Lib Dem leader Vince Cable has called for a halt to the roll-out of Universal Credit, saying “While the current Government’s handling of UC has left it on life support, Liberal Democrats argue that with a pause followed by some major reforms, the system could yet be salvaged.”
The IPSE supports Cable, believing that Universal Credit penalises the self-employed by not accounting for their fluctuating incomes, leaving a self-employed person up to £3,000 worse-off a year compared to employees earning the same amount.
Jordan Marshall, IPSE’s Policy Development Manager, explains, “Universal Credit has been a disaster for many people – particularly the self-employed. At present, it simply does not work for them. Not only are they suffering from the severe delays of this creaking system; it also penalises them for their way of working.
“Vince Cable is absolutely right: the current system of calculating Universal Credit payments on a monthly basis doesn’t consider the fluctuating nature of self-employed income.
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Email Jaime“Calculating payments over a few months, or as IPSE prefers, over the course of the year, is a much fairer approach.
“To make Universal Credit really work, the government should also listen to Mr Cable’s call to give the self-employed more time to get their businesses up and running before the monthly assessments kick in.
“The current 12-month grace period forces people to abandon their businesses before they have a chance to succeed.
“Mr Cable’s suggestion to increase this period from 12 to 24 months is a step in the right direction, although IPSE would like to see this extended even further.
“Then, this flawed system could be made to actually work for the UK’s self-employed strivers.”
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