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Self-employed earnings within a business or company structure:
If an applicant has worked in a self-employed capacity in his/her own business or company structure and has chosen to keep his/her earnings within the business or company, he/she could provide:
• business or company accounts that meet statutory requirements and show the net profit made for the earnings period claimed; and • personal/business bank statements.

If the applicant’s accounts and bank statements only show the gross amount of profit for the business he/she should also provide a third piece of evidence showing the net profit of the business for the period claimed, for example a tax return or an accountant’s letter. This is because we can only consider the net profit of the business for the applicant’s income. If the applicant is not the sole shareholder of the company he/she should also provide:
a letter from his/her accountant confirming his/her shareholding and the proportion of net profit before tax to which he/she is entitled for the earnings period claimed
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After reading above statement about earing I have very serious doubt. Please help..
1. As a self employed as per HO. what is earning for points
for example payement recieve from client £10000.00 in perosnl bank , expenses £1000.00.
Gross profit -10000-1000=£9000
Net profit=9000 - income tax=7200 approx (say20%)
Please confirm any senior/exp member which one earning is applicable for Tier1 earning as per home office. £9000 or £7200

Earnings taking into consideration is net earning, you earn 5 points for earning between 25,000 -29,999.99. You cannot earn any point for earning under 25,000.

You will need a Registered chartered accountant to provide reports confirming your earnings.

sorry,these are for example only....

thats means earning after tax in case of self employee solerader?

mrite123 wrote: thats means earning after tax in case of self employee solerader?

The income are always the profit BEFORE tax.

The simple equation would be EARNINGS minus EXPENSES=PROFIT

This profit is your declared income for claiming the points. Obviously the accountant letter, managed accounts, invoices, contracts and bank statements will be attached as supporting documents to prove this income.

Thanks zahid.ali.anwar.

I was bit confuse with above policy guidence"This is because we can only consider the net profit of the business for the applicant’s income.

This has me confused too.
Sometimes the definition of NET PROFIT is profit AFTER text, sometimes before tax.

I can't find notes in the guidelines stating that for self employed, earnings = gross profit minus expenses only (and not including taxes).

I've searched on the forum and can't find any answers with reference to quotes from guidelines so I'm sorry if this has been asked several times but does anyone have reference to a quote from the guidelines which states that net profit is before tax reduction?

Your help is much appreciated.

INCOME minus EXPENSES= NET PROFIT BEFORE TAX minus TAX =NET PROFIT AFTER TAX

zahid.ali.anwar wrote:

mrite123 wrote: thats means earning after tax in case of self employee solerader?

The income are always the profit BEFORE tax.

The simple equation would be EARNINGS minus EXPENSES=PROFIT

This profit is your declared income for claiming the points. Obviously the accountant letter, managed accounts, invoices, contracts and bank statements will be attached as supporting documents to prove this income.

I believe this is the right answer.Always profits are counted before tax.
Londener

Again net Profit is calculated after tax but here in case of UKBA , it is before tax.
Please correct me seniors if I am wrong.
Londener

Kevin24 wrote:INCOME minus EXPENSES= NET PROFIT BEFORE TAX minus TAX =NET PROFIT AFTER TAX

Sorry but this makes it even more confusing...

Which do I need to claim for ILR as Self-employed?
Before or after tax?

The guidelines say that for salaried applicants it's earnings before tax, but doesn't seem to explicitly state the same for self-employed.