03 Dec

Working tax credits – challenging the “commercial” test.

In early January, HMRC had requested a set of very specific information from me – accounts, receipts, that kind of thing and I had sent them exactly what they asked for.  At the end of January, I went to check my bank balance one day, expecting to see my working tax credits and…nothing.  No working tax, and no child tax credits. I rang the office, expecting for there to have been an error of some kind, only to be told that I had failed their tests and that they would be taking my child tax credits – the money meant for my son – to repay the alleged debt that I owed them.

Devastated, I asked for further information but they could only tell me that the decision-maker’s word was final.  No advice, no word of where I had gone wrong, nothing.

Back in 2015, the rules changed for self-employed people claiming working tax credits and anyone that didn’t meet the new criteria would no longer be eligible.  I thought nothing of it, after all I worked regular hours, was profitable, and my business had a future.  Someone, somewhere, had decided otherwise, and nobody could tell me why.

Ten months later, I have won my appeal against their decision in a tribunal.  It has been tough, stressful, I have used food banks and borrowed money for bills, my son has gone without clubs and classes but we have won, just in time for Christmas.

I could not have done it without some key information, which is what I am going to share with you now, for if this abrupt removal of your lifeline happens to you.  It is cruel and inhumane what they are doing to us self employed people and if you are a) in a creative business and b) universal credit is coming to your area, you are at risk.

To avoid all of this, to exempt yourself from the profitability and commerciality test: 

  • Register as a limited company.  As  company director you will be an employee not a self employed person so the new punitive rules no longer apply.  Be aware though: as a company director, your name and address will be available to the public.  This is a risky move for some people.  Do your research. Be safe.

Prior to your tax credits being stopped:

  • If they ask you for a set of information, receipts etc., know that you are being assessed.
  • Send what they ask for, plus: a business plan for the financial year in question, future financial forecasts for the year in question, flyers, business cards and a comprehensive explanation of your business.  They need to be reassured that you have four weeks’ work in the future to do.
  • Send photocopies only, because I hear they lose a LOT of information that is sent to them.
  • Send it all by special delivery, so that they cannot deny receiving it.  This will all cost quite a bit of money, but trust me, it is worth it.  Losing your documents is a common occurrence.

I can’t guarantee this will, help, but that is the kind of thing they look for.

If you wake up one morning and have no cash, if they have stopped your money:

  • Ring and ask for a “mandatory reconsideration”.  You need to send them anything that you think might add to your case.  Tell them you can’t feed your kids and they need to start paying you your child tax credits back.
  • Citizens Advice can help at this stage.
  • IMPORTANT (because this takes a long time to come) put in a Freedom of Information Request asap. This is VITAL, they will not tell you the exact reason that your claim has been terminated, you will have to scour the information here and find out for yourself.  Within it is a score sheet. This will tell you more.  You won’t get this in time for your Mandatory Reconsideration, but you will do in time for your appeal.

If they turn down your Mandatory Reconsideration:

  • Citizen’s advice cannot help you here, they are not qualified enough.  If you are lucky and live in the right place, see if you can find a Law Centre.  If like me you don’t have the right postcode to get “free” help, you have two options: pay for a solicitor, or, do it yourself.  As I had no cash for a solicitor, I took the latter.
  • Begin your appeal straight away.  Revenue Benefits has loads of information about how to do this.
  • TIME IS OF THE ESSENCE. You have a tiny window of time to appeal in and chances are any letters they send you will be dated several weeks before you receive them, so you have to work fast.  Don’t worry, you will have plenty of time to prepare your case – between three months to a year before your case is heard in the Tribunal court.
  • Use this time to go through your FOI with a fine tooth comb to find out how they have marked you down on their score sheet and find evidence to disprove their (what are likely to be) assumptions.
  • Back this up with evidence that you’ve been working hard in the meantime.
  • Keep a time-sheet, make sure your accounts are kept up to date etc, because when they call you to court, you’ll have maybe two weeks notice.
  • Make a formal complaint.  For me, this confirmed what I had discovered via the FOI, that they had marked me down for information that they hadn’t actually asked for! if you’d like an email address, ask me.
  • Check case law.
  • Try to find someone to go with you.  This availability varies drastically area to area, so you’ll have to do your own research here.
  • Don’t give up.

 

26 Feb

I, Daniel Blake

I, ShoeDoodles

And so the saga continues.  In The Yin and Yang of Life I mused how incredibly bad and painful situations can also bring out amazing light and kindness.  That people who I know and people who I don’t – people who are not even family and have no ties to me – can show such incredible kindness and love has brought me to tears many times.  One minute I can be sobbing in despair on the kitchen floor, the next my eyes are streaming and my heart is full of hope.  That anyone could even care that much about little old flawed me is kind of mind blowing.

