New to contracting and would like to know what you should base estimated income on for Tax Credits purposes? I am using a Ltd company set up. Is it salary plus dividends? Net profit of the company? Any help welcome
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Contracting: more of the money, less of the sh1t -
Short answer - yes, include dividends, and these should include the dividend tax credit (which is a completely different type of tax credit, not a benefit - you really *need* to understand this one or you'll be out on lots of calculations, so do what ever you need to in order to get that clear in your own mind)
Also, don't forget that the disregard for in-year increases in income over the estimate for CTC/WTC purposes has reduced to £10k this year from £25k last year.
This is the first year in over a decade I've not received any tax credits at all - I have four kids but contracting has trebled my income :-)Comment
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