April 3rd, 20133 Universal Tax Credit shocks for the self employed
The introduction of Universal Credits, which are being phased in from April 2013, will see some huge changes for the self employed who are making claims.
In order to demonstrate a business is viable claimants must attend a ‘Gateway Interview’. Jokes about Dragons Den have already been cracked….
There will also be an assumption that the business earns a minimum of 35 hours at the National Minimum Wage – to encourage people to make a success of their business. For start-ups this won’t apply for 12 months.
The final big issue is that a claim showing income and expenditure on a cash basis must be made every month between 7 and 14 days from the end of the month – or benefits will stop. For many small businesses the prospect of reporting monthly accounts will simply be too much trouble. The cynical may say this is the intention. It is certainly a huge shift from reporting annual figures 10 months after the year end. Self employed folk will really need to be on top of their figures. We’d suggest an online booking system like Xero.
If you aren’t currently claiming Tax Credits it might be worth registering before 5 April 2013 to delay the point when Universal Credits will apply to you.
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