Universal Credit & Update On LITRG
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Universal Credit & Update on LITRG
Joint event with CIOT
Speaker: Robin Williamson
Village Hotel, Coryton, Cardiff CF14 7EF
15:45 Registration & Refreshments
16:00 Presentation Begins
18:00 Presentation Ends
Robin Williamson is the Technical Director of the Low Incomes Tax Reform Group (LITRG).
Robin is also a lecturer and writer. He was a senior technical editor at CHH and continues to produce technical material (the “Tax Credits Handbook” is the most comprehensive reference book on the subject).
Robin has been involved with the Universal Credit since the concept was first formulated and has been instrumental in liaising with government through the design and testing of the system. Robin is acknowledged to be the UK’s expert on the Universal Credit. No-one within the professions nor government has a more though understanding of both the theoretical and practical implications of what is a hugely complex system.
For accountants and tax advisers, the focus of the Universal Credit will be the self-employed. With an estimated 4.8m self-employed people working in the UK, the bureaucracy underpinning the Universal Credit will create a huge burden. The exact structure is still being refined but live issues are still:
• the self-employed having to prepare monthly accounts for the DWP (and annual accounts for HMRC on an entirely different basis);
• the disregard of trading losses under the DWP basis of accounting so excess expenses cannot be set off against a profit in subsequent months;
• the minimum income floor which substitutes a deemed profit in any month in which actual profit is lower.
Robin reviewed the pilot programme and identified a range of practical problems which have still to be adequately addressed such as the sheer volume of claims to be processed, their complexity, changes in claimants’ circumstances and ongoing conditions for continuing entitlement to benefit. Robin also raised the issue of IT systems and the government has since announced delays in the roll-out while, amongst other things, the IT structure which underpins the whole system is being made more robust.
For the accountant, the small business proprietor will want to avoid the bureaucratic distractions of claiming Universal Credit and will need professional assistance to achieve that. The DWP’s unrealistic requirements for self-employed claimants to prepare monthly accounts and file these with the DWP within 14 days of the end of each month could cause real financial hardship in the population the new system is meant to help.
However, the high work volumes which the system could end up creating is a risk in itself. With tight deadlines and client’s monthly income being dependent on complying with DWP rules and deadlines, accountants may not have the resources to prepare accounts and claims in time. New procedures and information gathering processes will be essential and need to be planned for.
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