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It is possible to claim Working Tax Credit when you are self employed, and your claim will be dealt with based on your income.

If you are self employed, either in a partnership or as a sole trader, your income will be the profit made on your business. The income is the profit you have made during a tax year, which runs from 6th April one year to 5th April the next.

If you have completed a self assessment tax return form for the previous tax year, use the profit figure from the tax return for the Tax Credit Office. If you have only just become self employed you will have to give an estimate of your profit. This is the amount you have made after deducting expenses from gross income. If you have more than one business, you must add up the total of the profit from all businesses. Your income will also include profit from outside of the UK, which must be declared.

When you have the profit figure for your business you can take off any deductions which will include gross payments paid into a personal pension, any trading losses moved forward from a past year for the same business and also deduct the gross amount of any Gift Aid payments. After deducting these figures you will be left with your total income figure which should be entered on the Working Tax Credit claim form.

If you have only just started self employment and have no actual figures, you will have to estimate income. However, when you provide details of actual income received the tax credit received may be adjusted to reflect the true income figure.

About The Author

Kara Copple

An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

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