Hello,
My client is a low earner who rents a business property for acupuncture and other therapies. She is exempt from business rates. Normally her profit after expenses and rent is about £6000.
She has received coronavirus business grants from the council, because she pays rent, which are to cover the periods of lockdown, when the property was closed.
Her income has gone up in 2020/2021 because of the business grants, but this won't be repeated next year. Where is this type of income reported in the tax credit claim? My client has received a tax credit reminder, where she is just being asked to check details. Are the grants to be counted as just self-employment income for the year? And more importantly will they affect the tax credit calculation for the coming year?
I know this is a situation peculiar to the pandemic. I am worried about a large overpayment of tax credits, though funds have been saved to cover this, and I'm also worried about a removal of future tax credits altogether.
Any advice would be appreciated. Thank you.
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