From October 2013, the new Universal Credits system will start to be introduced around the UK. This new benefits system will replace income support, housing benefit, job seekers allowance and employment and support allowance. Then, from April 2014, workers who are currently claiming tax credits will claim universal credits instead.
It is therefore crucial that you report the correct number of Normal Hours Worked for your employees when you submit your RTI FPS report each time your employees are paid. These hours will effect employee entitlements to tax credits, and subsequently the new Universal credits. Currently, for RTI reporting, the hours are banded:
Band A: less then 16 hours per week
Band B: 16-29.99 hours per week
Band C: 30 plus hours per week
Band D: Other
From April 2014 however, there will be an additional band:-
Band A: less than 16 hours per week
Bank B: 16-23.99 hours per week
Band C: 24-29.99 hours per week
Band D: 30 plus hours per week
Band E: Other
Payroll software should automatically apply the bandings from the Normal Working hours entered when employees are added, but if this information is not given to the payroll provider, the software may have to choose ‘Other’ which may then effect any Universal Credit claims.