Self employed and tax credits renewal

HMRC have contracts with some private companies to undertake work on their behalf; one of which is Concentrix. If you are contacted by Concentrix in relation to a tax credits claim, you should deal with them in the same way you would deal with HMRC.

From 6th April 2015, the rules tightened slightly and self employed tax credits claimants must be able to demonstrate that their business is conducted on a commercial basis; with a view to achieving profits. These changes will not affect the rules for claiming Child Tax Credit.

The reason you have been contacted, is because the profits from your business per hour equate to less than the National Minimum Wage.

The information you may be asked to provide should be typical business records, such as receipts and expenses, records of sales and purchases, and bank statements. They may also ask for supporting documents such as a business plan, planned work, cash flow and profit projections.

If your business is in its early stages and is not yet profitable, you may have to rely more on your projections and business plans to satisfy HMRC/ Concentrix that you have aspirations of making good profits in the future.

HMRC will use the information provided to reach a decision about the claimants’ current working tax credit award. There is a risk that some claimants may lose their working tax credits if they cannot provide the evidence HMRC ask for and may have to repay any tax credits they are not entitled to.

Date published 5 Jun 2015

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.