Self Employed Income (Introduction)
Where income needs to be taken into account in the calculation of a tax credit award, claimants supply details of income from the following sources, each of which is taken into account. These are
- Employment income
- Self employment income
- Social Security Benefit income
- Miscellaneous income
And the following that are collectively known as other income
- Pension income
- Investment income
- Property income
- Student income
- Foreign income
- Notional income
This section of the Manual only gives guidance on self employed income. For guidance on the other income types see
Note: Guidance on when income needs to be taken into account in the calculation of a tax credit award and the period(s) over which it needs to be measured for any particular award, are covered in Calculation Of An Award
A claimant’s statement of self employment should be accepted unless there is reason to doubt it.
The claimant must meet the conditions of entitlement to Working Tax Credit (WTC) as set out in Regulation 4 of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002.
A self employed earner is a person who
- Is gainfully employed in Great Britain or Northern Ireland otherwise than as an employed earner, whether or not other employment is undertaken as an employed earner
- Enters into a contract to provide services for a client or customer as a sole trader or in partnership with others
- Is responsible to the full extent of their assets for the debts of the business
- Is entitled to all the profits of the business if a sole trader, or the agreed share of profits, if in a partnership
- Is subject to taxation under Income Tax (Trading and Other Income) Act 2005 ITTOIA) 2005
