self employed - Tax credits(7 Posts)
Lots of questions lol We get child tax credit and my DP gets working tax credit as he works.
Been off work a while having children (have three so been a while) Im in the process of setting up a business and i was wondering where i stand on tax credits?
I know i have to let them know about changes but when? As soon as im earning or right now?
Also with me not earning anything right now would i have to give predicted earnings for this year or tell them at the end of the year? I dont want to be paying huge amounts back (not that i probs will be making loads in my first year)
When im earning a bit more would i be entitled to childcare help with my youngest? How does that work if you are self employed? Shes driving me round the twist now and i havnt started properly yet lol
Thanks in advance to anyone who can help xx
You do need to notify HMRC as soon as possible after becoming self-employed, though this is nothing to do with tax credits (it's for the sake of tax self-assessments, paying your NI contributions etc.). It's very straightforward to do - you just need to fill out a form!
You might find this helpful.
Regarding tax credits, it's just the same as if you are employed - you tell them how many hours you are working and what your earnings (or projected earnings) are. You confirm your exact earnings when you get your renewal pack. You are as entitled to help with childcare as you would be if you were working the same hours / earning the same amount as an employee.
Hope that helps a bit!
Thank you, thats what i thought i had to do Just a bit worried about the % id get towards childcare and how much it will go down by as soon as i start earing. Been trawling the net but can find anything just 70% upto the thresh hold but doesnt say how much it goes down by after that
Know how to reg as self employed as ive been self employed before i had my 2 youngest just tax credits is confusing lol
Try this! It's an online calculator for working out what you're entitled to in terms of tax credits, council tax benefit etc.
You can try it with different income amounts and see how your tax credits are affected
I called them today and they gave me a rough guide, still not much wiser so i tried the calculator. Doesnt give you exact figures for the year just the next few mths but it gave me an idea, thanks x
Did you go all the way through the calculator? When I do it, I get a table of results with the annual and weekly amounts I'm due for each thing (WTC, CTC etc.).
The business profits not your earnings is what they go on, so if your business was profitable say £25k but you only took a tiny drawing then then would say yr income was £25k so you'd be stuck for benefits, this happened to us! We had many years of making a loss but all of a sudden a huge profit. Which led to the problem of them wanting their money back. You have to make pretty good assuption of your upcoming years profit. Best if you over estimate at least you can get some money back the following year. You under estimate then you'll be expected to pay back or have that debt taking out of the following year. You must get your accountant to help you as you could do this wrong.
Once you start making a good profit then that will be your earnings. Once your combined earnings (including husbands) could reach a decent figure (not sure what this figure is - assume around £25k???) then as with being employed you'll get very little help including the childcare element.
My problem is that I work from home with DS2 and its hard. The last couple of years we received nothing so with my drawings I had to pay out nursery fees which killed us. We take a very sensible combined drawing from the business as we cant justify taking a big figure.
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