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Self-employment questionnaire

Joanna
forum member

Advice & Representation Centre, Union of Brunel Students

Total Posts: 70

Joined: 18 Jun 2010

My client, a Polish national, received a letter from Tax Credits, B&C Compliance Operations.  They make a formal request for information under TC Act 2002 Section 16 (3) (a). There are 46 questions and some of them are reasonable, some are strange (for example asking clients to provide original documents which she has already provided like child’s Birth Cert and all passports), some are downright bizarre (like “do you have clients’ numbers saved on your phone” or “how do you get into clients’ homes”) and some questions are worrying, for example asking for clients’ private home addresses and their telephone numbers.
My client is a self-employed cleaner, she cleans private residencies and is worried about HMRC contacting people and causing her embarrassment. She deals with professional and affluent people who wouldn’t appreciate to be bothered by HMRC. We are happy to answer most questions, even slightly bonkers ones, but whilst I appreciate that HMRC may ask for “any information or evidence”, at which point the client can refuse to answer questions which are simply silly or harassing? Can she also tell them that they already have the passports and birth certificate (as otherwise they would not have paid her Tax Credits for last few years!).
I mainly deal with students and WTC is not my specialism at all, so I would appreciate some help.

     
JohnA
forum member

LITRG

Total Posts: 11

Joined: 25 Jun 2010

I am particularly concerned about the whole area of the self-employed and the actions of the compliance teams within Benefits & Credits.

We are meeting with HMRC next week specifically on this subject in a special sub-group of the B&C consultation forum (which was set up at my request).

Whilst the DWP are driving hard to get people to try self-employment, HMRC are at the same time making it incredibly difficult for people to stay self-employed.

I would find it very helpful if you could let me have a copy of the letter you have received, suitably anonymised if necessary. If you can help in this way please write to me via the contact section of the Low Incomes Tax Reform Group website at http://www.litrg.org.uk.

Anyone else who is struggling to help the self-employed, please feel free to do the same thing.

John Andrews
Chairman
LITRG

     
Joanna
forum member

Advice & Representation Centre, Union of Brunel Students

Total Posts: 70

Joined: 18 Jun 2010

Thank you John. This is the thing precisely; she has a young child at school, so her hours need to be flexible, she has no formal qualifications, so she does not have much choice and her language skills are still poor so working as a self-employed housekeeper is an ideal situation for her but that seems to be met with great distrust by HMRC.

I will anonymise and forward you this letter.
In the meantime (as the response deadline is 16th Feb)- any advice as to the more intrusive questions?

     
1964
forum member

Deputy Manager, Reading Community Welfare Rights Unit

Total Posts: 909

Joined: 16 Jun 2010

It’s a worrying development. I think, if it were me, I would respond based on the info you/client have and state client’s (very understandable) reasons for her reluctance to provide names & addresses of the people she cleans for. If push comes to shove, what if she were to approach her clients individually to see if any of them are prepared to provide letters confirming what she does for them?

     
Joanna
forum member

Advice & Representation Centre, Union of Brunel Students

Total Posts: 70

Joined: 18 Jun 2010

Thank you 1964, this is my way of thinking too, but what if the push and shove go too far? Inside leg measurements and bra cup size? The regs quoted do give them power to ask “any questions” after all :(

     
Tony Bowman
forum member

Senior Welfare Rights Adviser, Reading Community WRU, Reading.

Total Posts: 2034

Joined: 16 Jun 2010

s.16(1) requires that the board have reasonable grounds for believing an award to be incorrect before they can make this information request. The information request must also be needed for “considering whether to amend or correct” the award (16(3)(a)).

I would be inclined to write to them asking for those grounds. If they don’t provide them, or - probably more likely - they only provide nonsense, then at least your client will have something on which to hang an appeal.

It would a dangerous game to try and pick out the particular questions that are not required for considering the claim, but at least it shows there must be some reasonable rationale behind what is asked. It might be worth a google or HMRC search to find out if the same form is used elsewhere, could help to establish the unreasonableness of some questions if, for example, the form was produced for self-assessment and has been substantially unchanged before using for TC purposes.

