self-employed business + part-time employment = complicated!

Radiojunkie

I have a question to do with claiming benefits:

I am currently self-employed struggling with a small business. I do not draw any money from the business for personal use - it all goes back in to running the business and remains in the business account.

In addition, I have a small part-time employed job that pays for living costs, personal things etc. The income for this is fixed, apart from any extra paid from overtime hours. This goes into my current account and is treated as "normal" income.

With regard to applying for income support/housing benefit etc, what income figure do I put on the forms? Looking at "income" from the business front, this jumps up and down like a yo yo, but it is not used as personal income, only for the costs of the business. Do I need to declare this? If I do, how do I go about filling out the forms. What about including all the necessary business expenses? What is counted and what is not? Or can I just state my employed income?

There must be lots of people in my position, any help will be most gratefully received.

red_bertie

Just giving you a bump -if you don't get an answer on this board, try posting on "Cutting Tax" or "Small Biz and Charities" board.

RB

old_boy_57

I'm in a similar position but I don't have another part time job, just self employed. I believe all self employed income is treated as your income unless you actually spend it on your business. Imagine if you were earning £70,000 per year but said that you did not touch it, you kept it in your business bank account as part of the business. Do you think you would still get WTC?

red_bertie

Self-employed or business income - costs of sales = taxable "profit".

Cost of sales is anything you have to buy in order to assemble/make what you sell.

If you charge VAT, you can claim VAT back from HMRC.

Income is income of any sort. You have to pay tax on it.

You are also allowed certain deductions, but I'm no expert - I am a small business owner and I have to use an accountant who knows about these things. But if you go to HMRC website or any small business website you will get a better idea. HTH.

RB

Conor_3

OK its like this...

You have the profit from your business plus the income from your part time job.

IF YOUR BUSINESS IS TRADING AT A LOSS, you deduct the loss from the part time job.

Now I assume you're running it as a sole trader. In that case, despite the money being in the business account, until you actually spend the money, its counted as profit. The money being in the business account is completely irrelevent. If you're running as a Ltd company, your wages and any share dividend from the company are counted as your income.

I take it you are doing accounts and know what the status of the business is in? If not, you're gonna need to as you'll need to submit accounts every few months to the HB.

In regards to IS, I can't understand why you're claiming that as surely you should be claiming WTC, claiming for fulltime hours (as you do over 32 in total between PT and SE) and giving them the figure for your PT annual earnings +/- any figure for SE.

Another thing that worries me is that you appear to have absolutely no grasp of basic bookeeping which leads me on to ask you if you've registered as SE with HMRC?