HELP AM I defrauding tax credits

[hayleysbabies]

before i lose my mind can anyone tell me if this is fraud or not i worrying myself sick anyway im work 23 hours and im paid 24 by my employer so i can claim tax credits i then make up this extra hour im paid doing overtime throughout the year

Hmm, well if it goes on actual monthly hours rather than averages across the year, then you might be in trouble OP.

No - not fraud - averaging hours over the year is quite permissible within the rules.

There's some really bad misinformation in this thread.

Hayley, if you honestly believe that you are not defrauding the system, phone them and tell them that you work 23 hours a week but make up the extra time and see what they say.

You need to take into account that it is fraudulent to fail to declare a change in circumstances regardless of whether or not it affects your claim, too. A change in the number of hours that you work is a declarable change in circumstance.

"When you claim Child Tax Credit or Working Tax Credit, you are responsible for making sure that the information on your claim is correct.

We can charge you a penalty of up to £3,000 if you deliberately or negligently gave the wrong information on your claim; when telling us about a change of circumstances; or when providing information as part of our checks. We can also charge a penalty if you have failed to give us information or tell us about a relevant change of circumstances within one month.

Deliberate error is when you have deliberately given the wrong information. This includes claiming for an element of Tax Credits that you are not entitled to, or to increase an element by lying about your circumstances. This can include:

• Claiming to be working 24 hours when you do not work those hours, have not worked those hours recently, or have not intention of working those hours regularly

The penalty levels for failure to notify a change of circumstances within one month is £300 and if the failure continues, we may charge a penalty not exceeding £60 per day. For deliberate and wrong new claims, the charges are:
£600 for a wrong new claim
£1,000 for a wrong second claim
£1,500 for a third new and wrong claim

For a deliberate and wrong declaration, the penalty levels are:

• for the first wrong declaration, 30% of the over-claimed tax credits up to a maximum of £3,000

• for a second wrong declaration, 50% of the over-claimed tax credits up to a maximum of 3,000
• for a third or subsequent wrong declaration, 100% of the over-claimed tax credits."

It continues about co-operation, appealing, interest, etc.

How long has this been going on and how many declarations have you signed with incorrect information?

I dunno. Confused on this one. About 3 years ago I had a zero hour contract. Some weeks I would work no hours, other weeks I would be near enough full time. I phoned up to enquire about the right way to claim tax credits as I desperately needed them to survive. They told me that I needed to average it out over the year.

Someone with a term time contract wouldn't claim more or less each month depending on if the schools are on holiday, would they? Their salary is averaged out over the year.

Equally, in the summer school holidays, i use a lot more childcare than in term time. They told me to average it out over the year and claim based on that figure. Surely it would be the same in this scenario?
Op the weeks that you do your extra days, do you get paid more?

I am on a term time contract - some months I work less than 24 a week (April for example I'm only working half the month!) but over the year it averages out.

Yes, ring them for reassurance.

As ever, there are people on this thread who think their opinions on what the rules should be ARE the rules. They aren't.

And I average childcare over the year.

I didnt think it was a yearly average coz when i was at my last job i worked more then 16 hours (LP) some weeks and was told that i could claim for those weeks but not the others. So if i worked 15 for three weeks and then 20 the next i couldnt claim for the month i could only claim for that one week.

I think you are on dodgy ground OP.

I would stop panicking op.

I don't know the answer, but I know two people in similar circs, who fall slightly short some weeks and do more the next, and it's all logged and over the year counts as total income.

I know one person ( and i am not saying this is right) who claims to be self employed for a few hours on top of about 20 hours paid work.

I don't even know how how HMRC would enforce that scenario in it's check, so your hour, realistically would be hard for them to prove, espcially if your official hours are 24.

Apparently it's OK for lower paid workers to engage in tax avoidance and tax evasion.

Childcare is averaged out but working tax credit isnt.

There is guidance on this!

"For people with fluctuating hours of work:

If your hours fluctuate, then your hours will be averaged over the "cycle of work". Tax Credits will confirm the "cycle of work" that will be used for your claim. Usually, this is four weeks, but for off-shore or term-time workers, a different period may be used.

