Can anyone tell me if I've got this wrong.. I've spoken to numerous operators at Ctax advice centres including team leaders who all state that the direction they have for business losses for self employed people is to enter a nil income although I've tried to argue that where a person is both self employed and employed paye the business losses should be offset. I've looked in cpag handbook page 1307 and this seems to back me up and refers to Reg 3 (1) step 4 TC(DCI) Regs.. but I'm still coming up against a brick wall as they state that the direction they have been given is business losses are nil.

Whose right?? any comments

Thanks mark

The section of the TC Technical manual, from our CD-Rom, dealing with calculation of income (the last sentence is the relevant bit) says:

"The manner in which income of a claimant or, in the case of a joint claim, the aggregate income of the claimants, is to be calculated for a tax year for the purposes of Part 1 of the Act is as follows.

Step One

Calculate and then add together

n the pension income (as defined in regulation 5(1))

n the investment income (as defined in regulation 10),

n the property income (as defined in regulation 11),

n the foreign income (as defined in regulation 12) and

n the notional income (as defined in regulation 13)

of the claimant, or, in the case of a joint claim, of the claimants.

If the resulting total amount of step one is £300 or less, it is treated as nil.

If the resulting total amount of step one is more than £300, only the excess is taken into account in the following steps.

Step Two

Calculate and then add together

n the employment income (as defined in regulation 4),

n the social security income (as defined in regulation 7),

n the student income (as defined in regulation 8) and

n the miscellaneous income (as defined in regulation 18)

of the claimant, or in the case of a joint claim, of the claimants.

Step Three

Add together the resulting total amounts of Steps One and Two.

Step Four

Calculate the trading income (as defined in regulation 6) of the claimant, or in the case of a joint claim, of the claimants.

Add the resulting total amount of this step to the total amount produced by Step Three,unless there has been a trading loss in the year.

If there has been a trading loss in the year, subtract the amount of that loss from the total amount of Step Three."

Thanks for the TC tech Manual quote, I've managed to get one tax credit operator to adjust the claim. I've passed this issue on to CPAG who are taking this up with Tax Credit Managers. Obviously the directions that the teams have do not comply with the info you supplied which is in line with the regs.

Thanks again it resulted in a further award of about £650

Mark