Tax credits/universal credit assessment period

[PineappleUpsideDownCake]

Many years ago my husband was made redundant and we were on tax credits, he then went self employed. For a good few years he has earnt above the amount for tax credits but we get sent an annual "we assess you as not being entitled to tax credits you do not need to do anything unless your income has changed" letter, so we are still on their system despite earning more.

With coronavirus his self employed income is now 0 but we have some earned income as well.

My question is regarding the assessment period as I was wondering whether to ring tax credits avout the changes in amounts or apply fresh from universal credit.

• tax credits the period is a year. This means we could earn 0 for the next 6 months and claim tax credits, yet if he earns well between Dec and April we have to pay lots back! This happened to us with a huge overpayment years ago when business improves.

• it looks like UC period is a month, so it changes each month? Does this mean if you earn 0 for 6 months you dont then pay it back the following 6 months?

We have just had the self.employment grant so presumably this month income would be too high.

We also have a child on medium rate dla (recent claim) and I am about to apply for carers.

I dont know how this affects it.

Basically we assumed we wouldnt need to claim either tax credits or UC pre Corona, but want help deciding how to claim and if it is feesable, and which one.

I can't really see where to go for advice?

I am very much hoping my husband will be up and working with the self employed work before April 2021 but for now his self employed work is 0. We have income from his 2 days a week employed work but that is it. I should get carers alongside the DLA, but I don't know how to work it all out.

I really don't want to have to pay it all back next year.

Have a look on the citizens advice website about the benefits, and then if you still have an active claim for tax credits then use one of the comparison sites to see if you would be better off on TC or on UC.

Has he applied for the self-employment support?

Thank-you - yes he got the Employment support and it came through this morning!! But it doesn't look like any positive noises about the scheme continuing, hence need for benefits :(

I can do the income comparison but the fear is that all the tax credits might have to be paid back if he works later in the year as they work on an annual income. We got badly bitten by this before!

Ah fab looked through advice and found it isnt avergaged over the year just iver the assessment period.

I need to apply for one or the other tomorrow as we need the money but Im scared I'll do it wrong and we'll lose out.

Please take advice first so you're not guessing. Once you start a UC claim -even if you abandon it or aren't eligible - you lose tax credits permanently.

Where from? I'm googling like mad amd using calculators but as we are part employed and part self employed it isnt straight forward.

Im really surprised we are getting tax credit forms as they're always 0 - and I dont know if our change in income counts as change in circumstance!

It looks like tax credits would give a better monthly amount but we may have to pay them back if the self enployed work comes back in october....

Not sure if this situation is relevant to you, it’s all a bit of a minefield honestly, but I read on a bbc article yesterday about a couple who tried to claim universal credit but couldn’t because of what they already had in savings

No real savings! We do set aside tax for self employment but Ive read you can put a note regarding that.

My understanding is that UC is paid 4 weeks worth at a time, approx 5 weeks after you claim, based on the income you have declared. Assuming you declare all income, be it self employed support, employed earnings and / or any future self employed earnings, as they happen, there won't be an overpayment, as they will be taken into account for the assessment period they are paying. It is possible that these will exceed current entitlement, there is information on the gov.uk website, together with benefit calculators www.gov.uk/benefits-calculators There is much coverage about people losing entitlement to tax credits when claiming UC, but in your case you don't get Tax Credits to lose them. You cannot generally make a new claim to tax credits (see www.gov.uk/claim-tax-credits), it may be still worthwhile claiming UC now, even if expecting income to exceed currently, so that you are in the system. But I am not an expert on this. Citizens advice may offer advice alternatively.

I dont receive any tax credits currently but there appears to be an open claim as we gt the annual tax credit renewal. Quite literally this week which says to update them if the amounts are wrong....

If there is no chance of updating the tax credits that would make decisions easier!

It looks like we could claim more monthky with them, but risk owing it back at tge end of the year if the self employed work comes back/corona lessons.

And yes gk my reading too was it was with UC it is all conta8ned with a short assessment period, so realky we should have started claiming in April - we had just assumed the self employment grant would continue and cover it really.

Tax credits are awarded based on your income in a previous tax year, so the likelihood would be that you couldn't get it when you submit your reassessment forms, unless last year's income had dropped from your last submission a year ago, but you might possibly be entitled next year (assuming you hadn't claimed UC) if this year's income is significantly less, bearing in mind the s/emp grant is likely to be treated as income

Yep we havent been entitled for several years but we'd be entitled as this year is significantly less z- self employed work since March. If it doesnt pick up income will be well under qualifying amount. There is the chance it could pick up later in the tax year if corona calms down...