Should I pay tax now or January (Universal Credit related)

Under_the_Radar_2

Claimed SEISS grant this month, got my self assessment bill through today and wonder whether it would be shrewd to pay the tax bill so it is a loss to my business in the same month period for UC,and thus reducing the surplus earnings or whether to keep the money in my bank for emergencies until January, my head tells me it makes sense to pay it now wondering if there were any conflicting points of view? Thanks in Advance.

calcotti

You can do that and it could make a lot of sense. Unless you use up all of the grant (or all of it above your Work Allowance) it is going to affect your UC this month. It’s worth trying to work out the numbers though. You could pay some tax and keep some of the money. Remember that if there is excess income not all of it is carried forward (there is a £2500 disregard). The calculation is explained here https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/surplus-earnings-and-losses/

What is right for you depends on whether you are likely to need the money for other things prior to when you will otherwise need to pay your tax bill.