self employed - weekly figures not good

krisskross

Lifeisbutadream wrote: »

Sometimes you have to speculate to accumulate.

I run a business with my DH - the first year we made a loss, the second year we made a tiny profit and the third year we made a little bit larger profit.

With the credit crunch upon us, I expect that we will slow down and make less profit than we have forecast in our 4th year, but if we were to walk away then we would have wasted the last 3 years. Ours is not the sort of business where when work dries up you are just sat around, we are still working loads of hours, just making a lot less money!

Obviously if we werent making enough to live on one of us would have to work 'elsewhere' as well though.

Yes I understand you made a loss but I guess you were still paying yourself wages and I suppose had budgetted for a loss when you were just starting out so a profit would be a bit of icing on the cake? Is that how it works?

Lifeisbutadream

krisskross wrote: »

Yes I understand you made a loss but I guess you were still paying yourself wages and I suppose had budgetted for a loss when you were just starting out so a profit would be a bit of icing on the cake? Is that how it works?

Yes we used my redundancy money to start us up, then we just pay ourselves enough to get by, saving the rest for the 'bad times'.. I only wish the good times had taken us for a few more years though - we have enough money to last us a few months, but not long..

I do totally get your point about the working part though - I know that if we were really scraping the barrell (sp?) then one of us would have to get another earning job - I would hope that we wouldnt have to give up the business though after all the hard work we put in!

Purple_Sparkles

If you go to the tax credits website you can enter your details and get a rough calculation, you will have to do it twice using £7 & £13K but it will give you an idea.

I'm self employed with a young son, I don't get housing or council tax benefits but do get maximum tax credits as my income from self employment is low.

The reason I'm self employed is because I don't have a network of family or friends that could help out if I need my son looking after if he's ill or during the holidays, but it does mean I'm not having to claim income support and I can be flexible with my working hours.

raq

i shall look on the website. ( any idea of the website address )

We also used a bit of my redundancy money to get us started. i..e. purchase van, materials . Also got a couple of months under our belt.

raq

hi all

sorry for the delay in replying but quite a few family problems.

Anyway, I actioned the entitledto website with the figures of £7k and £13k and I can't seem to work it out. The final result page is the same. Really don't know whether to ring the wftc helpline and ask them. My hubby's accountant did mention although the figures for the last 6 months are pretty low ( due to workload is pretty slow within the area and country of course ) and to let them know or maybe give them an overall figure of 9k or 10k.

If I call them what do they do?? Do they change the figures there and then??

Many thanks

cw18

I've always called them at regular intervals during a year when I can see a significant change in income happening by tax year end. If you do this they will recalculate using this years figures rather than last years -- and I personally prefer this way of doing it as it means there's less chance of being under or over paid.

But if you're already on the maximum (which I suspect you may be due to the website giving you the same answer with both figures), then it won't make a difference anyway.

I don't have a clue how the other benefits work for self-employed people, but it seems to me that £7 is considerably lower than you'd get on IS if neither of you were working (£94.95 for a couple, plus £52.59 for each dependant child = £252.72/week or just over £13k a year). Not sure if I read an earlier post correctly though.....

They got £13,500.00 on their records and we have £200.00 per week.

is that £200/week from tax credits or £200/week including his income, tax credits and child benefit?

Even if that's £200 from tax credits, it may still be worth trying to find out if you can get help with your council tax. Not sure how any kind of housing benefit would work, as you state you have a mortgage and once you "successfully" apply there's a 39 week waiting period until they'll pay anything.


ETA: I assume the income you're quoting for your DH is after allowable work related deductions, such as tools, vehicle, tax, NI etc?

kei_2

I'm not sure you'll understand but I'll try anyway.

Tax credits awards are based on previous years income if it is lower than the current years income. If the current year income is lower than previous years income then the award can be recalculated or if the current year income is £25000 more than previous year.

For example, say 07/08 income is £0 and 08/09 income is set at £13000 you're award would be calculated off 07/08 income because current year is higher than previous year even if you dropped the £13000 too £7000 it would not recalculate as £7000 is still more than 07/08 income.

If your current year is lower than your previous year then the system should recalculate the award.

As for the maximum awards, any award being calculated on less than £6,420 taxable income per year is the max. For every £1 over this figure 39p is taken off each element (bar family element i think) on the award up until £50k.

raq

cw18 wrote: »

I've always called them at regular intervals during a year when I can see a significant change in income happening by tax year end. If you do this they will recalculate using this years figures rather than last years -- and I personally prefer this way of doing it as it means there's less chance of being under or over paid.

But if you're already on the maximum (which I suspect you may be due to the website giving you the same answer with both figures), then it won't make a difference anyway.

I don't have a clue how the other benefits work for self-employed people, but it seems to me that £7 is considerably lower than you'd get on IS if neither of you were working (£94.95 for a couple, plus £52.59 for each dependant child = £252.72/week or just over £13k a year). Not sure if I read an earlier post correctly though.....

is that £200/week from tax credits or £200/week including his income, tax credits and child benefit?

Even if that's £200 from tax credits, it may still be worth trying to find out if you can get help with your council tax. Not sure how any kind of housing benefit would work, as you state you have a mortgage and once you "successfully" apply there's a 39 week waiting period until they'll pay anything.


ETA: I assume the income you're quoting for your DH is after allowable work related deductions, such as tools, vehicle, tax, NI etc?

£200.00 is the wftc figure.
yes also this figure is after tools, vehicle , etc.

think about this over the next day or so on calling the wftc helpline. Okay so far and really don't want a huge over payment next year ( doubt it , but never know ). What figure will we then give in april for 2009/2010 then?

cw18

next tax year you could either leave it based on the 2008/09 income, or do the same thing again and phone at (ir)regular intervals whenever it looks like a big enough change in other income to make a difference. I don't think I've ever let a whole year run on the basis of the previous years income, as I didn't want to risk an overpayment when income went up (and if income went down, then we needed the extra then rather than the following tax year!)

michellefromessex

my OH runs a small business, which is struggling, it has had some good times but atm its pretty grim, many times I have thought about him just chucking it all in for a full time paid job, but tbh he isnt qualified as such in anything, he loves his job right now and its taken 4 years for him to build his customers up I would really feel bad for him having to walk away. Regarding tax credits, his accountant works everything out for us and tells us the amount we have to put on our claims form every year, I will have to contact them next month though as I am increasing my hours of working and my earnings will also increase, as one of us decreases the other increases lol its not ideal as I also have 3 children but its a case of keeping the roof over our heads! good luck, sorry I have no advice but just wanted to let you know that there are quite a few of us in your boat right now.