Universal Credit (UC) will replace Working and Child tax credits (and many other benefits ) from late 2013 onwards.
If you have clients who make tax credits claims, you should be concerned about the draft UC regulations as the system is changing drastically for self-employed clients.
For example, under to claim under the new UC system the self employed person will have to :
- report (online presumably) business related income and outgoings within 7 days of the end of each month (the month starts with the first day of the UC claim)
- use a cash-based accounting which has very different rules to the HMRC tax system
- get no relief for losses under UC
- get no relief for purchase of a car under UC
- accurately determine the start date for their business
- only permitted to claim relief for starting a business once in their lifetime
It goes on...
As the legislation is in the form of regulations, not primary law, there is no formal consultation but there is a call for evidence by 27 July 2012 here:
http://ssac.independent.gov.uk/pdf/universal-credit-regs-call-for-evidence.pdf
Here are the links to the regs:
http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-act-2012/welfare-reform-draft-regulations
also explanatory notes here:
http://www.dwp.gov.uk/docs/uc-draft-regs-2012-memorandum.pdf
In my view these UC regs are are going to discriminate against the self employed and create a large and unnecessary computer system in parallel the HMRC system to cope with the reporting requirements for UC, and duplicate the admin required by self employed claimants.
What do you think?
Replies (1)
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Bonkers
Plan A - ignore the daft rules and just post credible monthly numbers, each month slightly different. The database will be swamped, the odds on Plan A being rumbled are very long.
Plan B - if Plan A gets rumbled, fight like hell and raise formal Complaints if necessary.
This Government are just as daft as Brown, Primarolo et al were when it comes to tax administration.
Monthly reporting when the system currently can't properly cope with annual reporting. Oh and whilst we're at it let's increase HMRC's tax take target whilst axeing 10,000 staff.
Nuts! Nearly as Cloud Cuckoo Land as the Euro tribe!