Employees will be able to base both their initial and final
figures on the P60 they receive from their employers. Self-employed
claimants will use the figure of income on the relevant SA return.
The time scales will normally be different for the employed and
self-employed, because of the longer time allowed to make a return
of business profits.
For example, the amount of tax credits to which an employed
claimant is entitled for 2005/6 is based initially on their income
for 2004/5. Most employed claimants will be able to supply the
actual figure of income when we ask them to do so in July 2006.
A self-employed claimant would base their initial 2005/6
claim on the return for 2003/4, due to be filed by 31/01/2005.
There will usually be a longer interval before the amount of the
award can be finally determined, as the return which includes
income for 2005/6 will not become due until 31/01/2007.
As Example 6 shows, awards to self-employed claimants will
generally take six months longer than those of the employed to
finalise.
Nick, a self-employed chauffeur, has been claiming tax credits since April 2003. His 2005/6 claim (based on his estimate of his income for 2004/05 -PY, which he provided by 06/07/2005) cannot be finalised until 31/01/2007. He will be asked to provide an estimate of his 2005/06 income by 06/07/2006 and to correct it, if necessary, by 31/07/2007. At this date he should have filed his 2005/06 SA return (filing date 31/01/2007) so he will be able to use the figure of income on the return to finalise his NTC award.
