Tax Credit for Self Employed

Anniek1969

Just wondering if anyone could advise. My DH is becoming self employed within the next few weeks, he currently earns around £250pw and we receive £88 tax credits. As he is going to be self employed we can only estimate what his income is going to be which we have guessed at around £200/£200 pw.

Would this affect my tax credits as they use last years income to work them out?

I read on the website that you have to tell them what your profit for the year was but as he's only just starting we won't know that for a while.

Anyone in a similar position?

Any help/advice appreciated. Thanks

scatz

My wife is self-employed and we provided potential earnings to Inland Revenue for Tax Credit purposes. They would then request actual amounts at the end of the year to work out any under/overpayments.

It might actually be best to provide actual figures to them when your OH has at least three months worth of accounts. These figures would obviously be more relevant to his true earnings and may stop any need for large repayments at the end of the year.

Anniek1969

Thanks, I think I'll wait till he's been working a few weeks and then I'll be able to give them an average figure of what he's earned over that time. Just don't want to underestimate it and end up with a big repayment the following year.

AGB863

Just a bit of information - but if your partner is working and if your self employment / buisiness makes a loss, you can reduce your partners income by the amount of money tht is the loss figure.

ie if your partner earns £17,000 and the business shows a financial loss of £1,000 you can declare to IR that your combined income is £16,000.

Quite often on the forms if you ring up IR they inform you to put zero in the self employment figure if there is a loss - but this is not correct.

DazzerG

AGB863 wrote:

Quite often on the forms if you ring up IR they inform you to put zero in the self employment figure if there is a loss - but this is not correct.

Actually, that is correct.

As the TC form(s) advise you, you need to put a zero in the Self Emp box, and then deduct the loss from any Employed figure (as in your example).