Not much, I know…

     
sovietleader
forum member

Advisor, Wirral Welfare Rights Unit, Birkenhead

Total Posts: 227

Joined: 18 Jun 2010

We have had a similar questionnaire sent to an Eastern European client who started self employment making and selling craft items.The level of detail required seemed unreasonable, and I simply said she was best answering as well as she could, providing whatever proof she had of stock purchase, sales, and whatever, in the hope that what she told them was enough. The client, who says she does spend at least 16 hours per week in her work, was very worried that HMRC were going to end her tax credits and raise an overpayment simply because she could not prove the hours that she is doing, as well as the fact that she is not able to make similar sales in winter months because there are more art and craft fairs in the summer months.

     
Joanna
forum member

Advice & Representation Centre, Union of Brunel Students

Total Posts: 70

Joined: 18 Jun 2010

JohnA- I am attaching the letter here (suitably anonymised) as the contacts section on the litrg.org.uk has no facilities for forwarding attachments (or I cannot find it).
I am sorry I wasn’t able to do it earlier; just after our exchange I went on sick leave. So I know it might be too late, but here it goes if you still may have some use of it.

      [ Edited: 16 Mar 2012 at 10:32 am by shawn ]
JohnA
forum member

LITRG

Total Posts: 11

Joined: 25 Jun 2010

Joanna

Thanks very much. An over the top effort from HMRC.

We had a constructive meeting with HMRC (we being LITRG, Cit A, the ACCA and TaxAid) and we think we will see rather more professionalism and realism introduced into their procedures in the not too distant future.

There - I have left a hostage to fortune.

I suggest that a robust defence is put in for all reasonable cases and anyone who wants to have a chat can do so via our Contact pages.

John

     
shawn
Administrator

head of social welfare law services, rightsnet.org.uk

Total Posts: 730

Joined: 14 Apr 2010

hi ... have removed the attachment from the above post (we received a note from HMRC saying that the HMRC person/number detailed in the letter was receiving lots of calls) .... however here’s the substantive text of the letter (attached) ....

ps - joanna, john has the original letter

cheers - shawn

     

File Attachments

Joanna
forum member

Advice & Representation Centre, Union of Brunel Students

Total Posts: 70

Joined: 18 Jun 2010

I am returning to this issue and resurrecting this post as 2 months on my client received further enquiry from HMRC. I wish I could be more phlegmatic about it but I am starting to perceive it (on basis of more than just this client) as some sort of harassment or persecution of those unfortunate individuals who are self-employed and their businesses are small, one-man bands, who do not have or need the administrative back-up churning out invoices, receipts etc. I know HMRC are obliged to safeguard public funds and conduct thorough assessments but my client feels hounded.
Any experience of succesful complaints in this area?

Client has also been asked to provide passports and birth certificates as HMRC apparently “do not hold copies of documents sent previously”.
Erm…are they for real?

And finally; are there any guidelines with regards to response time? The letter is dated 3 April, client is told to reply “by 26th of April”; sort of neither a fortnight or usual standard month.

PS: so sorry about previous attachment showing too much details! Thank you Shawn for fixing it.

      [ Edited: 16 Apr 2012 at 03:47 pm by Joanna ]
victoriatodd
forum member

Welfare Rights Technical Officer, Low Incomes Tax Reform Group

Total Posts: 182

Joined: 16 Jun 2010

Joanna - 16 April 2012 01:42 PM

I am returning to this issue and resurrecting this post as 2 months on my client received further enquiry from HMRC. I wish I could be more phlegmatic about it but I am starting to perceive it (on basis of more than just this client) as some sort of harassment or persecution of those unfortunate individuals who are self-employed and their businesses are small, one-man bands, who do not have or need the administrative back-up churning out invoices, receipts etc. I know HMRC are obliged to safeguard public funds and conduct thorough assessments but my client feels hounded.
Any experience of succesful complaints in this area?

Client has also been asked to provide passports and birth certificates as HMRC apparently “do not hold copies of documents sent previously”.
Erm…are they for real?

