To ask the Secretary of State for Work and Pensions, for what reasons the Local Restriction Support Grant paid by local authorities to businesses is taken into account for self-employed tax credit claimants but not for self-employed universal credit claimants.
Answered on
11 March 2021
The tax credits system is designed to work closely alongside the tax system. This is why the general measure of income for assessing claims to tax credits is any income which is charged to income tax.
The Local Restriction Support Grant is a taxable payment made to businesses. As such, it is considered as income for tax credits purposes. This is consistent with other forms of taxable business support available during the Covid-19 pandemic, such as the Self-Employment Income Support Grant and Small Business Grants.
DWP legislation provides that Covid-19 related grants which are intended to cover loss of business income and to aid business recovery, will be disregarded for Universal Credit purposes for 12 months.