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Could any anyone advice me on which figure shall i use from self employment to count towards my earnings. Gross or net? My total income from self employment is 3000GBP, after deducting expenditure it comes down to 2500 GBP. Shall I add 3000 or 25000 as my earning?
Any response much appreciated.

Gross

Many thanks. So my total earnings equals sum of gross fulltime earnings plus gorss self employment earnings.

Yes, that's correct.

Always consider total pay i.e., gross pay!

seepsaba wrote:Could any anyone advice me on which figure shall i use from self employment to count towards my earnings. Gross or net? My total income from self employment is 3000GBP, after deducting expenditure it comes down to 2500 GBP. Shall I add 3000 or 25000 as my earning?
Any response much appreciated.

If £500.00 is expenditure to earn £3000.00. This means you have earned £2500.00 which is taxable. In my opniion it should be £2500.00 that you should add to your employment earnings. Previous earnings has to be taxable earnings.

In other words it has to be net profit for self employment. I don't know if you have to pay VAT on your self employment earnings. If yes then you should deduct VAT from your self employment earnings as well.

I don't have to pay any VAT as its just a small amount. I'm only short of about 900GBP and have taken this self employment to cover this loss.
Not sure why the rule would be different for full time and self employment. If I'm counting my gross salary towards total earnings then it should be the gross self-employed income as well. Does that make sense?

seepsaba wrote:I don't have to pay any VAT as its just a small amount. I'm only short of about 900GBP and have taken this self employment to cover this loss.
Not sure why the rule would be different for full time and self employment. If I'm counting my gross salary towards total earnings then it should be the gross self-employed income as well. Does that make sense?

Rule is same. When you say Gross Income (it means income before tax).

So in your case £3000.00 is turnover(not gross income) of the business.
£500 is expenditure of the business.
so that leaves £2500.00 as net profit (or Gross Income) before any tax.

So it definitely should be your gross salary from employment + £2500.00.

If in a doubt, go to an accountant for a minimal fee they'll sort this out for you. And it'll look more professional. Get a letter from accountant as well. You will need to show invoices for the turnover of the business.

You can actually call HMRC helpline they'll clarify everything for you.
I hope that you are registered for self employment. Because UKBA might ask for details as to when you registered for self employment and any proof of class2 NIC's.

Many thnaks for your detailed response. I'm registered with HMRC and have accountant's letter and reports etc. so that's not a problem, am only stuck with calculating this figure. Just to make sure I added everything right here is a summary of my total earnings, please advise me if this is workedout correct, I need 32000GBP to earn 35 points.

Salary from fulltime employment
31097.00

Self employment
Total income per the accounts 2498.00
Expenditure i.e., accountancy +professional fees , 252+204 =456

Profit from self employment after deducting expenditure,
i.e., (2498-456) = 2042

So the earnings to be claimed should total 31097.00 + 2042= 33139 and NOT 31097.00 + 2498= 33595 + Does that make sense?

seepsaba wrote:So the earnings to be claimed should total 31097.00 + 2042= 33139

Yes, that's right.

seepsaba wrote:I'm registered with HMRC and have accountant's letter and reports etc. so that's not a problem, am only stuck with calculating this figure.

your new calculation makes sense.
But now i'm a bit confused when you've an accountant, didn't you ask him to give you a letter for your gross income for the year.

@ leo_sangha
He gave me every thing related to self employment, not full time employment.
Many thanks for confirming this for me