Tax Credit Changes For New Claimants
HM Revenue & Customs have announced changes to working tax credits for new claimants who are self-employed, with effect from 6 April 2015.
If you are self-employed and claiming tax credits for the first time, you will now have to meet a qualifying remunerative work test. The test will need to show that you are trading commercially and that your business is carried on with a view to achieving profits. This relates to working tax credit only and will not affect any claim for child tax credit.
The test will be based on working hours and the national minimum wage. HMRC are likely to request receipts for expenses and records of sales and purchases. They may also ask for supporting documents such as a business plan, planned work, cash flow and profit projections.
For more information contact Green & Co.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.