BENEFITS SHAKE-UP MEANS SELF-EMPLOYED MUST PLAN AHEAD

The region’s self-employed have been urged to ‘be aware’ of sweeping claim benefit changes which come into force later this year and to take steps now to get their affairs in order.

 

The alert comes from tax expert Anita Stewart who has warned that people in business could lose their benefits if they do not correctly inform the Inland Revenue of their income and profits as part of the government-led universal credit scheme.

 

Universal credit, a new online-based system championed by Secretary of State for Work and Pensions Iain Duncan Smith, started with a trial in Greater Manchester 29 April but goes live nationally in October. It will affect six million people.

 

The initiative will provide one monthly benefits payout and replaces housing benefit, Jobseekers’ Allowance, working and child tax credits, employment and support allowances and income support.

 

Requiring claimants to register online, it is intended to make the benefits system simpler for people who are out of work or on low incomes to manage what they are claiming. The government says it will mean people are better off in work than relying on benefits.

 

But Ms Stewart, a partner at Midland-based DHJH Chartered Accountants, has warned there are potential pitfalls for the self-employed and urged sole traders and partnerships to seek advice.

 

She said: “Universal Credit has the potential to make the benefits system simpler but self-employed people have to plan carefully.

 

“People who are taxed through PAYE will find their information is passed straight to the Universal Credit Agency. But that’s not the same for sole traders or partnerships.

 

“They have to inform the Department of Work and Pensions via HM Revenue & Customs of their monthly net profits, on which the following month’s credit will be based, and give that information through a new online system. If they don’t, they risk having their benefits stopped all together.

 

“The department will want up to date, correct information in advance through the new online network. But there’s an obvious worry as thousands of potential claimants here in the Midlands do not have reliable or regular access to the internet which straight away raises a barrier – something which is causing concern particularly amongst small businesses.”

 

Through Ms Stewart, DHJH is helping to advise business people on the changes and how to ensure their benefits are not affected through what she described as ‘smart accounting’.

 

Appointments are available by calling 01299 403503 or email  This email address is being protected from spambots. You need JavaScript enabled to view it..">This email address is being protected from spambots. You need JavaScript enabled to view it..

 

The government estimates 3.1 million households will be entitled to more benefits as a result of universal credit, while 2.8 million households will be entitled to less. It is being introduced over a four-year period.

 

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