The tax credits claim requires you to complete the form with your income which will be used for the tax evaluation. Taxable income is the result of withdrawing your allowable deductions from your assessable income. You should be aware there are notable exceptions to the general rule. The gross amount of your income is taken into consideration. This is the amount before National Insurance contributions and tax have been taken off. If you direct your earnings towards buying shares in your employer’s company under a Share Incentive Plan (SIP), then your gross pay is adjusted to include value of those contributions.

Tax credits are applied to the following types of income: salary and wages, meaning any income you get from your employer along with gratuities, SSP, bonuses, commission, profit-related pay, tips, holiday pay and other benefits granted by the employer. Other types of taxable income are rental income from property, foreign income, from investments or property abroad, taxable social security benefits, taxable profits from self-employment, the dependant's grant paid to students with a spouse or unmarried partner or a dependant adult, state retirement pensions, occupational or personal pensions.

Bok royalties, eBay sales, consulting work, tips, free lance work, side jobs, and all other sources of earned income also fall under taxable income. You might have expenses that will offser your taxable income, so your actual portion of your income which will be taxed can be lower. An experienced accountant who keeps up to date with the latest tax law can help ensure that you pay only the taxes owed, and that you don't miss out on any deductions you are entitled to.