HMRC announce new rules for self employed earning too little

The process of weeding out those failing to be 'gainfully self employed' has begun in advance of Universal Credit (UC)

The HMRC has announced new rules  from 6th April for the self employed claiming Working Tax Credit (WTC) with earnings below a “threshold based on working hours and the National Minimum Wage.” This is likely to be 35 hours per week / £11,000 PA,  ‘the minimum income floor’  (MIF) under Universal Credit (UC).

Claimants earning below the above ‘threshold’ must submit receipts, expenses and records of sales & purchases.  They may also have to submit evidence of a business plan, planned work, cash flow & profit projections.

“HMRC will use the information provided to reach a decision about the claimants’ current WTC award.”

At this stage, HMRC state that the child element is unaffected, although it may not be the case when tax credits are abolished under UC.

When the full conditionality of UC is in place, self employed claimants will be mandated to the Jobcentre and have to submit monthly accounts to the to the DWP. Their UC will be cut for any month they fail to reach the MIF.  If a claimant consistently fails to reach the MIF they will no longer be ‘gainfully self employed’ and must look for employed work.


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