Working tax credits - seasonal workers

Working tax credits - seasonal workers

Didn't find your answer?

A sole trader (single individual, no kids) in the UK aged over 25 works on average 40 hours per week for 9 consecutive months per year and 20 hours per week for the remaining 4 consecutive months.  This pattern is repeated annually.

No thread drift please about whether the 20 hours can be "upped" by creative thinking.  Take the figures are factual.

The working hours are dictated by seasonality of trade outside of the control of the trader.

Disregarding complications that might be caused by holidays etc, my understanding is that he is required to cease his tax credit award at the conclusion of his 9 month stretch and then re-apply at the end of the 4 month stretch, each and every year.

This despite that taken on an annual basis the average working hours per week exceeds the required 30.  However the statutory average is calculated on a 4-week rolling basis, so that seasonal workers cannot benefit.

Have I got this right?  And will it be different under Universal Credit?

Thanks

With kind regards

Clint Westwood

Replies (3)

Please login or register to join the discussion.

avatar
By Cathy R
26th Sep 2013 14:32

My understanding is that Universal Credits replace tax credits, and as they are linked to RTI it will not be necessary to stop and start claims as HMRC will know on a real time basis what the earnings are and adjust the claim accordingly.

 

I believe you have it right for the current system, the hours worked are relevant on an actual basis not an average basis, which makes sense really otherwise you could be claiming working tax credits for periods when you are not actually working.

Thanks (0)
Morph
By kevinringer
02nd Oct 2013 13:51

Will be different under UC

You are correct regarding the current situation - existing claim would ceased at the end of every 9 month period, but earnings will be based on 12 month total. My understanding under UC is that there are no minimum working hours, but there will be a minimum income floor which DWP have indicated will be 35 hours @ NMW (even though claimant is self-employed). Cathy, RTI is not relevant for a self-employed UC claimant: the claimant will be required to submit monthly I&E within 14 days of the end of the reporting period.

Thanks (0)
avatar
By Cathy R
03rd Oct 2013 08:45

Oops

I missed the Sole Trader bit - i was thinking only of PAYE!

I didn't know about the monthly I&E submissions either so thanks for that, I must look into that a bit further!

Thanks (0)