Calculating Trading Income (Info)

Self-employed income for the purpose of calculating entitlement to tax credits will be the taxable profit for the year from

• The persons work in their trade, profession, or vocation

Or

• Their partnership share of net profit if the person is a partner in a trade, profession or vocation

For tax credit purposes, ‘taxable profit’ has the same meaning as it has in ITTIOA 2005. That is the amount after the deduction of business expenses

Contributions or premiums paid by the self-employed earner toward the purchase of a retirement annuity or personal pension are deducted from the taxable profit when calculating entitlement to Working Tax Credit

Any self employed income from overseas must be included for tax credit purposes in the same was as self employed income received in the UK