§ Mrs. BeckettTo ask the Secretary of State for Social Services in what circumstances, and for what reason, the unaudited accounts of a sole trader which would be accepted as evidence of profits for tax purposes are not so accepted for the purposes of a claim for family credit; and whether the additional accountants' fees payable in connection with the claim are taken into account in assessing entitlement to family credit.
§ Mr. Portillo[holding answer 4 July 1988]There is no requirement for self-employed persons to provide any accounts in support of a claim for family credit. Net profit for family credit purposes is arrived at on a basis different from that for tax purposes, by reference to gross receipts and only those expenses allowable under family credit legislation. The necessary information may be provided by completing a form supplied by the Department or by submitting accounts, as the person wishes. If the person 73W chooses to submit accounts, the Family Credit (General) Regulations specify the type of accounts which are acceptable and the period which they must cover. Since there is no requirement to provide such accounts additional accountants' fees should not be entailed in connection with a claim to family credit. Nevertheless, accountants' fees in general would usually be regarded as an allowable business expense in calculating net profit for family credit purposes.
Several representations have been received about the rules governing the acceptability of accounts, and we are considering whether any changes are called for.