If there is no pattern to your hours, a four week cycle will be used. Your average working hours over the four weeks immediately prior to your claim will be used, and the cycle will repeat every four weeks to produce a new average. If this average remains over 24 hours, you will be entitled to tax credits.

For seasonal workers:

If you are a seasonal worker, you are regarded as having a "cycle of work" for the part of the year when you are working. You should not be treated as being in full-time work for the rest of the year. You may be counted as unemployed for tax credits during this period."

You and your employer are purposely and knowingly adjusting your weekly hours/pay for the sole purpose of miss leading to gain tax credits - this is fraud. Somehow you have both got it into your heads that its okay to lie on the forms as you do the hours later, but its not.

I think it is unlikely you will get caught out as your employer is in on the fraud, but that doesn't make it any less fraudulent.

If you don't want to be committing fraud ask your employer to pay you correctly and inform the tax credit people of you actual weekly hours and overtime pattern to see what you are actually entitled to. You might be entitled to it without committing fraud.

I couldn't sleep for worrying they would find out and wanted it all back!

Given that income is assessed for the year then I think its ok, not actually looked at guidance notes though.

I would say that tax credits are generally shite at picking up fraud and anomalies. Your biggest issue will occur when your employer is obliged to start real time reporting of salaries to HMRC. That's when they'll pick up that you're not doing 24 hours regularly.

Surely you can average over the course of the year? Or do teaching assistants just get their tax credits stopped in July and August? That wouldn't make sense.

Hayley Again I would really advise calling up and speaking to someone.

There are different rules for the seasonally employed, the term-time employed, the self-employed. None of those will apply to you.

You could argue that your hours fluctuate, but I get the feeling that wouldn't help. It doesn't sound like you'd be entitled very often, which could be a problem financially.

The biggest problem, though, is that you could be racking up a hefty overpayment and it gets worse the longer you leave it. You'll only worry until you know, so call them and explain that you work 23 hours, are paid for 24, and make up the extra hour. They may well class that extra hour as being "on call", which means it wouldn't count, but at least you'll know and you don't need to worry, and you won't be racking up penalties.

The rules are different for term time workers as that's their contracted working pattern and all employers are now reporting their payroll information weekly or monthly in ' real time'

hayley

If you are contracted for 24 hours or your employer can verify you work 24 hours but contracted for 23, there is no problem.
You are making the extra hour up, so you aren't fiddling the system.

There are jealous people on here, who can't stand somebody having what they don't have. ignore them.
Fair enough if you weren't making the extra hour up, but you are.

Morethan Do you work for the DWP?

It doesn't matter that she makes the hour up. At best, it's an "on-call" hour, and they don't count.

It's not jealousy. I don't claim tax credits, but I have no problem with people who do. It's what it's there for. The OP will come out of this much worse than the employer, though. The employer gets a slap on the wrist, and their employee's claims analysed more closely. The employee gets a hefty overpayment and a penalty.

That doesn't sound very fair. So term time workers would end up doing fewer hours annually than op but they would qualify and she wouldn't? Or have I misunderstood?

You and your employer are purposely and knowingly adjusting your weekly hours/pay for the sole purpose of miss leading to gain tax credits - this is fraud. Somehow you have both got it into your heads that its okay to lie on the forms as you do the hours later, but its not.

What bollocks.

Look, no-one on here is a tax credit expert, or if they said they were you wouldn't know if it was true. The only way to be sure is to contact the Tax Credit Office here and find out for certain whether what you are doing is within the rules or not. You obviously don't intend to defraud the system so they shouldn't give you a hard time (and you needn't tell them who you are!), but you do need to know where you stand.

Fairy Term-time workers have their own rules, which wouldn't apply to the OP.

The guidance, though, states that the recognisable periods of no-work, such as the school holidays, should be ignored for the purpose of tax credits. So, the number of hours worked during term times is applied throughout the year, and the entitlement remains even through the holidays.

For example, if you work 20 hours a week for 38 weeks (term-time), but do not work or get paid for 14 weeks (the holidays), the 14 weeks are ignored and the claim is processed at 20 hours per week every week.

ps I've only just realised this is the Employment Issues topic (where I rarely venture), so some people on here probably are experts! The only thing is, you don't know which ones...

It's a very civilized deal for term-time workers. I'm surprised the coalition cutters left it alone.