HMRC internal manual

Tax Credits Technical Manual

TCTM02411 - Entitlement: WTC entitlement - qualifying remunerative work: work for payment

The payment made must be in return for work done and not for another reason. The work can be as an employee, a self-employed person or as a director of a limited company. Work done on a therapeutic basis can also be treated as qualifying remunerative work, provided it is done in return for payment.

Work done in expectation of payment:

Work done in expectation of payment means more than a mere hope that payment will be made at a future date. There should be a probability rather than just a possibility that a payment will be made. If a person reasonably expects payments for work done then the condition is satisfied. However, if the person knew before starting the work that payment was unlikely to be made, the remunerative condition is not satisfied.

Work done setting a business up is not generally classed as being done in expectation of payment. A person will only reasonably expect to be paid for work done once the business is up and running.

Where a retail trade is being carried on the price paid for the goods is not remuneration for the salesman. Whether a self employed retailer is working in expectation of payment cannot be determined simply by the mark up on goods sold.

It does not necessarily matter that a self-employed earner might trade at a loss.

For what constitutes self-employment for the purposes of tax credits see TCTM02415.

Work for no monetary reward:

If the only payment made is in kind (for example groceries for a person who works as a shop assistant, or free accommodation and farm produce for a farm labourer) the work is for payment.

Alternatively, if no payment in cash or in kind is made and the only payment for the work is earnings calculated notionally, the work cannot be treated as `work done for payment or in expectation of payment. TCTM02420

See TCTM02440 to TCTM02450 for more detailed guidance on what constitutes qualifying remunerative work.