Tax Credits: what's the definition of "Profit" for self employed

tc1992

I am renewing my tax credits, i just want to check the exact definition of "Profit" that it asking me for. I pay myself a wage, and made a little (what i would define as) profit.

I take it the Profit they are asking for would be: wage + my little profit
if that makes sense. I suppose basically Income minus Outcome

thanks for any help

Pennywise

It's the same figure as you declare on your self assessment tax return. In it's simplest of terms, business income less business expenses. That "may" equate to your wages+profit.

Oakdene

It will consist of your wage (drawings) & your bottom line profit that you declare on your SA form.

Pennywise

Oakdene wrote: »

It will consist of your wage (drawings) & your bottom line profit that you declare on your SA form.

Your drawings don't go anywhere near your SA form - they aren't a deduction for neither tax nor tax credit purposes.

antrobus

To avoid any doubt;

Tax credits: working out income
https://www.gov.uk/guidance/tax-credits-working-out-income

Self-employed people

Your profit is what you gave on your Self Assessment tax return for the last tax year....If you haven’t filled in your tax return, you’ll need to estimate your profit.

tc1992

sorry for late reply, thanks for replies. maybe i better talk to them direct. i am just doing self assesment now, so can re-familiarise myself with the process and the exact definition of "profit". Can give them an estimate for the time being

double-slit

Yes my daughter works for a company as self employee and yes you are right wording is not easy to understand because she does not make a "profit" but has a regular income.
As Pennywise has replied above,

profit is is income minus your expenses.

tc1992

ok thanksyou double-slit

UKSBD

Also bear in mind that they expect your profit to be as much as someone on minimum wage.


If you don't have any children and your average monthly profit is less than £975 they may want to see your business records and evidence that you are promoting/advertising your business.