DH runs his own business and I am currently on Maternity leave from his business. We used to claim tax credits but stopped around 5/6 years ago due to being overpaid for a whole year and then having to repay it all back. This was because, due to the way your income if self-employed is worked out by using the previous year's accounts, if you make a higher profit you then have to repay your tax credits. By this point we weren't receiving very much and decided that it wasn't worth the agro to claim any longer, we'd rather know exactly what money was ours rather than worry about having to repay it in the future.
However, DH has just got his books back from the accountant for the past financial year and he has actually made a loss. We have 4dc's, the youngest is 5 months, so I'm wondering whether it is worth us making a new claim? How does it work though, they will obviously base our claim on this current set of accounts and pay us accordingly but will we have to pay it back next year if DH makes a profit from now on?
It's not easy for us to financially forecast what, if any, profit will be made this year. Our business has been lucky to survive the recession a lots of DHs client base hasn'tbeen so lucky and we have taken a huge hit.