UNIVERSAL CREDIT

SELF EMPLOYED INCOME

Didn't find your answer?

I have some self-employed clients who supply income and expenditure from their monthly figures to U. C. and they are then given U.C. on a monthly basis. In previous times Working tax credit was provided on the figures as stated by year end accounts - not so now.  What concerns me is that no check is made on the figures supplied - so my concern is that some self-employed taxpayers are getting more than entitled to and where are the checks?  I realize that that is not a taxation subject but as Accountants are we not responsible for ensuring that our clients are compliant and how do we check this?  Many thanks

Replies (7)

Please login or register to join the discussion.

avatar
By FactChecker
24th Jan 2024 16:47

".. they are then given U.C. on a monthly basis"
unless something has drastically changed within the core of UC, then payments are made on a weekly (not monthly) basis, every 4 weeks.
An important difference IF you are using the figures supplied to perform tax calcs!

Thanks (1)
Replying to FactChecker:
avatar
By legerman
25th Jan 2024 10:02

FactChecker wrote:

".. they are then given U.C. on a monthly basis"
unless something has drastically changed within the core of UC, then payments are made on a weekly (not monthly) basis, every 4 weeks.
An important difference IF you are using the figures supplied to perform tax calcs!

Universal credit is paid monthly, on the same date each month. The claimant provides their income and outgoings online and this is used to determine their award for the next payment.

Thanks (0)
Replying to legerman:
avatar
By FactChecker
25th Jan 2024 12:52

Apologies, you are quite right ... I was confusing (myself) with the exact opposite situation (where UC, being monthly, causes unhappy results for claimants who are employees being paid on a weekly/fortnightly/4-weekly basis).

Strictly speaking a claimant can elect to be paid 'fortnightly' but actually this just means 'twice per month' ... kudos to the clarity department!

I do understand OP's (private) concern regarding claims by the self-employed (which obviously contain more room for misreporting than employee pay), but this is a consequence of allowing UC claims by the S-E ... so is a policy, not an operational matter for OP.

Thanks (2)
avatar
By FactChecker
24th Jan 2024 17:00

"What concerns me is that no check is made on the figures supplied - so my concern is that some self-employed taxpayers are getting more than entitled to and where are the checks?"
+
".. as Accountants are we not responsible for ensuring that our clients are compliant?"

First, and foremost, why do you think that your professional relationship (accountant : client) strays beyond the bounds of whichever services you have agreed to provide?
What next - checking tyre depth on their car or height of their garden hedge?

FWIW the DWP have a lot of resources (software based as well as human) dedicated to checking the details of claims - including access to bank account figures and those from RTI for any part-time PAYE earnings, as well as loads of other 3rd-parties.

If you're asking whether it's impossible to make a fraudulent claim then the answer is No (cash-in-hand work being the most obvious weakness); but that has nothing to do with you in your professional capacity.
If you're asking what to do if you encounter proof (not suspicion) that a claim contains fraudulent information, then you (as a private individual) have whistle-blowing channels available; but that evidence better not have arisen in the course of your professional activities.

Thanks (5)
me.jpg
By clark.hall
25th Jan 2024 20:24

I think there’s a legitimate concern here from an accountant’s perspective.
Say, client provides monthly profits to UC of £100 per month.
Yet, come to year end, add backs etc, accountant reports to client & HMRC taxable profits of £1500.
The difference could be larger causing confusion if not strained relations between client/accountant/UC

Thanks (0)
Replying to clark.hall:
avatar
By legerman
27th Jan 2024 22:51

clark.hall wrote:

I think there’s a legitimate concern here from an accountant’s perspective.
Say, client provides monthly profits to UC of £100 per month.
Yet, come to year end, add backs etc, accountant reports to client & HMRC taxable profits of £1500.
The difference could be larger causing confusion if not strained relations between client/accountant/UC

Two things, monthly reporting to UC is entirely the clients responsibility, and unless the accountant is providing the figures to the client for UC reporting then it is unlikely the accountant will know, or want to know.

UC reporting is done on a cash basis, and doesn't include everything that is allowable on a tax return, so that could throw the reported figures out when a self assessment is submitted.

Thanks (1)
avatar
By Roland195
28th Jan 2024 11:16

Aside from anything else, the Universal Credit system is designed to keep professional accountants out of it so as not to upset them with our confusing accruals, prepayments and depreciation.

We have enough trouble keeping clients on the straight and narrow as it is without volunteering our services to the DWP. Maybe they'll give you a shiny badge?

Thanks (0)