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 ceased on 5 April 2025. New claims for tax credits are not possible. Existing claimants have migrated to the universal credit system. See HMRC guidance ‘Tax credits ended on 5 April 2025’ and 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 profits’ has

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+™
  • 27 Oct 2025 14:40

Popular Articles

Foreign tax relief

Foreign tax reliefIncome and gains may be taxable in more than one country. The UK has three ways of ensuring that the individual does not bear a double burden:1)treaty tax relief may reduce or eliminate the double tax2)if there is no treaty, the individual can claim ‘unilateral’ relief by deducting

14 Jul 2020 11:44 | Produced by Tolley Read more Read more

Corporate interest restriction ― administrative aspects

Corporate interest restriction ― administrative aspectsThe corporate interest restriction (CIR) regime has some specific administrative rules in addition to the general administrative requirements for corporation tax returns. This guidance note does not include commentary on provisions that are

14 Jul 2020 11:19 | Produced by Tolley Read more Read more

Tax implications of administration and liquidation

Tax implications of administration and liquidationThis guidance considers the tax implications of a company going into administration or liquidation.Introduction to company administration and liquidationCompany going into administrationA company which is in financial difficulty may go into

14 Jul 2020 15:29 | Produced by Tolley Read more Read more