A tax credit guide for self-employed parents - Contact a Family

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IntroductionThe rules for getting tax credits are very complicated, perhapsmore so if you are a parent of a disabled child. And certainlyif you or your partner happen to be self-employed.This guide explains everything you need to know aboutclaiming tax credits generally and some particular issuesself-employed parents may need to be aware of. Tax creditsinteract with benefits for families on a low income, and youcan find out more about this towards the end of the guide.For individual advice, ring our freephone helpline and we willarrange for a specialist adviser to talk to you.ContentsWhat are tax credits?.......................................................................................... 3Who is included in my claim?........................................................................ 4Can I claim Working Tax Credit?.................................................................... 4Extra money in Working Tax Credit for childcare costs......................... 5Can I claim Child Tax Credit?.......................................................................... 7How are tax credits paid?................................................................................. 7Calculating my tax credit award..................................................................... 7How income affects a tax credits award.................................................... 8How do I calculate my annual income for tax credit purposes? ...... 9Accounting periods and assessing taxable profits for tax credits....10How do I work out my taxable profits? ...................................................11Trading loss.........................................................................................................11What income is ignored?...............................................................................11How much tax credit will I get?...................................................................12Using the tables to calculate your award.................................................12How do I claim tax credits?...........................................................................17At the end of the tax year..............................................................................17What if my circumstances change during the tax year?.....................18What happens if I have been overpaid tax credits?.............................20Tax credits and other help for families on low incomes....................212A tax credit guide for self-employed parents
Information in this guideThe information in this guide is based on the rules for claiming tax credits forself employed people for the tax year 2012/2013.What are tax credits?Many self-employed people are ableto claim extra financial help in the formof tax credits. There are two tax creditsoffering financial support for families –Working Tax Credit and Child Tax Credit.Working Tax Credit can be claimed byanyone who is responsible for a child andwho works (including self-employment)for a minimum number of hours a week.Certain other self-employed people whodon’t have children can also apply.Child Tax Credit can be claimed byfamilies with children regardless ofwhether you work or not.If you would like a full breakdownof your likely entitlement, or requireany further information on tax credits,please call our freephone helpline.From October 2013, tax credits willbegin to be replaced by the UniversalCredit, a new means tested benefit forworking age people. No new claims fortax credits will be accepted from 6 April2014 and existing tax credit claimantswill be moved onto the UniversalCredit between 2014 and 2017. Callour freephone helpline on0808 808 3555 for information aboutthe introduction of the Universal Credit.These credits are administered by HerMajesty’s Revenue and Customs (referredto here as the Revenue) and, dependingon your circumstances, it is possible toqualify for either or both. Although taxcredits are income based you should notassume that you have too much moneyto qualify.This publication is intended as a generalguide for families who are looking aftera child with a disability where a parentis self-employed. It includes readyreckonertables to give you an indicationof how much tax credit a family in yourcircumstances should receive.Freephone helpline: 0808 808 3555www.cafamily.org.ukA tax credit guide for self-employed parents 3
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Page 17 and 18: How do I claimtax credits?Child Tax
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