And finally; are there any guidelines with regards to response time? The letter is dated 3 April, client is told to reply “by 26th of April”; sort of neither a fortnight or usual standard month.

PS: so sorry about previous attachment showing too much details! Thank you Shawn for fixing it.

So your client has previously provided copies of the same passports and birth certificates?

Are they asking for the documents in relation to current year or a previous year (for which they have opened an enquiry)? Is this a formal notice requiring information - if it is then they must give the claimant 30 days under the legislation (reg 32 SI 2002/2014). Does the letter say what the consequence of not providing the information will be?

Victoria
LITRG

     
Pete C
forum member

Welfare Rights Officer, Cornwall Council

Total Posts: 546

Joined: 18 Jun 2010

sovietleader - 13 February 2012 01:41 PM

We have had a similar questionnaire sent to an Eastern European client who started self employment making and selling craft items.The level of detail required seemed unreasonable, and I simply said she was best answering as well as she could, providing whatever proof she had of stock purchase, sales, and whatever, in the hope that what she told them was enough. The client, who says she does spend at least 16 hours per week in her work, was very worried that HMRC were going to end her tax credits and raise an overpayment simply because she could not prove the hours that she is doing, as well as the fact that she is not able to make similar sales in winter months because there are more art and craft fairs in the summer months.

I have just taken on a very similar appeal, although mine has a second element in that HMRC do not accept that the work my client does is ‘work done in the expectation of payment’.

Leaving that to one side there is the question of ‘hours worked’ and having some sort of proof of how many hours were worked over a given period.

While I accept that HMRC have the right to ask for some sort of proof it does not appear that the claimant is ever warned that they might be asked to prove the hours they worked. According to my client the first time anyone suggested he should have kept a record of hours worked was when HMRC started investigating him.

I am considering an argument that it is against natural justice to require someone to produce some evidence of working hours for a past period when they were not notified beforehand that they might be required to produce such evidence.

This is, in my view, doubly relevant to Tax Credits as by their very nature they are paid on account and only finalised long after the period they were paid in respect of has passed.

I don’t do very many Tax Credits cases so any observations would be gratefully recieved.

thanks!

     
Joanna
forum member

Advice & Representation Centre, Union of Brunel Students

Total Posts: 70

Joined: 18 Jun 2010

Victoria; yes, my client did provide same passports and her child’s birth certificate. The letter does not state to which year their enquiry refers but I assume this is a follow up to a previous query about which I posted originally on this topic. I expect this is a formal notice as the letter states “This is a formal request under the Tax Credits Act 2002 Section 16 (3)”
The consequences of not providing this information by the deadline given: “we will stop your tax credits payments based on our concern that you have not told us all your correct details”.

In view of the fact that 2 months ago my client answered 46 (!) questions, the HMRC’s “concerns” seem verging on outright paranoia.

     
victoriatodd
forum member

Welfare Rights Technical Officer, Low Incomes Tax Reform Group

Total Posts: 182

Joined: 16 Jun 2010

Joanne,

If it is a notice under 16(3), then SI 2002/2014 Reg 32 requires that the person is given 30 days to respond.

I think it is ridiculous that they are asking for documents they have already seen and verified.

If you would like to email me directly (.(JavaScript must be enabled to view this email address)) i think it would be worth raising this with HMRC via the Benefits and Credits Consultation Group either on a named case basis (if your client agrees) or as an anonymous general issue.

Victoria
LITRG

     
victoriatodd
forum member

Welfare Rights Technical Officer, Low Incomes Tax Reform Group

Total Posts: 182

Joined: 16 Jun 2010

Just to add, although it is a request under s.16(3) which is information they need to consider whether to amend or terminate the award under 16(1), their power to use 16(1) for 2011/12 has now passed because the tax year has ended. There is no way for them to make a decision on the 2011/2012 claim (to which this notice relates) until the claimant completes her renewal forms. Then they can use their section 18 power. But until then they cannot make a decision on 11/12.

However, what they can do is stop 12/13 provisional payments. There would be no right of appeal if they do this until the declaration is complete (which is the claim for 12/13) and a formal 12/13 decision issued.

A messy situation.

Victoria

     

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