Jump to content
House Price Crash Forum
Sign in to follow this  
CHF

Wheres The Universal Credit Thread?

Recommended Posts

I came on looking for one and cant see it.

When is it supposed to kick in? Some big changes it seemed.

I got the impression that lots of people might go self employed or even declare some of their earnings if presntly off the radar so as to continue to qualify for benefits.

Would this have the effect of legitimizing some of the income and therefore making it liable for income tax and increasing receipts?

Share this post


Link to post
Share on other sites

Iirc 2013 is when it is supposed to come in.

Seemed to me that that it was just going to rename all existing benefits to 'Universal Credit' and still have them as tick boxes for the different means tested components e.g. council tax, housing, job seekers or employment support allowance etc.

Share this post


Link to post
Share on other sites

reforms to welfare a bit like a citizens income

Either you don't understand the 'Universal Credit' or don't understand the concept of a citizen's income (maybe both). The name 'Universal Credit' is (deliberately?) misleading - it's neither universal nor a credit. Unified Benefit would be a more informative name.

Share this post


Link to post
Share on other sites

Self employed will be deemed to earn minimum wage for the hours they declare.

Am sure I read that in recent benefit changes

Correct. And a good illustration of why 'Universal Credit' is not at all like a Citizen's Basic Income.

'CAB briefing on Universal Credit':

http://www.citizensa...n_27th_2011.pdf

Self-employed people starting up in business. The current system takes into account actual

earnings. UC will deem people to earn the minimum wage even if they have been unable to take

a wage out of the business during the starting up period.

At present someone who starts up as self employed will be entitled to full WTC (as long as the

work they are doing is seen to be in expectation of payment i.e. the business has to be

reasonably viable)

For example: a lone parent with one child - living in rented accommodation (£75 rent and £15

council tax)- who starts up in business and is unable during the first 6 months to take any

earnings out of the business will be entitled to £253/wk from tax credits, HB/CTB and child

benefit.

Under UC they will have a personal allowance of £210.

If she is working 40 hours/week she will be deemed to have an income of £237(min wage of

£5.93 * 40)

Earnings disregard of £40 = £237-£40= £197

65%of £197= £128 to be taken from personal amount of UC

Personal allowance of £210 - £128 = £82

Total income will be £82+ child ben£20 = £102 out of which she has to pay £75 rent and

£15 council tax. Leaving her with £12 /week to pay for all food household expenses etc

for her and her child

Under the present system she would have £163/week

This is clearly the difference between being able or not to set up in business.

Many people will come into more than one of the above categories and so the reductions in income

will be compounded – this could cause great difficulty for some people

This is likely to hit many self-employed people on low-incomes hard and deter many from attempting to start businesses.

'Tax warning for self-employed Cumbrians':

http://www.cumberlan...brians-1.806789

Self-employed Cumbrians face a tax bombshell hidden in the coalition Government's changes to the benefits system, a county finance expert has warned.

Previously, couples with children who run their own businesses could top up their income with tax credits if their taxable profits fell below a certain level.

But, under new rules in the Government's 'Universal Credit' system, those couples will be deemed automatically to earn the minimum wage, regardless of their real income.

If they work a 40-hour week, that means the taxman would assume they earn a combined £24,669, dramatically reducing the amount of tax credits they can claim.

Rob Hitch, a partner with Dodd & Co Chartered Accountants, of Carlisle and Penrith, said the changes could have a huge effect on home-run businesses.

Edit: Added linked quote from The Cumberland News.

Edited by CrashConnoisseur

Share this post


Link to post
Share on other sites

Correct. And a good illustration of why 'Universal Credit' is not at all like a Citizen's Basic Income.

'CAB briefing on Universal Credit':

http://www.citizensa...n_27th_2011.pdf

This is likely to hit many self-employed people on low-incomes hard and deter many from attempting to start businesses.

'Tax warning for self-employed Cumbrians':

http://www.cumberlan...brians-1.806789

what if you only work say 10,15 or 20 hours say. How would this work?

Edit: Added linked quote from The Cumberland News.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.