working tax credit for the self employed

[Wrenn]

Hi there, looking for some advice about claiming working tax credit as a self employed person.

 

Is wtc based on income, or profit?

 

I was awarded wtc last year based on 2013-2014, which was my first year of self employment in which I made a loss.

 

This year so far I have made a (yes, I know, pathetic) £500 profit. Can I assume this is little enough not to have to notify HMRC? I'm not sure how it works as a self employed person, since income is unpredictable. At what point do you notify them if you think your income has risen from last year, given it may well go down again?

 

Secondly, I'm moving area next month and plan to get an additional part time job (since clearly self-employment isn't working too well!). Can someone confirm it's acceptable to be both employed and self employed whilst claiming WTC?

 

Apologies if these questions have already come up recently, I appreciate any insight you can offer.

 

thanks lots.

[blondebubbles]

Tax credits is initially based on age and working hours as well as childtrn, partner, disabilties etc.

 

As a self employed worker you must keep accurate records of the hours you work as this can be requested at anytime and is being done more frequently.

 

As for income it is your profit (before deduction of tax/NIC etc). You must notify all income to HMRC.

 

If you expect a change to your income you should report this as soon as possible. Any delay could lead to an overpayment so it is usually suggested that you over estimate.

 

You can have as many jobs as you wish. You will need to inform them of any changes and any additional income will be taken into account.

[honeybee13]

Thank you for replying, BB. I was hoping you would spot this.

 

HB

[Wrenn]

Hiya, thanks for responding.

 

It looks like this tax year I've made about £700 profit so far. Do you think I need to report this for Working Tax Credit purposes?

 

I thought you were allowed to earn up to £5000 more than the previous year before it would impact on your payments?

 

I don't know what the total will be yet either of course, I may not earn anything else this year, but will keep spending on loan repayments & other consistent outgoings.

 

Sorry, I know these are tiny amounts I'm dealing with, I don't exactly have an empire. I just want to do things right.

 

Thanks!

[blondebubbles]

As I said, you must notify all income to HMRC. This is regardless of whether or not it will impact your claim.

 

Your tax credit award advises you to report any change in income and you are sent a yearly renewal to confirm your income for the previous year. If you don't complete this then they will terminate your claim.

 

Not saying that to scare you, just simply how it works.

[Wrenn]

Oh gosh, yes, of course I did a tax return last year, and will do one again this year declaring all income. And I'll fill in the working tax credit renewal form when it arrives. I just meant if I need to tell them at this point that I've become aware I've currently earned more profit than last year (which might well change in the next four months anyway).

 

But it sounds as if you are saying I should call them and say what i've currently earned, so I will. Thank you.