Working Tax Credit – definition of work as a condition of application

As you can see from its title, a Working Tax Credit can only be applied for by someone who is holding a job of any nature, which fails to pay all their expenses in order for them to ensure that the minimum living conditions apply. So, let’s see what can count as work by definition and whether someone who is self-employed can apply for a working tax credit.

What counts as proper work?

• When you are legally employed by someone who is your employer in a status as a worker, part-time worker or employee.

• You are self-employed properly counting and paying taxes after your working hours

• You are both employed and self-employed in the same time.

What happens when you are self-employed?

It’s important to note that not all self-employed people can apply for a working tax credit. There are certain exceptions, such as the following:

• You might not qualify to obtain a working tax credit if you don’t make any clear profit from your business and/or you did not work out any business plan on how to make profit in the future

• You might not quality if you don’t work on a regular basis

• If you cannot prove all your payments even after your self-employment by detailed business records and cannot otherwise provide proofs of functioning for your business

• If you fail to pay taxes or to follow any sorts of regulations (e.g if you don’t hold a licence you should otherwise need for your business)

• You can only apply for the working tax credit if your average hourly profit that’s the outcome of your business is proven to be below the national minimum salary.

If you are self-employed and opt for a Working Tax Credit you will be asked to provide the following additional documentation:

• You detailed business records

• Your professional Business Plan (read more on how to put a business plan together on the governmental website)

• Further details, invoices resulting from your day-to-day business activity

• Proof of proper marketing: you must prove that you did your very best so far to promote your business with flyers, ads, posters or anything of similar nature)

Your salary as a self employed

You must provide proof that you work lasts at least 4 weeks and you would be paid accordingly.

What does not count as a paid work?

• Rent a room scheme money

• For any work that’s done while someone is in prison

• Any grant/scholarship you are given during studies or for training

• Any sports or other award you are given

When you apply for a work tax limit, the minimum income will always be compared to your actual living conditions and how you apply for a working tax credit. The minimum required income is therefore different for the one who applies for it living alone with a child and also different for one without child or for those applying for a Work Tax Credit as a couple. For more information call Working Tax Credit Phone Number and check out the gov.uk website.