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Working Tax Credit Proof Of Earnings?

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If getting rid of WTC isn't going to happen (too much of a hot potato!), could recipients be asked to prove their income at the end of the tax year, and pay back any excess benefits? A bit like a tax bill.

E.g. if the 16hrs a week crystal healer can't show 16 hrs at minimum wage over 52 weeks ... (or say 48 to allow for annual leave) .... they have to pay back some of the tax credits?

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What method you suggest they use to prove it ?

What would be the cost of administrating it ?

Edit: I agree it should be done, but above questions may be barriers

Do self employed people not have to complete a tax return? Could that not be used?

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If getting rid of WTC isn't going to happen (too much of a hot potato!), could recipients be asked to prove their income at the end of the tax year, and pay back any excess benefits? A bit like a tax bill.

E.g. if the 16hrs a week crystal healer can't show 16 hrs at minimum wage over 52 weeks ... (or say 48 to allow for annual leave) .... they have to pay back some of the tax credits?

They do ask you for your income - the year after. Which is why people get in a mess with it.

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you have to work to get tax credits, either in a PAYE full or part time job or as self employed, both show proof of earnings. PAYE = payslip. self employed = tax return.

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Do self employed people not have to complete a tax return? Could that not be used?

IMO low income folks not vat registered, just make stuff up & HMRC hardly ever check as they are small fry .

Perhaps if invoices had a bar code that had to be scanned in online, then a computer checked up if they tallied with a bank statement entry of the same amount on invoice, this would be a start,

However, folks could still make up ficticious clients & borrow money to put bank to get WTC, then make up expenses to take out money.

If HMRC don't have a very cheap automated way of checking up, then its full of loopholes

Edited by Saving For a Space Ship

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IMO low income folks not vat registered, just make stuff up & HMRC hardly ever check as they are small fry

Your self assessment return is nothing to do with VAT

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Your self assessment return is nothing to do with VAT

Sorry if my reply was ambiguous, but I meant that HMRC did check up on VAT registered firms, but do not check up on non vat registered ones so frequently.

Edited by Saving For a Space Ship

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Sorry if my reply was ambiguous, but I meant that HMRC did check up on VAT registered firms, but do not check up on non vat registered ones so frequently.

VAT is a different bit to PAYE, company tax and all the other bits of stuff that HMRC can throw at you.

And none of them have very much to do with self assessment tax returns.

http://www.telegraph.co.uk/finance/personalfinance/tax/11230842/How-the-taxman-is-collecting-more-revenue-from-personal-tax-investigations.html

A greater focus on "ordinary taxpayers" and a more "heavy-handed approach" have helped HM Revenue & Customs’ tax inspectors recoup a record amount of tax from savers over the past year.

Figures released under a freedom of information request, revealed in the Daily Telegraph on Saturday, found the amount of tax collected from investigations into self-assessed individual taxpayers stood at £845m in 2013/14, compared with £609 million in 2012/13, an increase of 39pc.

http://www.taxation.co.uk/taxation/Articles/2014/08/26/329831/fact-or-myth

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I know of 3 young single mothers who this year have all jacked in ''proper'' 16 hour per week jobs, (receptionist, cleaner, bar staff)... to take up none jobs instead, (party organizers and online ''product ambassadors'') for certain cosmetic, health product and sex toy firms.

They're obviously still getting the same (or more) TC's without the hardship of having to work a whole 16 hours per week.

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If getting rid of WTC isn't going to happen (too much of a hot potato!), could recipients be asked to prove their income at the end of the tax year, and pay back any excess benefits? A bit like a tax bill.

E.g. if the 16hrs a week crystal healer can't show 16 hrs at minimum wage over 52 weeks ... (or say 48 to allow for annual leave) .... they have to pay back some of the tax credits?

IIRC they now have to register with HMRC if they are self employed.

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Do self employed people not have to complete a tax return? Could that not be used?

The job center were providing "mentors" to advise people they had just persuaded to sign off and go down the WTC road, how to get around that one and keep their full entitlement the next year (see massage the unemployment stats ),this was a good few years ago 4-5

not sore if its the same know

Edited by long time lurking

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According to this article; http://www.absaccountancy.co.uk/changes-to-tax-credits/

In the emergency budget, additional changes to Tax Credits were also made, which saw the rules tightening the for self-employed workers who currently claim working tax credits, whereby they must register with HMRC for self-assessment and provide their unique taxpayer reference number with their working tax credit claim, though this change was initially set for introduction in April 2015, however this was delayed and is now set to be introduced in April 2016.

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Your self assessment return is nothing to do with VAT

IMO low income folks not vat registered, just make stuff up & HMRC hardly ever check as they are small fry .

Perhaps if invoices had a bar code that had to be scanned in online, then a computer checked up if they tallied with a bank statement entry of the same amount on invoice, this would be a start,

However, folks could still make up ficticious clients & borrow money to put bank to get WTC, then make up expenses to take out money.

If HMRC don't have a very cheap automated way of checking up, then its full of loopholes

Thats right they just make things up.

I'm self-employed - have been for over 20 years. I am not VAT regsitered and my tax return is done through my accountant.

Checks are genrally random, although I am sure they have markers for unusual activity.

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I know of 3 young single mothers who this year have all jacked in ''proper'' 16 hour per week jobs, (receptionist, cleaner, bar staff)... to take up none jobs instead, (party organizers and online ''product ambassadors'') for certain cosmetic, health product and sex toy firms.

They're obviously still getting the same (or more) TC's without the hardship of having to work a whole 16 hours per week.

So they fill in an online form that takes 5 minutes or so, then get a web-page from which to affiliate market a product from, and et voila, they are self-employed?! No commitment, money or anything required - just 5 minutes of your time? And that's enough to get WTC?

"I've been posting on messageboards linking to me affiliate page innit - supposed to help wiv Google innit. Takes me 16 hours a week, honest it does."

These days it's an absolute piece of piss to create a job out of nothing through ********.

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Do self employed people not have to complete a tax return? Could that not be used?

Yes they do. People fill in a tax return and the system says yes...you are eligible for WTC. There are not enough staff, or checks to guarantee that what the self employed declare is true. How can any system check that what people say or write is true. ??

Edited by GinAndPlatonic

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