Wtc Question Help: How Do I Calculate Self-employed Profit??

opiumbeauty

Hi All

Looking at WTC and being self-employed, I need to answer to following qiestion -

If you were self-employed from 6th April 2007 to 5th April 2008, what was your net [URL="javascript:DoGlossary('selfemployedprofits')"] self-employed profit[/URL]?

But the thing is, I only started my self-employment from 1st of August 2007 - do I still qualify? How do I work it out? I had a projected income of around 12000k per annum.. Please help, anyone?

James123_2

The dreaded Tax Credit regime, good luck!
However, IF your self-employment started after the start of the tax year then you can only put down the actual amount made in this period itself. You will, I guess have had other income to August '07 which might balance this out anyway. Your income will rise next tax year, but the TC folk work on the previous year's earnings anyway. If you're canny, you'll have loads of start-up costs so won't make much £££ in the first year anyway - as is usually the case.

PS ... You'd only qualify from the period your actual work began, assuming you're under the threshold. This is my take, do please seek the advice of others.

[Deleted User]

Income from self-employment
If you are self-employed (either on your own or in partnership) and you
have completed your 2007–2008 Tax Return, enter your profit for the year
from 6 April 2007 to 5 April 2008 from:
• box 3.10 on the Short Tax Return (SA200)
• box 25 on the Self-employment (short) pages
• box 71 on the Self-employment (full) pages
• box 14 on the Partnership (short) pages or the Partnership (full) pages.

If you have more than one business
Work out your total profit by adding together:
• the adjusted profit from each of your Self-employment pages
• your share of the adjusted partnership profit from each of your
Partnership pages.

If your business received other income or profits
For example rental income, include it here. Add any entries in the following
boxes to your profit:
• box 27 on the Self-employment (short) pages
• box 73 on the Self-employment (full) pages
• box 17 or 26 on the Partnership (short) pages
• box 17, 66, 69, 72 or 73 on the Partnership (full) pages.

If you have not sent us your Tax Return for the year ended 5 April 2008
You must estimate your profits for 2007–2008. See the box 5.7 notes
on page 27.

Averaging for farmers, market gardeners and creators of literary
or artistic works
• box 70 on the Self-employment (full) pages
• box 10 on the Partnership (short) pages or the Partnership (full) pages.
Averaging for farmers, market gardeners and creators of literary or artistic
works is not allowed in tax credits claims. If the entry in these boxes:

• increases your profit —

deduct this amount from your total profits

• reduces your profit —

add this amount to your your total profits.


If you traded outside of the United Kingdom in 2007–2008
You should enter your profit in British pounds,

not the foreign currency.

Phone the Helpline if you need help with this.

Losses
If your business made a loss in the tax year 2007–2008 enter '0' in box 5.5.
The tax credits rules on losses operate separately from the Income Tax
rules, so for tax credits purposes, you can deduct the loss from:
• any other income you may have for that year, or
• in a joint claim, any other income which you or your spouse or personal
partner may have for that year.
Working sheet TC825 gives more information about losses and will help

you work what to enter.

If you need the TC825 form here it is:
http://www.hmrc.gov.uk/forms/tc825.pdf


This information is within the guidance book that comes along with your claim pack. From page 17 it gives advice regarding self employed income.