Trading profits and losses and tax credits

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Trading profits and losses and tax credits

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

This guidance note looks at the how trading profits and losses are calculated for tax credit awards. Note that tax credits cease on 5 April 2025. New claims for tax credits are no longer possible and no more payments will be made after 5 April 2025. Any existing claimants will be migrated to the universal credit system. See the Universal credit guidance note. There is information about migration notice letters on GOV.UK.

Determining the profit or loss for tax credits

A claimant’s trading income is defined in the regulations as follows:

  1. the amount of his taxable profits for the tax year from:

    1. any trade carried on in the UK or elsewhere, and

    2. any profession or vocation the income from which does not fall under any other provisions of the tax credits regulations

  2. if the claimant is a partner in the trade, profession or vocation, his taxable profit for the year arising from his share of the partnership’s trading or professional income

SI 2002/2006, reg 6

‘Taxable

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 13 Jan 2025 11:21

Popular Articles

SEIS and EIS ― overview

SEIS and EIS ― overviewThe seed enterprise investment scheme (SEIS) and enterprise investment scheme (EIS) are very similar schemes which offer substantial tax incentives to investors in companies which qualify. The tax incentives for SEIS and EIS investments are intended to encourage investment in

14 Jul 2020 13:31 | Produced by Tolley Read more Read more

Class 4 national insurance contributions

Class 4 national insurance contributionsWhat is Class 4 NIC?Class 2 and Class 4 national insurance contributions (NIC) are paid by self-employed individuals and partners in a partnership on their profits arising within the UK. This guidance note considers Class 4 contributions. For Class 2

14 Jul 2020 11:13 | Produced by Tolley Read more Read more

Corrections and amendments to the IHT account

Corrections and amendments to the IHT accountThis guidance note explains how to deal with changes to the taxable values in the original inheritance tax account.Why do amendments arise?When the IHT account is first submitted to HMRC, it is based on information available at an early stage of the

14 Jul 2020 11:20 | Produced by Tolley Read more Read more