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Tax credits and self-employment

November 29, 2015


This post will try and untangle various threads related to Tax Credits and low income self-employed, particularly around the qualifying remunerative work test, profitability, and hours worked.

Tax Credits  rules for the self-employed changed in April 2015.  The main difference between the previous regime for self-employed Tax Credits and the new regime appears to be the added emphasis on potential for profitability. In the past, the relevant question in regard to low income was whether the claimant was working in expectation of payment.

Three and a half years ago I was giving workshops  about Universal Credit and the imminent demise of Tax Credits for the self-employed. However, at the time of writing in November 2015, Universal Credit is still not ready to take claims from self-employed people. (Scroll down for more details). 

The new self-employment test in Working Tax Credit may be a  tacit acknowledgement of the Universal…

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