Tax Credits (Self Employed) Please Help

Sixer

merlin68 wrote: »

I pay my NI monthly by direct debit much easier. You get a form from housing benefit, where you list all costs. they go by net profit not gross.
If your self employed why are they paying your tax? I have to pay my own. Tax credits also ask me for net profit not gross.
Don't you have to do a tax return once a year? Seems a bit odd to me.

Self-employed subcontractors on large building sites (rather than self-employed small builders who come and do your extension for you) are almost always taxed at source under the Construction Industry Scheme:

http://www.hmrc.gov.uk/cis/index.htm

ironman1

Cheers, no oddness at all. Also felt as if another poster above was having a go earlier about making sacrifices, working nearer home etc.

Me and my GF are one of the few couples/friends our age I know who are doing things legit- Working, moving out, mortgage and having a baby we want to bring up without the need of the social putting us in a paid for three bedroom house. Sorry if you didnt mean it like that but it felt like it by the tone of the message

POSITIVE_AND_FOCUSED

Hi there, Im self employed and had problems with tax credits in years gone by which my accountant sorted out in a jiffy, and all was well. Also, I found my local MP very helpful. Perhaps you could consider either route if need be..Good luck

ironman1

Ok, well I have spoken to them on the phone and gave our details. Now just got to send the form. The woman did say it only gets backdated to the day they receive it so better get our skates on.

I admit I am worried though. When we moved out you think of having kids (we got a two bedroom for this reason mainly) but you don't really know whats round the corner in terms of jobs, when baby will arrive or how you'll manage.

I'm starting to think we went a bit ott in the emotion of moving out and should have got something for less money. But living in London it's hard to find property at affordable prices when on low wages. Thats why we went down the Shared Ownership route, which is no cheaper other than smaller deposit to be honest.

Yesterday I started getting myself worked up over how we will afford to live once my partner loses the maternity money. Someone mentioned going straight back to work, which is what she is planning, but all our family work so we will have to put our boy in a nursery. (she works in one but they dont allow own children so no discount or anything).

I know there are people worse off than us but I stand by what I said- we at least tried to make a go of it by buying first, then having a baby we can provide for rather than knock a kid out when living with parents and have everything done for us. Like quite a few people we know.

I work 45-70 hours a week, if I could do more I would. To be honest I wish I could get a better job but building is all I know. Anyway I'm sure it will work itself out but i'm feeling like crap at the moment

Hammyman

merlin68 wrote: »

If your self employed how are you paying your tax and national insurance? You haven't put those down.
when claiming tax credits as self employed you put your net income down i.e you can knock of travelling, clothes lunches etc.

Err no. When you're self employed you put down your net PROFIT, not net income. Net profit is turnover less tax deductible expenses. Net income is gross income less tax and national insurance. You have to declare your gross income which is your net profit, not your net income.

Hammyman

ironman1 wrote: »

Whats odd? I do a tax return yearly yes. The boss sorts our weekly tax for us as we are sub contractors. It's all above board for a big firm. Alot of builders are self employed but work for companies these days rather than on the cards

Just to add, tax deducted at source is how the construction industry works for self employed trades. I forget what its called now but it is industry specific and set up by HMRC.

Hammyman

ironman1 wrote: »

I know there are people worse off than us but I stand by what I said- we at least tried to make a go of it by buying first, then having a baby we can provide for rather than knock a kid out when living with parents and have everything done for us. Like quite a few people we know.

I work 45-70 hours a week, if I could do more I would. To be honest I wish I could get a better job but building is all I know. Anyway I'm sure it will work itself out but i'm feeling like crap at the moment

Hats off to you for doing it "the right way". Its a shame you bought though - you'd probably be a lot better off moving out of London even though wages are lower.

Sixer

Hammyman wrote: »

Just to add, tax deducted at source is how the construction industry works for self employed trades. I forget what its called now but it is industry specific and set up by HMRC.

I said that already!

Sixer wrote: »

Self-employed subcontractors on large building sites (rather than self-employed small builders who come and do your extension for you) are almost always taxed at source under the Construction Industry Scheme:

http://www.hmrc.gov.uk/cis/index.htm

pipscot

Hammyman wrote: »

Err no. When you're self employed you put down your net PROFIT, not net income. Net profit is turnover less tax deductible expenses. Net income is gross income less tax and national insurance. You have to declare your gross income which is your net profit, not your net income.

I thought I said that!!!

pipscot wrote: »

Don't get confused between "net profit" and "net earnings"
For the self-employed, "net profit" means that you subtract all your expenses from your total gross turnover (but do not subtract tax/NI or any other non-business expense). "net profit" is the before tax figure and this is what you need to declare to Tax Credits

pipscot

Sixer wrote: »

I said that already!

It's as if people don't read the entire thread...!