Sunday, October 18, 2015

Be careful what you say.

In this day and age it is very difficult for you to say something in the public domain without it being checked, dissected, and generally exposed to full public examination.  So one wonders how Michelle Dorrell, a mother-of-four, who shouted "shame on you" on BBC Question time as she confronted Amber Rudd, the Energy Secretary, over the welfare reforms and accused the government of taking the money she had worked "bloody hard for", feels this weekend.

For a start, taking her “evidence” for her own predicament, she was wrong according to the Institute for Fiscal Studies which suggested that, because Ms Dorrell does not make a profit, she is unlikely to be hit by changes to the income threshold for working tax credits, which is being almost halved to £3,850 a year.  Point one.

Point two.  She will also not be affected by the changes to child tax credits, which will only be restricted to the first two children for new parents from April 2017.  David Phillips, a senior research economist at the IFS, said: "On what she has told us she wouldn't be affected by the cuts to the child tax credits or the change to the taper rate because she is not above the threshold.   Even the family element thing comes in 2017, and will only apply to new claimants.”

Point three is where it comes more difficult for Ms Dorrell.  Accountants said that she may face scrutiny from HMRC over her business under a new test for self-employed benefit claimants.

The test requires that in order for people to claim tax credits work must be carried out on a "commercial basis" with a "view to a profit".   Ms Dorrell said that her business makes a maximum of £150 week, all of which is put back into new products and advertising.  The business has a website but is not advertised at her property.   Robin Williamson, an accountant at the Low Income Tax Reform Group, said: "If she receives no income from her business it is always possible that HMRC may investigate to see if this test is satisfied."

So apart from her claims being found somewhat tenuous in relation to money getting cut, she could end up being on the wrong side of an HMRC enquiry into her business.  Not a position anyone really wants to be in. So my advice today is, if you are going public, and that includes saying anything on social media, get the facts right and don’t open the door for people to enquire more about your circumstances.  You might just regret it.

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