A couple of days ago I watched I, Daniel Blake.  You must have heard of the film, it has been much talked about and highly acclaimed.  It’s ironic that the people that the film is about are unable to afford to go to the cinema to watch it (like me).  It’s probably better that way, because it broke my heart right from the first few scenes with it’s very true to life situations and characters.   I should advise – if you haven’t already seen it – that if you have ever been unemployed or sick or have ever been through the welfare system in any way you might choose not to watch it unless you are totally healed and buoyantly happy.

That set my mental health back a few days. I might add that Katie, when she was hungry and went to the food bank and then chose to follow her alternative career path was already at least sixty quid a week better off than me since my tax credits were completely cut.   She would still have been in receipt of her child tax credits – the payments meant to keep your children fed and clothed.

Working and child tax credits are two payments – the working element is paid if you work for 16 or more hours a week and the child ones are received by (as far as I know) by anyone with a child and below a minimum income.  In my case, the working tax credits were cut (apparently I have not earned enough – go figure) and my child tax credits were cut to pay back the alleged “overpayment”.  Katie would have had circa £100 a week still coming in (still not enough for a secure healthy life for three people).  I have less.

Daniel’s situation was one I am trying to avoid. The CAB suggested that I apply for jobseekers allowance or ESA.  I work too much for jobseekers and even before I watched the film I was aware of the hoops that poorly people are expected to jump through for ESA.  My health condition would mean I was eligible but I am not strong enough to fight unqualified assessors and I don’t have enough money for endless phone calls and trips to assessment centres.

I had a letter through on the Thursday, telling me I was allowed hardship payments. There was no mention of how much, or for how long, or with what frequency, or whether or not they are a payment or a loan.  So I checked my bank account and found £65.  I also found out that my broadband and phone direct debit had gone out and it was £10 dearer than expected, so I didn’t dare make another phone call to find out more.

So I’ve been allowed £65 for the past three weeks.  My phone calls to HMRC to find out what was going on cost £10.   I topped up my mobile £5 to make calls when my credit ran out.  I’ve sent two letters to HMRC (the first one didn’t go to the correct office), and three to my local council to beg council tax assistance.  I’ve sent another the the NHS to apply for help with my prescriptions because I realised that if my tax credits had stopped, so would my free prescriptions, opticians and dentist. Six recorded delivery letters at £1.72 makes £10.32.

So out of that £65, I had £39.68 left after the essential spends associated with this termination of my income.  This is without counting my loss of business that I have incurred with the effects that it has had on my mental and physical well-being, which is ongoing.  I also learned from the film that there is no time limit on a “mandatory consideration”, the appeal process that I have started.

You might be wondering why I am airing my dirty laundry in public.  It is embarassing to be this poor. It is heartbreaking to explain to your child that you can no longer afford things they would like to do.   If I can tell my story and help one person, it will be worth it.  What cauuses me great outrage is that HMRC can  get away with making families hungry and cold and yet companies like Vodafone and Goldman Sachs have tax debt written off.  People need to know what is happening!

Thousands of normal working families like me have sent HMRC tax credits timely and accurate information and have found that they suddenly and inexplicably owe thousands of pounds of debt.  We are shown no calculations or reasons for this, we just get a letter one day telling us “tough luck mate, we worked it out wrong and we are taking it back”.

Tax avoiders cos this country billions of pounds and working families have no choice but to be devastated by the miscalculations of the far away civil servants.

I am trying to be positive and am going to do my best to start creating again tomorrow, though I am actually scared of the post at the moment.  I’m hoping postie doesn’t call and I can start the week with a clear head.  I’ve got so much to do, and so much to finish and make and I’m still in limbo.  My cupboards are at least full enough thanks to some amazing local food banks (the three families waiting together just in my group were ALL working families) .  I can only wait now.

UPDATE: I have had a letter now that tells me I am to receive £65 a week until April, after which time we will receive £57 a week.  For two people.  Apparently it is because (I deduced, from reading many websites on the appeals process, because they haven’t told me directly) in the year when I was being stalked and had to change my business and set up a new one, I over estimated my income and as a result of that, they are taking back over £3,000 from me.   How can this even make sense?  It’s like a “small print” clause they do not publicise.  I was careful to share all my information with them in a timely and honest manner and have been punished for it.