Working Tax Credits - Self-employed

cadenza82

I've recently been advised that despite being self-employed I am entitled to claim working tax credits as on balance I do work 30 hours a week, but have a low income. I've got the form now and it seems quite straightforward - I've got the profit details from the 09/10 tax return to put on too.

What I'm unsure about is what happens when it coms to renew the claim? So far as I understand, the claim is renewed annually - when this happens, will I be asked to give the income from the next tax return (i.e. 10/11 etc.), and then the next year will be worked out from that? My 10/11 income is likely to be lower than the previous year, but next year may be higher - I don't want to end up being overpaid and then having to pay it back.

I hope that makes sense!

David

Hammyman

You give them an estimated profit. If it looks like being wildly out by around December, give them a revised estimate and that way any over or underpayment will be sorted out before April. Come renewal for 10/11, you give them the actual figure and the 11/12 payments are adjusted accordingly. Sounds complicated but it all works out.

cadenza82

Thanks - I was a bit confused because it talked about letting them know if your income went up or down, but in reality, I don't really know the final figure until it comes to Tax Return time.

PasturesNew

cadenza82 wrote: »

Thanks - I was a bit confused because it talked about letting them know if your income went up or down, but in reality, I don't really know the final figure until it comes to Tax Return time.

That's why many self-employed never bother claiming.... first you don't know about it, then you don't know you could get something, then you don't know how much you've earnt until the end of the year ... and then you optimistically hope/believe that things are on the up, so you leave it

cadenza82

This is so true - I've probably always qualified for them (as long as they've existed in this form), but it wasn't until someone mentioned it and I investigated it that I knew about it. My understanding has always been that society's attitude to the self-employed is 'you've made your bed so lie in it'...