WTC & Self employment?

dandare

Hi i've been self employed since jan 06, previous to this i was on a new deal scheme.I have also been receiving wtc.
thing is my accountant has only asked for my tax returns from Jan/April 06 and was wondering how to work out if i'm entitled to wtc next tax year, i'll only have a tax assesment for 05/06. i have everything from 06/07 in place and have a reasonable guestimate to date of what i've earned.
do i give the wyc the guestimate or do they work on the tax year 05/06.
any help is appreciated i'm a bit puzzled by it.

Elaine_Wilson

I presume that at the moment (in 2006/07) you are receiving Working Tax Credit based on your income for 2005/06. This will continue up to 5th April 2007.

It will continued to be paid after April 2007 at the same rate on a temporary basis but you will be asked to supply details of your income in 2006/07. The award (for both 2006/07 and the provisional amount for 2007/08) will then be amended. If you do not return the declaration by 31st August payments will stop.

dandare

ok thanks,
this is sort of how i imagined it would work, but how do i give the figures/earnings for tax year 06/07 when all my accountant has asked for covers 05/06 ? does 06/07 returns get handed in/ calculated soon after april 07 ? sorry if this seems silly, i just can't get my head round it.

Hoddie_2

Your current award (2006/07) will be based on 2005/06 income figures unless your 2006/07 income is £25k or more higher. The 2005/06 figures will also be used to calculate your initial 2007/08 payments, though your actual entitlement will depend on your 2006/07 income - you need to advise them of this as soon as you are able to.

Your current year (CY) award is always based on the previous year's (PY) income unless...

- Your CY income is £25,000 or more than your PY income (award will reduce)
- Your CY income is less than your PY income (award will increase)

If either is true then you should call the Tax Credit office and provide an estimate of your CY income. Your payments will then be based on this estimate, though your correct entitlement can only be calculated when you are able to provide actual income figures (after April).

The tax return due later this month is for the 2005/06 year - you should already have told the Tax Credit office what income you had that year, or at the very least provided a good estimate (and you'll need to tell them actual figures asap).

dandare

ok excellent thats sort of cleared it all up.
yep wtc had a rough estimate for 05/06 earnings, i only started s/e late jan so there was only a couple of months of work, before that i was on the dole; my accountant tells me that i have little if anything to pay tax on for 05/06.
the temp assesment for 07/08 i understand, i'll have to tell them my earnings for 06/07. is this is the form of my records of outgoings/income or is it officially from my accountant ? if so when do i get my accountant to do my records for 06/07?
thanks for all the help, we're nearly there!!

isayoldchap

http://www.entitledto.co.uk/