Moving to Universal Credits from tax credits

I'm currently self employed part time working from home . I'm on tax credits and working tax credits due to cross over to UC. I also get standard daily living PIP.
I haven't been able to do any work for about 3 month but I'm to scared to tell tax credits. I have bad fibromyalgia, osteoarthritis and depression so I can't work. Please help me. I have no idea what will happen or how much money I will get going onto UC . The calculator says I'll be over £100 worse off .
My daughter is 17 and doing a level 3 at college.

Hello Gordon,

According to Regulation 6 in HMRC's Tax Credit Manual, it is my understanding that you are still considered as being in qualifying remunerative work to continue to receive working tax credits during periods of illness. It applies whether you are employed or self employed, as long as you meet certain criteria. See links:

www.gov.uk/working-tax-credit/further-information

www.gov.uk/hmrc-internal-manuals/tax-cre...cal-manual/tctm02421

If Vanessa can't work because of illness but still intends to continue her self employment once she is well again and has not ceased trading and she meets the Regulation 6 criteria, then she is entitled to continue to receive WTC for up to 28 weeks. If she is still unwell after 28 weeks, then that is when she is required to notify HMRC and her entitlement to WTC ends. There is no 4 week run on thereafter.

This 28 week run on due to illness is little known about. I had to stop work whilst on WTC a few years ago whilst self employed but did not close my business (cease trading officially). I applied for ESA and continued to receive WTC in full for the first 28 weeks simultaneously, although my weekly WTC award was deducted £ for £ from my weekly ESA award, because it was Income Related. However, I didn't have to apply for ESA as self employed, I just had to be entitled to it (I sought advice at the time). I only had to notify HMRC Tax Credits Office once I started my ESA claim because they require you to do so, but I had been unwell and unable to work weeks before that. My illness continued beyond 28 weeks and so my WTC claim ended when I notified them. By then I had already been placed in the Support Group for ESA.

I hope you don't mind me raising this. I am, of course, open to being corrected.

Vanessa's situation might be complicated because if she has received a migration notice, then she has to apply for UC. And if she is too ill to work, then would have to submit a fit note at the start of her claim and undergo the work capability process to be found to have LCW or LCWRA. There is no equivalent provision in UC as with WTC for still being considered as in 'remunerative work' during periods of illness as self employed. She has to supply a fit note and go through the whole assessment process.

Just thought I should raise this. Of course, if Vanessa has stopped her self employment completely and closed her business, then she should have informed HMRC within the first 4 weeks of doing so, according to Regulation 7D of HMRC's Tax Credit Manual, as you mention.

www.gov.uk/hmrc-internal-manuals/tax-cre...cal-manual/tctm02466

Libra

Thanks Gordon.

Hope you don't mind me saying, I'm not sure Vanessa is actually required to inform HMRC Tax Credits Office that she is off work due to illness, unless she were applying for New Style ESA (she can no longer apply for legacy Income related or Contribution based ESA). When I sought advice when I was off sick as self employed on Working Tax Credits, I remember being told, HMRC Tax Credit Office are only interested in you reporting illness IF it goes beyond 28 weeks or IF you apply for another benefit, i.e. ESA. Basically, at the time I remember thinking I needed to provide HMRC Tax Credits Office with a fit note but being told they are not interested in receiving those and don't require them - in effect, you are self-certifying. But again, I am happy to be corrected.

From Vanessa's post, it is not clear to me if she has stopped work due to illness or if she has ceased trading entirely and closed her business(therefore, no longer self-employed).

If she has stopped working due to illness but her self-employed status is ongoing, then she is considered to be in qualifying remunerative work for up to 28 weeks as long as she meets the Regulation 6 Tax Credits Manual criteria. That is to say, had she been employed rather than self employed, would she have been eligible for the benefits outlined? The key point is as self employed (unlike employed) on WTC, she does not have to be in receipt of those benefits, just entitled to them. It was explained to me that the 28 week run on for self employed WTC claimants is meant to mimic statutory sick pay (SSP) which the employed on WTC can access but the self employed can't.

A point I would underline is that calling the Tax Credit Helpline and speaking to a phone advisor may not be very helpful to her. My experience is there is a deficit in their training and likely they will be unaware of the Regulation 6 provisions. It needs a more senior HMRC Tax Credit Decision Maker to understand it and they don't tend to man the phones. Before contacting HMRC Tax Credits Office, if Vanessa is concerned she can seek advice elsewhere. However, she should always refer to the Regulation 6 Tax Credit Manual 28 week run on, which she can rely on if factually she has stopped work only because of illness and not because her self-employment has ended.

If she has been sent a UC migration notice, then her tax credits will come to an end anyway.

Libra