What figure to use as self emplyed

[mattley23]

Hi all,

Im ma sole trader and have to put in my figures for tax credits and am a bit confused about what figure to use.

They have asked for my profit figure, but is this:

- Amount left once all business purchases, insurances etc and my wages have been taken off

- Amount left once business purchases, insurances etc have been taken off but including the amount I paid myself for wages

Typically the Tax Credits office have been very unhelpful and wont confirm anything saying I should know what figure to give them!

Thanks in advance

 

[ITsoldUK]

Simple as a sole trader in my opinion so hope this helps...

ALL your business income added together is FIG A
ALL your allowable business expenses, costs and overheads added together is FIG B

A - B = Profit/(loss)



You do not have wages as such trading as a sole trader just profit/loss...so, in direct answer it is option 1 WITHOUT any wage deductions as they do not exist.

 

[Scalloway]

Hi all,

Amount left once business purchases, insurances etc have been taken off but including the amount I paid myself for wages

is the figure to use. As a sole trader your wages are not really wages - you are merely taking your own money out of the business.

 

[ITsoldUK]

is the figure to use. As a sole trader your wages are not really wages - you are merely taking your own money out of the business.

Nope, you CANNOT remove this money from the books, it has to be in there and forms part of the profit in my experience.

 

[mattley23]

So bascially I take my yearly turnover, minuis figures for business expenses (materials, it equipment, tools, insurances, employee wages etc) and the figure left is what I should use for Tax Credits?

This is what I thought it should be but wanted to get it right before giving in the figure as id hate to be over or under payed.

 

[Scalloway]

Yes that is correct.