Credit Card transfer - self-employed - what's my income?

hungrycaterpillar

Hi,

I tried to get a 0% on bal trans credit card from Nationwide, but I'm self-employed, and when you tick the Self-Employed box, it still wants you to put income.
I confess that my business is doing quite badly at the moment, and I'm trying to get rid of the CC debt, so that i'm back on an even keel.
Problem is, this means that all the money my business makes goes back into the business.
I have no personal drawings from the business.
I had expected the form to ask me for business details, such as incomings and outgoings, takings etc, but it only asked for my income.
So, strictly speaking, I have no income of my own.

Can I put on the form the income of my business, seeing as the credit card debt is business expenses?
I currently have annual takings of around £40,000, and am spending quite a lot of interest on my current credit card, which I'd obviously prefer not to pay, so that I get my debt down.

thanks!

hungrycaterpillar

PS, i'm classified as a Sole Trader for HMRC purposes.

Degenerate

As a sole trader, your income is the profit of the business. Whether you draw on it for your personal use or not is irrelevant, legally there is no distinction between your personal income/assets and those of the business.

CLAPTON

your income is your profit
your profit is the difference between your turnover and your allowable business expenses

whether you spend the profit on champagne or re-invest in growing the business or pay of CC debts makes no difference

make sure you understand this otherwise you will be filling in your tax forms incorrectly and may be liable to fines from HMRC


without knowing the full details its impossible to comment further

do you have an accountant?

chattychappy

Degenerate wrote: »

As a sole trader, your income is the profit of the business. Whether you draw on it for your personal use or not is irrelevant, legally there is no distinction between your personal income/assets and those of the business.

True, but contradictory.

I think a legal and ethical answer is that your income is the profit.

Also true - there is no distinction between your personal income and that of your business. On this basis your income is simply your revenue.

Legally, I think you are safe putting down your revenue (ie the higher figure). If Nationwide take the trouble to have a box for self-employed, then if they want "profits" they should ask for that.

Ethically - well that's a can of worms. Some might argue that if you are strapped for cash then it's wrong to borrow at all. So much moralising on this forum, you're brave to invite answers!

hungrycaterpillar

thanks everyone for replying.
At the moment, I'm not making a profit, so I would have to class the takings as my revenue, is that right?
All of the money coming into the business is going out to pay bills (i'm not taking a wage either), and the extra that my bank is charging on interest on my CC is swallowing money I need!

If I went 0% interest on my CC I can clear the debt in a year, meaning that I can start making a profit.

Because I have turnover of less than £70,000 per year, I fill in the shorter form, which only asks for money taken and money paid out in order to calculate profit (or loss)

It looks like I'll declare the takings as the income for the business.
(I can back this up with paperwork, anyway, I'm not trying to hide anything.

Biggles

Turnover and income are totally different.

You may have turnover of £60,000 but, if your expenses are £45,000, your income is only £15,000. If HMRC asked you what figure you'd like to pay tax on, you wouldn't say £60k, would you?

hungrycaterpillar

that's true, but I have to tell HMRC everything I take through the till, so that's coming in.
This is ceasing to make sense to me!

And i've been usign the cc to pay business expenses, so it does feel relevant, because if I didn't have this stupid interest rate to pay on it, I would have a chance of making a profit!
_pale_

hungrycaterpillar

and if this is the case, how do I get a 0% cc?

Can anyone help me with this problem, please?

chattychappy

References to HMRC are a red herring. They have their own definition of income etc.

hungrycaterpillar wrote: »

and if this is the case, how do I get a 0% cc?

Well, you aren't entitled to one!

You have to choose - either put down your turnover or your profit. If you put the turnover you have a better chance than if you put your profit.

You have to weigh up which is the honest answer. Or ask Nationwide - but then the choice is taken away from you.

hungrycaterpillar

there's the irony i suppose - i'm getting into more debt just by holding onto something I already have!


my bank has put my interest rate up to 25%, and it's killing me.

oh, i hate this recession.