New test for genuine self employment for working tax credits

A question about : New test for genuine self employment for working tax credits

Not sure if I've missed the announcements for this, but bearing in mind there's been a few threads recently regarding justification of working hours for WTC I thought this might be of interest.

https://www.cafamily.org.uk/news-and-...enefits-sytem/

Tax Credits From April 2015 there will be a test for self-employed people claiming Working Tax Credit.
Any self-employed person whose earnings are below the national minimum wage x 24 hrs (currently Ј156 pw) will need to register their self-employment with HMRC and show the Tax Credits Office that they are involved in genuine and effective self-employment.
This rule will not affect eligibility for Child Tax Credit.
In order to make the tax credits system more responsive to changes in claimant's circumstances, the number of payments in-year will be reduced. This will prevent the build-up of overpayments.

I would have thought the requirement to register self employment with HMRC was mandatory anyway, regardless of earnings. However I wonder what the requirements will be for proving the genuine and effective self employment will be, and whether there will be any dispensation for disabled or single parent claimants who are currently only required to work 16 hours to claim .

Best answers:

• About time! Too many been exploiting this loop hole for far too long!
• Tax credits will be phased out for everyone eventually.
  In work benefits are the next target for cuts.
  If you dont earn enough to live on, tough will be the new policy.
• Thank you for finding it
  "Make the tax credits system more responsive to changes in claimants' circumstances by reducing payments in-year, to prevent the build up of overpayments that must be repaid at a later stage".
  That actually makes much more sense than the link in the original post, so simply if your income goes up, your payments will be reduced in the current year rather than clawed back in the next year.
• It would be interesting to know exactly what this new test will be and how they intend to implement it.
• Well spotted Willowcat!
  Paragraph 2.92 in the Autumn statement:
  "2.92 Access to benefits – From April 2015, self-employed Working Tax Credit (WTC) claimants will need to register their self-employment with HMRC for Self Assessment purposes and provide a Unique Tax Reference number in order to be able to claim.
  Those declaring income less than the equivalent of working 24 hours a week at the National Minimum Wage (NMW) will also be required to provide evidence to HMRC that the work they are undertaking is genuine and effective."
  I was under the impression all self employed people had to do a tax return via self assessment. But maybe they just have to be registered as self employed with HMRC at the moment and are not required to file an income tax return because they don't earn enough? hence them not having a UTR number?
  I wonder if this new 24 hours a week rule will be per individual or per household? In the "working for someone else" world, the minimum requirement for WTC is 24 hours a week per household.
  So if someone is genuinely carrying on their business, say as a taxi driver, but doesn't have a net profit of 24 hours at the NMW, does HMRC say they can't then claim WTC because they're not good enough at what they do for a living?
• Are people who are self employed and in receipt of the disability element of WTC going to be required to meet the 24 hour rule as a result of this change? Or will it still be the 16 hours as it currently is?
• If a self employed person's WTC is stopped, how would this affect any claims for housing and/or council tax benefit?
  Would they then get more of both, on the basis their income had now reduced, or would they not qualify at all because a condition of qualifying for either was to be in receipt of WTC?