Job Seekers Allowance & Tax in Self Employment

kot

I wonder if someone could clarify how Job Seekers Allowance works when you are self employed with regards to tax.

I am aware that JSA is a taxable benefit and when I filled my 2008/2009 tax return I have to include this as income of a sort.. what I was not aware of is that it would appear I am liable for the tax on it... is this correct?

If so how does this work when you are employed and not self employed?

The main issue will be on my 2009/2010 return because I have had so little work and claimed JSA (im a construction worker) will I get hammered with a tax bill?

I have asked at the job centre they told me I was not liable for tax but the tax office has told me I am.... confused

Many thanks in advance

out_of_cash

i am also wondering this i have a 3mths of work starting in a few wks but if i am to repay tax on the jsa i have been getting this all seems mental as weve all paid into the system it seems thousands to get zero back this surely cant be right having to repay tax on jsa income?

HELP anyone

krisskross

The JSA will be counted towards your taxable income for the year. You will be given a p45 when you sign off to give to your new employer.

Now no one is going to ask you for any money to be repaid but the JSA you have received will be counted as prior income. Just the same as if you are changing jobs what you earned in your previous employment is counted as it is income in that tax year no matter where it originates. I know I'm not explaining this very well but you will still have your tax free allowance like everyone else. You will not be expected to repay any money to DWP. You will simply pary tax on your earnings like everyone does.