Universal Credit tops up your earnings if you’re on a low income, and it's explained in more detail at the link here. There has been widespread opposition, however, to the introduction of the new system. It has been criticised for its “glacial pace”, for freezing benefits rates and, significantly, for the extra pressure it exerts on small businesses.
Implementation of Universal Credit has featured the pilot of a new Real-Time Information (RTI) system, for the mandatory reporting of business outgoings to HMRC. Small businesses are forced to absorb the additional administration duties and associated extra resource costs.
It’s no small undertaking, considering somewhere in the region of 11 million people work for small and micro-businesses in the UK. The Financial Times printed the protests of Labour MP for Birkenhead, Frank Field, who highlighted the matter:
“Many smaller businesses make frequent payroll payments over the course of an average month, each of which will now trigger the need to report to HM Revenue & Customs….
“Wherever the government thinks it’s going with universal credit, we can see from this latest instalment of woe that millions of people employed by small businesses are in danger of having to deal with the old problems of overpayments and underpayments, just as if universal credit had never been invented.”
The Government gave small businesses some breathing space to incorporate the RTI system that accompanies Universal Benefit, as reported by Computing magazine.
HM Revenue and Customs (HMRC) has also relaxed reporting arrangements for micro employers (nine or fewer employees), meaning PAYE information can be reported on or before the last payday in the month until April 2016.
A similar request is made of freelancers and entrepreneurs. If you are self-employed as either a sole trader or partner in a partnership, you’re asked to calculate and file monthly profits in order to claim Universal Credit.
Universal Credit places no limits on the number of working hours there are in your working week, or the amount you can earn. As a means tested benefit, the amount of welfare paid into your bank will reduce as you earn more.
Deductions will kick in as your work allowance is reached. Part-time employees are encouraged to seek more hours under the system, by taking reasonable steps under what is known as the “in-work conditionality regime.”
More information on Universal Credit can be found at www.gov.uk/universal-credit