April 3rd, 2013

3 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.

For more information contact us here

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Universal tax credit


John manages a wide portfolio of owner managed businesses and oversees the smooth operation of the firm’s payroll department.

After obtaining his degree in mathematics from the University of Liverpool, John joined Jonathan Ford & Co in 2004 and qualified as a chartered accountant four years later. John likes to keep abreast of developments in tax and accounting and is responsible for the mentoring of junior staff.

Outside of work, John enjoys powerlifting and is a Liverpool FC season ticket holder.

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