bit of a quiet afternoon with the last of the self assessments now well out of the way and nothing but Sage questions on the site so I was reading up on the links between RTI and Universal credits.
One interesting point is that it is definitely aimed at moving the self employed away from the tax credits system. espechially this little gem that I came accross (taken from an ACCA analysis).
Gainful self-employment means that the claimant is carrying on a business that is organised, developed, regular and carried out in expectation of profit and the claimant is taking active steps to increase their earnings. This would usually be expected to reach the equivalent of 35 hours at the minimum wage per week. In this case, the claimants earnings from self-employment are subject to the minimum income floor (a minimum level of profit per month).
Where they do not meet this requirement and the claimant continues in self-employment, they will be subject to conditionality requirements; they must attend interview courses and take steps to increase their earnings.
So, basically, if you have any business owners who are struggling to keep their businesses going by minimising their income to keep the business going but claiming tax credits then you need to make them aware of the changes on the horizon so that they are better able to prepare for it.
I'm reading the above that the self employed may lose their entitlement to tax credits unless they earn at least £11,265.80 per annum (£938.82 pcm).
Happy to be corrected on my assumptions in the calculation of the figures (assuming full 52 weeks rather than 48 weeks). But I think that the principle and intent of the changes is clear and our clients need to prepare themselves for the coming storm.
Hope that helps people,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I have always understood that if self-employed earnings are below the minimum income floor, then the claimant would not be ineligible to make a claim, but the calculation for the amount they would receive would be made assuming they had earnings the equivalent of the minimum income floor.
I would imagine that the interviews they would have to attend would explore ways of them increasing their earnings to a level above the minimum income floor.
Like you, I am only making an assumption and could be wrong. Found this link that might be helpful, only had a quick look at it so far.
