Tax credits and the newly self-employed?

debbie_debt

Hi everyone,

I'm sure someone will have asked this before but I've had a look and can't find the answer...

My partner's looking at going self-employed. Currently, the household income is just over £60k so we get virtually nothing on tax credits. If he went self-employed though, how would tax credits look at it? How do they estimate your first year's income to decide if you're entitled?

My income's £25k of our current income and wouldn't change.

Any advice kindly received!!

Thanks

karenx

So your partner is giving up a 35k a year job???

wobin

you and your partner (possibly with the help of an accountant) would have to make an estimate of net profit for SE income and also declare what he has earned through employed work also.

If at any point you feel you have over or underestimated the income give them a c all to amend to avoid Overpayments.

debbie_debt

karenx wrote: »

So your partner is giving up a 35k a year job???

He's considering it yes. Although we have a good income, massive petrol and childcare bills to pay and credit cards we're desperately paying off means it really doesn't leave enough to save for a mortgage. And we desperately want our own house. If he goes self-employed he's got a chance of earning pretty major money but it takes time to filter through and invoices to be paid etc so we'd struggle for cash flow initially. Hence why we're thinking about what tax credits will help with!!

debbie_debt

wobin wrote: »

you and your partner (possibly with the help of an accountant) would have to make an estimate of net profit for SE income and also declare what he has earned through employed work also.

If at any point you feel you have over or underestimated the income give them a c all to amend to avoid Overpayments.

Hmmm... this is going to mean we still wouldn't be entitled to any tax credits in the short term to cover costs isn't it? :mad:

karenx

Possibly yes. You should still be getting the basic CTC rate of about £10 per week though