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My first tier 1 grant was on employment and self-employment, and then extension was on employment and hopefully ilr would be on employment as well.
However, reading recent posts regarding self employment earnings and thorough checks by Home Office, what sort of profit does HO look at:
Net profit or Net taxable profit?

Every where Homeoffice documents mention about Net Profit (they didnt mention net taxable profit) however I'm having sleepless nights as my Net profit has been used for claiming points (£10,300), but Net taxable profit is less due to use of allowance (net taxable profit is £7,500).

So am I in trouble that my Earnings shown in initial grant were 10300 and in Self-assessment, net profit is shown as 10,300 but allowances have been used and net taxable profit is £7500?

Please help/Advice...

Thanks

I am struggling to understand what net taxable profit is ? I have run limited company for 5 years and I have never seen this term. I think what matters is net profit which is calculated after paying all expenses and tax liabilities.

So you had a profit of 10500 but you declared 7500 to HMRC and adjusted the remaining amount as some sort of expenses ? What allowances are you talking about ?

Cut the story short !

Talk to your accountant and send the amendment for what you declared initially.

khan82 wrote:I am struggling to understand what net taxable profit is ? I have run limited company for 5 years and I have never seen this term. I think what matters is net profit which is calculated after paying all expenses and tax liabilities.

So you had a profit of 10500 but you declared 7500 to HMRC and adjusted the remaining amount as some sort of expenses ? What allowances are you talking about ?

Thanks Khan82,

see the form https://www.gov.uk/government/uploads/s ... f-2015.pdf

Net profit is number 47 and taxable profit is number 64. Both are different in my case.
Also, look at the self employment notes on HO https://www.gov.uk/government/uploads/s ... 4_2015.pdf

read articles 100 and 101. So this is all the confusion.

@akan, its 2010/11 tax year, I am a bit confused if its correct then should not change it, also not sure how long will they take it to address the change.

wwe1983 wrote:

khan82 wrote:I am struggling to understand what net taxable profit is ? I have run limited company for 5 years and I have never seen this term. I think what matters is net profit which is calculated after paying all expenses and tax liabilities.

So you had a profit of 10500 but you declared 7500 to HMRC and adjusted the remaining amount as some sort of expenses ? What allowances are you talking about ?

Thanks Khan82,

see the form https://www.gov.uk/government/uploads/s ... f-2015.pdf

Net profit is number 47 and taxable profit is number 64. Both are different in my case.
Also, look at the self employment notes on HO https://www.gov.uk/government/uploads/s ... 4_2015.pdf

read articles 100 and 101. So this is all the confusion.

@akan, its 2010/11 tax year, I am a bit confused if its correct then should not change it, also not sure how long will they take it to address the change.

Takes about 10-13 weeks currently, however the time will increase because end of year tax returns due by 31st October and 31st December. HMRC will do the amendment, make sure explain them clearly why you want to do it or if they are not satisfied with the explanation they may open an investigation into the matter which ofcourse no one wants.

Regards

Amending tax returns for 2010/11 will take 6 months atleast if corrections are minor.