Universal Credit a burden for small business

According to the government the Universal Credit will simplify the current system of Department for Work and Pensions payments to unemployed people and low-income earners. It consists of a standard allowance and five other potential elements, which are:

• Housing element.
• Child/disabled child additions.
• Childcare element.
• Carer’s element.
• Limited capability for work element.

Claimants will file their claims online to HMRC. In return they will receive automatically calculated and delivered payments that are adjusted in line with their earnings on a month-by-month basis. However, the draft regulations require self-employed people to report their income to HMRC differently from employees and small
businesses. As it stands, if you are in business for yourself, you will need to submit an additional online report on a monthly basis. Your benefit payments will be suspended if you don’t claim your Universal Credit within seven days of filing this. The concern is that this timeframe is too tight given the inherent pressures many self-employed people are under. Please call us for further information