couple). I probably work an average of 24 to 27 hours per week,although this does vary.

 

HMRC are coming down on claims where people have simply registered as self employed to claim tax credits and are not genuinely running a business or not for the required hours.I understand. I registered for this just to show that I had an income ( Genuine) I wouldn't really say that I am running a business. It's more of free lancing.

 

The work must be done on a commercial basis with a view to realising a profit and it must be organised and regular.

 

I must admit it seems very strange that you don't have any record of the hours you do, no invoices etc but as I said, it's hard to comment without knowing what you do. Actually, I have some from the language school and my other records are for the amount earned and not the number of hours.

 

As a self employed person you have record keeping obligations for HMRC for tax purposes, what records are you keeping for that? As above.

 

You mention your "official" earnings, what do you mean by that? Do you have earnings you are not declaring? Why are you restricting your earnings to £10,000? I think this is another area that causes concern for tax credits. Businesses would be expected to grow each year rather than steadily being on a low income.

I have been keeping the earnings down ,so I can keep claiming for HB. I know this is wrong,but there is no way that I could afford the £1400 based on my earnings and live. As for businesses to grow,I know...

 

I am really at my wits end.

[BotheredOne]

What you need to do is contact the housing benefit at your local council in writing. They will have a dedicated email

 

Tell them your WTC have stopped and you are appealing

Tell them your circumstances have not changed and not to stop your housing benefit

 

I had the same when i moved from JSA to ESA. They told the council my claim for JSA was cancelled while neglecting to tell them in the same letter i was now claiming ESA

 

The housing benefit department had my housing benefit backup and running in no time. The lady at the council said give them notice and they will mark your file of the change and not stop your housing benefit if it happens again

 

The key is on your income coming into your home that decides housing benefit, not state benefits

 

Thanks for this. But what if my appeal fails?? or I decide to stop the appeal??

[Tawnyowl]

Keep us updated on what you decide. And any actions you take as it helps others.

I believe appeals can take many many months to conclude. For Working Tax Credit that is.

If they decide after perhaps looking at your case again. after you giving them the details they are asking for still to keep it stopped. That applies to anyone perhaps reading this thread.

 

It sounds like if you are honest about your income you will receive little housing benefit. The trap is set.

You will have to cut back on everything and survive on little. As I suppose many do. As they did generations ago.

 

Only other option I can see is move up to the North if you can run your business ,freelancing here.

And worth a check for Language Schools if you ever consider that option.

For what you pay in rent down there you could have a Detached house up here. And still have plenty of change.

Sad that you may have to consider that option but I bet many have or are going to.

 

 

Worked in Essex a few years ago in Chelmsford. Noticed rents there were not to bad and many people commuting into London to work.

Maybe things have changed now. And of course how much does it cost on the train each day.

 

As for holding income down, well I suppose that happens. Which although wrong I understand what you are saying re the Benefit Trap.

I read of one person in London whose whole wages went on rent. So asks the question how are people surviving who are 100% honest about income in the Capital. And also elsewhere in the country. A problem I feel for many.

 

And in London if rents are so high and keep increasing as they will where are the low paid workers going to live in the future.

Who will keep the City clean, the Tube flowing, the Buses running, the Schools open, the Airports running. Carers looking after people and having to travel around the City.

Sorry thinking aloud and worried. If more cuts happen and things keep tightening up in Austerity Britain.

Solution needed fast please.

 

Best wishes to you and your family and for being so honest in your posts.

Tawnyowl.

[obiter dictum]

As i have said

 

Housing benefit is paid on the income coming into your house

 

Not on any state benefit, so the appeal means nothing in reality

 

People in work claim housing benefit