Social Security (Miscellaneous Amendment) (Scotland) Regulations 2025: partial business and regulatory impact assessment – 21 March 2025

2. Executive Summary

The ‘Move to UC’ is a UK Government programme that is phasing out several existing benefits and replacing them with Universal Credit (UC). New applications for tax credits closed in April 2019, and almost everyone in the UK who was previously in receipt of tax credits has now been through the managed migration process known as the ‘Move to UC’. The process will be fully complete for tax credits by 5 April 2025 when tax credits will formally close. These Scottish Government regulations will come into force in June 2025.

In terms of the impact on Scottish Businesses, we anticipate that there will be no impact. The regulations are necessitated by changes to a UK Government income replacement benefit. While some small business owners may currently be in receipt of tax credits the decision to close them was made by the UK Government, and it is therefore their responsibility to impact this decision.

The regulations for a number of Scottish Government social security benefits refer to entitlement to, or payment of, working tax credit and/or child tax credit, to establish eligibility for those Scottish Government social security benefits. These are: Best Start Foods, Best Start Grants, Scottish Child Payment, Funeral Support Payment and, to a secondary extent, Winter Heating Payments.

As tax credits will cease to exist, they will no longer be a route to qualification for Scottish Government benefits. Removing tax credits from legislation is the end of the process which started when tax credits closed for new applications in 2019 and the change was already built into policy assumptions as the devolved benefits were delivered.

This impact assessment does not relate to the ‘Move to UC’ as that is a UK Government initiative.

The regulations will also include an amendment to the Social Security (Information-sharing) (Scotland) Regulations 2021 to replace reference to Discretionary Housing Payments being made under the Discretionary Financial Assistance Regulations 2001 (the 2001 Regulations) with reference to Discretionary Housing Payments now being made under the Social Security (Scotland) Act 2018 (the 2018 Act). This is a technical amendment, therefore we anticipate that there will be no impact on Scottish Businesses.