Housing Benefit for Client

jow774 Registered Posts: 465 Dedicated contributor 🌟 🐡 🌟

I have prepared some accounts for a sole trader who is now trying to claim housing benefit as he has had no work this tax year yet. When he submitted the forms to the Council, the lady dealing with his form queried the amount of motor expenses on his accounts and asked him for proof of them! Can the council do this, he has all his receipts and has asked me to prepare a breakdown, but he has already been refunded his tax based upon the accounts which I prepared by HMRC, so how come the council are now querying them, has anyone else had dealings like this?


  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 πŸŽ† 🐘 πŸŽ†
    Council are a nightmare.

    I don't know if they have a right to demand the prime records, but they will automatically disallow travel and subsistence costs (i know!!!!!) and also depreciation - but won't allow for any capital allowances. In the past I have produced separate accounts for HB/CTB purposes which show an "Equipment expense" into which I put anything normally treated as capital purchases, because it's insane that they won't take capital expenditure into account.

    I would get them to phone you to ask exactly what they require, and also say that as they have been prepared by a qualified accountant and HMRC have accepted them thus far, why are they querying them. If they want the prime records, ask them to advise you under which section of law they are entitled to request them, as you are not aware under what provision they can do it.
  • jow774
    jow774 Registered Posts: 465 Dedicated contributor 🌟 🐡 🌟
    Thanks Monsoon. The client is livid and has already upset the woman in question by asking her if she works for the gistapo! I think I will give them a ring and see where we go from there.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    I would take over the matter on behalf of your client. The housing officer is more likely to listen to your comments I am sure.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 πŸŽ† 🐘 πŸŽ†
    LOL, your client has the right of it, though antagonising them probably isn't the best way to go! I think it makes sense for you to talk to them, as TC says, and take it from there.
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    Just had a client of mine go through exactly the same thing. Struggling artist and writer. Makes no money. Has immaculate records. Housing benefit have just suspended all payments.

  • Rachel
    Rachel FMAAT, AAT Licensed Accountant Posts: 349 Dedicated contributor 🌟 🐡 🌟
    Sorry for the rant but I really don't understand howsome people get away with claiming when they are not entitled but the person that needs it has to jump through hoops and prove everything. I know that it is because of false claims that people are treated like this but it seems like the innocent ones that get checked.

    I claimed JSA allowance for 4 weeks in 2007 and I was treated so badly it was awful.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 πŸŽ† 🐘 πŸŽ†
    Declaring income for benefits when you are self employed is a total nightmare. I was on JSA and HB/CTB for 2 years, many years ago, and it was a total headache. My then other half was self employed and my first foray into accountancy was getting his books to show a legitimate loss every fortnight so they wouldn't deduct from our benefit.... My love of accounts and tax grew from there! The Council were so much worse than the job centre.

    I think part of the issue us that they don't look at annual earnings so much, they look at current earnings, so you always have to have up to date books. I seem to recall that if you made a loss one fortnight, and a profit the next (even if due to a timing difference) they would not allow the loss to be set against profits! Their rules are so a removed from the tax rules we are used to, it's utter insanity.
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