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Benefits and Tax
|State Benefits & LETS|
We advise keeping LETS trading within disregard levels as a precaution.
If you are claiming and trading on a regular basis, this could possibly be interpreted by the Job Centre as meaning that you are not available for work. In this case ask those you trade with to sign a statement releasing you for other work should you be offered employment, and stating that any work you are doing for them can be completed at a mutually convenient time.
We advise anyone claiming Disability benefit to obtain a letter from their doctor, stating the therapeutic and social value of LETS as reasons for their membership, and also stating how the work they intend doing on LETS will be specifically beneficial for their condition.
Tax & LETS
Non-regular activities of different kinds should not be of interest to the Inland Revenue. Currently the vast majority of LETS transactions are of this type, and should be regarded as “social favours”.
As a general rule, individuals will be liable for tax on profits if they are providing regular commercial services according to their normal trade or profession. Since the Inland Revenue can only accept sterling, such traders are entitled to ask a sterling proportion (e.g. 25%) in a LETS trade to cover tax. (The same applies to VAT).
Falmouth LETS cannot be aware of, or responsible for, individual members tax positions, liabilities or returns. All declarations, both to the Inland Revenue, and the Dept. of Work & Pensions, must remain the personal responsibility of each member concerned.