Net Income or Taxable Income

[pshbrittany]

Hello,

For the financial requirement for a self-employed sole trader, will that be determined by net income or taxable income?

My sponsor is working in Japan, which has a basic deduction that all taxpayers are eligible for. We subtract that basic deduction from the net income to get his taxable income. Should we be excluding that basic deduction when we determine if he meets the financial requirements for the visa?

I'm unsure because in FM 1.7, it mentions "the income will be the gross taxable profits from their share of the business in the relevant financial year(s), not including any deductable allowances, expenses or liabilities which may be applied to the gross taxable profits to establish the final tax liability."

[Casa]

Hello,

For the financial requirement for a self-employed sole trader, will that be determined by net income or taxable income?

My sponsor is working in Japan, which has a basic deduction that all taxpayers are eligible for. We subtract that basic deduction from the net income to get his taxable income. Should we be excluding that basic deduction when we determine if he meets the financial requirements for the visa?

I'm unsure because in FM 1.7, it mentions "the income will be the gross taxable profits from their share of the business in the relevant financial year(s), not including any deductable allowances, expenses or liabilities which may be applied to the gross taxable profits to establish the final tax liability."

It's net income....earnings after allowable business expenses have been deducted.

Are you applying with overseas earnings, the equivalent of £18,600 p.a for the 12 month period prior to submitting the settlement visa application AND a confirmed job offer in the UK for your sponsor to start within 3 months of arrival, again meeting the £18,600 p.a minimum earnings level

[pshbrittany]

It's net income....earnings after allowable business expenses have been deducted.

Are you applying with overseas earnings, the equivalent of £18,600 p.a for the 12 month period prior to submitting the settlement visa application AND a confirmed job offer in the UK for your sponsor to start within 3 months of arrival, again meeting the £18,600 p.a minimum earnings level

Thanks for your reply!

Yes, my sponsor will be returning to the UK with a job offer which meets the requirements.

So you're saying we don't have to consider the basic deduction? I'm confused because FM1.7 mentions gross taxable profits. On my sponsor's tax return, his net income meets the requirements, but his taxable income does not since a basic deduction is made.