What amoounts to provide for tax credits re: self-employed?

Question

I would like to know from other fellow self-employed colleagues what figures they provide for their working tax credits.
Do you give the amount you have earnt all year BEFORE deductions e.g. £8500
OR do you give the amount you have been taxed on which is your business income minus business expenditure (and which is a lower figure). I think it should be the 2nd. The helpline just say they will accept whatever figures I give them. If it is the 2nd I would need my figures recalculating that have given them in the apst over the years, but if it is going to be detrimental to me then I would rather leave it. I also hate having to give estimates on next year -who can see into the future?! Thanks

Answer 1

Give them the net amount you have remaining after taking out all business related costs, involved in you earning the gross amount.
e.g. you get paid £10k , however all business related expenses amount to £6k. The net is £4k. you would declare to the HMRC the net of £4k as this is the income you have at your disposal.

Answer 2

You give your net figures which you are actually taxed on and you must use the latest figures you have, which would currently be the ones from 6 April 2005 - 5 April 2006. When you get the renewal notice, which must be submitted back by 31 July (?) I think, you should have your 2006/07 figures which must then be used.

Bearing in mind now though, that for your actual tax credit entitlement to change based on income alone, the variation in income must exceed £25000.

Answer 3

Your starting figure should be the one which is entered in box 3.83 on your self assessment tax return.

This is the figure after deducting allowable business expenses, adding back any depreciation charged and deducting capital allowances instead.

You can then deduct contributions to personal pension plans and payments under gift aid (see the notes on the working sheet if this is relevant).

Answer 4

If only i new, i'm fairly new to all this self employed lark (god its hard work). All i would say is ring the helpline and ask them coz if you get it wrong you could end up paying money back if you have been over payed. So if you know your income fluctuates its always best to ring the tax credits helpline to keep up to date.

Answer 5

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