what figure to declare as income?

ALIBOBSY

OH was previously PAYE then made redundant. Finally got an agency job albeit short term initially (4 months so not too bad). As per agency reccomendation paid via them and an umbrella company (covers insurance etc).

Question is which figure do I use as income for tax credits. The total gross or the gross figure after the travel allowance and other allowable expenses are taken off.
As I understand it the second figure is the "taxable" amount and is what will appear on the p60 eventually so I assume its this. But don't want to be overpaid.

Any others doing contract or selfemployed work, what is declared?

ali x

ALIBOBSY

can i bump this?

It may be there are more posters later in the day who can help?

thanks

ali x

ALIBOBSY

Still wondering about this, can anyone help please

ali x

zagfles

Generally if it's deductable for tax then it's deductable for tax credits. Im fairly sure that applies to all tax deductable work expenses.

Check here to be sure: http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04000.htm

Hastobe_Katt

I would concur. If it's deductible then it means it was incurred for the purpose of the business - ergo it didn't contribute to your remuneration.

Hammyman

Taxable amount is what is declared.

ACon

Im wondering this too! do I declare the gross pay, or the remittance amount?

ALIBOBSY

Having looked at that guidence kindly posted by zag, I would say definately the second figure. Ie after the travel and food allowances and scheme admin figures are deducted, but prior to tax being taken out. That is the taxable figure. Thanks guys.

ali x

ALIBOBSY

ACon wrote: »

Im wondering this too! do I declare the gross pay, or the remittance amount?

Have a look at what zag posted. On OH confirmations it says an overall invoice figure, then there are the deductions before tax ie business expences etc. Then the result that is left is listed as taxable gross amount. As far as I can see it is this second taxable figure which is declared.

ali x

Elaine_Wilson

Operating through an umbrella company you have to separate out the individual relationships.

The client is charged by the umbrella company. The proceeds of this belong to that company. The person actually doing the work is employed by that umbrella company. This company incurs certain expenditure in relation to the work being carried out. Usually this is paid by the subcontractor and subsequently reclaimed from the company.

The subcontractor is then given a salary. This will be calculated after allowing for the employer's national insurance contributions. It is this gross salary that is critical for all tax purposes, including tax credits.