Tax Credits refuse to believe I am self employed and have BANNED me from claiming!

[SickOfBeingSoScared]

ALSO POSTED IN FREELANCERS/SELF EMPLOYED.

Set up a business in May this year. This involved offering free introductory sessions, lots of leafletting/advertising and a lot of research. I had to put my DC in part time childcare and claimed childcare and normal tax credits for this. The business was registered with HMRC. had a website, business cards, business phone line, directory enquiries listing etc.

Two months in, I was asked to provide proof of my self employment in terms of advertising, breakdown of hours worked etc. I supplied proof of everything they asked but they decided that I was not entitled to working tax credits as I was not 'working in expectation of payment' as I had not yet produced any income. The letter stated this with no explanation as to how they had reached this decision. I spoke to the compliance officer who decided this and she would not explain, just said I could appeal. I had to immediately give notice to the nursery but pay the months notice which left me a lot out of pocket!

I was told an appeal would take between 4-6 months to reach a decision! I went to my local MP and he said he would help. 6 weeks later, he sends me a letter enclosing an appeal form from HMRC saying that they have said I should appeal, well that was why I asked the bloody MP to step in so I did'nt have to wait 4-6 months for an appeal!!!

I am at my wits end! I should have been allowed more than 2 months to make some money surely. When I first out the claim in, I was told they would base my claim on what I would earn over the whole year and at no point said that I had to generate income immediately.

I was also advised that 'compliance' had put a note on my claim barring me from claiming as self employed in any capacity - WTAF!

Can anyone advise me on this?

[Collaborate]

Have you not lodged your appeal yet?

Yes, the appeals process is cumbersome, but there's no point complaining about it, and doing nothing in the meantime in the hope that someone will make you a special case. You'd be half way to the appeal by now if you'd have lodged it straight away.

[RedHelenB]

You should be getting child tax credit though regardless. Have you not charged for anything yet?

[PatriciaHolm]

Um - this was in July? If you had appealled then it would be sorted by now!

Two months is actuallyt quite a lot of time for a small business not to generate any income at all.

Appeal. That's all you can do.

[HappyMummyOfOne]

The HMRC site itself says you can claim for hours where you have been or expect to be paid. If you havent done any actual work you will be paid for then your chances of appeal are slim.

They are cracking down on SE people where little or no income is claiming to be made.