Tax credits / self employment help please

lauralausmith

Hi Everyone
Looking for some advice please.
My Husband works 30 hours a week and we have two sons one of whom starts his early years entitlement at pre school this Sept.
We are currently in receipt of work and child tax credits.
I have recently done some training and would like to become self employed. Only problem is that some months I have one client a week which is approx 6 hoursbut then some weeks i have no clients and can go a full month without earning . On a good month i can earn £400. How will this affect our tax credits and what do i do on the weeks i am not earning. I am clueless so any help would be greatly appreciated. Is it worth me pursuing this or shall i just stay unemployed?
Thanks Laura

GoodExample

Ok, so have you already begun your self employment? Is this how you know that it is not regular income/hours?

I would advise, to take an estimate, so for example, if in the past 8 weeks, you have had "one good month" and earnt £400, and worked for 4 weeks at 6 hours per week, totalling 24 hours, then average this out, so 24hrs divided by 8 weeks = 3hrs per week average, an the the income, at 400 divided by 8 weeks - £50 per week.
You will be asked to provide a current year estimated earnings for your self employment - remember - if you underestimate your earnings you may be overpaid and this overpayment would have to be paid back. If you started your self employment part way through the year then work out how many weeks there are from the date you started, to the end of the tax year (05/04/2013) and times your weekly average by this, which will give you your current year estimate for your new self employment. Add this to any other earnings for yourself from 06/04/2012, to give your full year estimated income.
If you have several good months, then DO keep tax credits informed of fluctuations in your income, the last thing you want at the end of the tax year is to learn that you have been oerpaid and have to pay back!
Go for it with your self employment, Nothing ventured....nothing gained Best of luck.

zagfles

Also don't worry too much as there's a £10k disregard for income increases from one year to the next, so if your income goes up by less than £10,000 your tax credits won't be affected till next April.

Also, assuming you're not claiming for childcare, your hours don't matter for WTC as your husband is already working 30 hours.

lauralausmith

Hello. Thank you very much for the information. Its made it all a lot clearer. I was really worried that we would end up worse off in way of tax credits but if I have understood correctly we could actually be entitled to more tax credits? I will be registering as self employed tomorrow which I am really looking forward too.
Thanks again, Laura