Budget 2015 – Tax Credits

As from 6 April 2015, there will be small increases to the various elements of tax credits:

  • Basic element increase of £20
  • Couple/lone parent element increase of £20
  • 30 hour element increase of £10
  • Disabled worker element increase of £35
  • Severe disability element increase of £20
  • Child element increase of £30
  • Disabled child element increase of £40
  • Severely disabled child element increase of £20

One change that has been announced is a new test for the self employed, to ensure HMRC are supporting only those who are genuinely self employed.

As from 6 April 2015, the new test will require those Working Tax Credits (WTC) claimants relying on self-employment to meet the entitlement conditions to be undertaking an activity which is commercial and profitable, or working towards profitability.  The test will apply to the working hours used to qualify for WTC as a self employed claimant.

The test provides some alignment of the principles already established in case law with the self employment test for income tax, and is designed to prevent “bogus self employment and abuse of the tax credits system”.

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Nov 19

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