Self employment and earnings limit for CTC for Polish national

Hi

My colleague came to me today and asked for some advice.
She has a client who is Polish and is self employed, he has been self employed since March 2016. He made a claim for CTC and was asked to prove his self employment. He has monthly invoices but he only earned around £400 a month. They rejected his claim and he asked for MR which was also rejected. He now wants to take it to tribunal. His earnings have increased since and he now earns around £800 a month and does the same job - he is a mechanic and works for some garages on self employed basis.
Does anyone know what argument he can use and does he have a chance to win or would you advice to just make a new claim for CTC based on his new earnings?
I always thought the amount of £153 a week was just a guidance, but can they refuse him on the fact he only earned let’s say £100 a week, although he can prove this work is genuine as he is still doing it?

thank you

Hi Zuzana,

This thread may be of interest:

http://www.rightsnet.org.uk/forums/viewthread/9556/

I would lodge an appeal against the MR decision in tandem with making a new claim (and challenge that decision too if negative).

Thank you. I think I should have asked my colleague some more questions before posting on here.
Don’t think he will be able to prove his self employment after what I was told so don’t think there is anything I can do.
Thanks a lot tho.

I wouldn’t give up so easily.

see new conditions for Working Tax Credit for self-employed from 6 April for broad discussion about new rules.

i’ve also had at least a couple of clients who were able to win appeals on basis that subsequent s/e earnings were sufficient to disprove hmrc allegations that previous s/e work wasn’t good enough. its certainly worth appealing.

Is this is a CTC enquiry into EEA immigration status? If it is, a Key consideration is the old chesnut that any self-employment has to be both genuine and effective rather than marginal and ancillary. CPAG pages 1542 1543

On issue of Self Employment. Is this an enquiry about WTC as well?

Self Employment is about more than profit, although that is important, other matters include hours worked, and the motivation of the self employment. (Is it little more than a hobby or in expectation of making a profit even at some time in the future) Is your client registered with HMRC as self employed?

Is your client even ‘self employed’ and not ‘employed’ even if he pays his own tax and NI. There are some instances where this can occur although you report he works at more than one garage.

HMRC Guidance reports

A self-employed earner’s expectation of payment must be a reasonable one. The customer must confirm that the work is done in expectation of payment. It doesn’t matter that the self-employed earner might trade at a loss.

The hours that may be counted as being spent in work by a self-employed earner include
• those that will be costed to the client as spent in providing the individual order or service
• those spent in activities necessary to the employment
Work done in expectation of payment means more than a mere hope that payment will be made at a future date. There should be a probability, rather than just a possibility, that a payment will be made.

If a person expects payments for work done, but the customer or employer doesn’t pay, then the condition is still satisfied. If the person knows before starting the work that payment was unlikely to be made, the remunerative work condition isn’t satisfied.

You should do both the new claim and seek to challenge to Tribunal if needed and don’t accept some of the things HMRC state. This is a view, with a right to appeal.

This information from CiH is pretty good I think.

Advising EEA workers and self-employed people

Thanks for all your help however I don’t think I can help this person. He seems to be a victim of modern slavery.
I don’t want to give too much away on public forum but there isn’t much I can do.

Thanks tho

I think we need to draw a clear distinction between the definition of self-employment for the purposes of the Right to Reside test which applies to Child Tax Credits for EEA nationals and the definition of remunerative work which applies to anyone who is self-employed claiming Working tax credits. (Although I am still not clear how rigidly these amendments are being applied in practice).  The guidance on the HMRC website for Child Benefit and Child Tax Credis for Rights to Reside purposes makes it clear (for both workers and self-employed) that you cannot set a level for earnings, and that earnings well below what would normally be considered subsistence do not preclude you from being a worker or self-employed. There is a wealth of European case law on this - Levin, Kempf, Vatsouras and Koupatantze, Genc, Jany - as well as Bristol City Council v FC and R(IS) 12/98 Upper Tribunal decisions.  So an EEA self-employed person might, in principle be able to claim CTC but not WTC.

Ruth