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Gross or net income?

Hi,

My Dad is self employed and was wondering whether gross or net income applies to him? As a self-employed person, surely it would be unfair to use gross income when having to take into account business deductions, and the like, as he could potentially earn X amount of money but then in reality, 80% of this could actually go on business and not an income per se.

So, are self-employed people assessed on net or gross household income?

Reply 1

didsyboy

I would treat his earnings in the same way that one would for tax reasons. If money is earned but has to be placed back into the business then this effectively become the same as turn-over versus profit.

Therefore, he's gross earnings is not really an earning as it is taken up by business expenses. You should only mention. What profit he actually takes as this would be the same as profit cleared from a business.

Reply 2

balotelli12

He has to send them his tax return. It is gross, not after tax! LOL

(edited 11 years ago)

Reply 3

didsyboy

But his tax return should include all expenses also.

I suppose you are at the mercy of the University admin now.

Reply 4

balotelli12

Yes but his tax return will , after all allowances have been deducted leave a gross figure on which tax will be due. .It is this figure that SFE go off, not the after tax income.