Universal Credits - Self Employed

samasama

Just reading through that thread and they've picked up on something I didn't notice on reading the UC info - a two year limit on housing costs. It's unclear whether it relates to assistance with mortgage payments or whether it's rental as well. If read as the latter it seems to imply that after 2 years of not being in full-time NMW employment, you lose the equivalent of housing benefit. Really?

I'm also very concerned about the online jobsearch requirement they mention, where jobseekers would be required to spend 35hrs per week online searching for jobs through their site and any shortfall would presumably result in conditionality. What about people with limited online access or who wouldn't trust online security enough to put personal details like address, phone numbers, email addresses out there for hackers & stalkers to access. (ie Monster jobs managing to give away all that info). That also doesn't take into account time spent visiting agencies, interviews, etc.

To be honest I can't see how it's all going to happen anyway as I really don't think the government's IT system will cope (just look at the previous problems when online tax returns caused the whole thing to fall over, repeatedly).

John_Pierpoint

Agent-47 wrote: »

Your last point is very important. All these families in London are no longer going to get housing benefit and are going to be moved to other areas in the country that is really going to help them get more work?

No but they will get replaced by (hopefully) skilled workers, who will be doing high added value jobs bringing in much needed foreign exchange - so Londoners can carry on subsidising other parts of the country.

SarahCarer

My problem I think, will be... As a writer (not like Jane Austen I write SEO etc) I get paid as and when things get accepted. So it's going to be tough for me to prove a weekly income... It'll vary so much, that's what worries me. I hesitate to say this having read through this board, but I'm also a single parent, so WFTC plays a part in my income that I don't want to do with out. I wish it'd been finalised so I know what I'll be dealing with.

HappyMJ

SarahCarer wrote: »

My problem I think, will be... As a writer (not like Jane Austen I write SEO etc) I get paid as and when things get accepted. So it's going to be tough for me to prove a weekly income... It'll vary so much, that's what worries me. I hesitate to say this having read through this board, but I'm also a single parent, so WFTC plays a part in my income that I don't want to do with out. I wish it'd been finalised so I know what I'll be dealing with.

You don't need to prove a weekly income every week you can still average your income over a longer period as you can now.

I'm still not sure exactly how it's going to work. The proposals are proposing calculations made on months rather than weeks and all benefit payments are to be made monthly but does that mean that people on weekly pay get more in the month in which there are 4 weekly payments and every third month they get less in which there are 5 weekly payments (13 weeks over 3 months).

justjohn

HappyMJ wrote: »

You don't need to prove a weekly income every week you can still average your income over a longer period as you can now.

I'm still not sure exactly how it's going to work. The proposals are proposing calculations made on months rather than weeks and all benefit payments are to be made monthly but does that mean that people on weekly pay get more in the month in which there are 4 weekly payments and every third month they get less in which there are 5 weekly payments (13 weeks over 3 months).

What happens to a small scale property developer? . He may only get profit after 6 months or even 2 years lol

White paper is unworkable as it stands, however there does seem to be a few sketchy parts regarding discretionary measures.

BigAunty

justjohn wrote: »

What happens to a small scale property developer? . He may only get profit after 6 months or even 2 years lol

..

I haven't read the specific whitepaper on how it will actually operate for the self employed (but I'd love a link if anyone can post one).

But surely someone who is in business in any capacity has the capability to input into a system on a regular basis their actual profit and provide a forecast, an estimate of future profit?

Isn't that just basic business practice, not much more than a step above book-keeping, to know current turnover/profit and estimate future income, something that is undertaken by most properly run companies?

Are we saying that it is absent on the self employed in receipt of benefits because the cushion of state support has robbed them of any real need to keep detailed tabs on their business, including quite basic record keeping and quite common forecasting of profit and loss?

That they just bimble along in their micro 'businesses' with scant attention to marketing and growing their company and no great need for professional business techniques relating to financial management? That the benefit system has actually made them relatively helpless at business management because there's been no previous need to have that degree of professionalism because they don't depend on their business to make money or keep others in employment, no pressure to perform any better?

justjohn

BigAunty wrote: »

I haven't read the specific whitepaper on how it will actually operate for the self employed (but I'd love a link if anyone can post one).

here is link http://www.dwp.gov.uk/policy/welfare-reform/universal-credit/

But surely someone who is in business in any capacity has the capability to input into a system on a regular basis their actual profit and provide a forecast, an estimate of future profit?

Isn't that just basic business practice, not much more than a step above book-keeping, to know current turnover/profit and estimate future income, something that is undertaken by most properly run companies

Cash/profits are erratic in small businesses. And even big businesses forecast earnings/profit and has to be adjusted every so often.

Sometimes profit is not seen for a length of time.

Eg. a high st retailer will see high profit at Xmas. A property developer will see profit after development.

Its not always a constant flow. Yes you can forecast and as the year goes on you should be more accurate.

However UC is cash in cash out. And its monthly so if there is only one or 2 profitable months its unworkable(in theory).

And theres the bad years. you may have a good profit over 5 years but a garbage profit year 1,2,4,5 but year 3 you made more than enough to make it viable for the other years. Many big businesses make a loss one or 2 years out of the blue then have too restructure diversify to get profits up subsequent years. Small businesses are no different.

There are many holes in this for the self employed.

And even if you were too say , well thats tuff on the self employed. If this does not get changed it will effect the economy and joe public.

What about small village shops just as an example many claim wtc. Many dont hit mwf. There are hundreds of examples

Sixer

BigAunty wrote: »

I haven't read the specific whitepaper on how it will actually operate for the self employed (but I'd love a link if anyone can post one).

But surely someone who is in business in any capacity has the capability to input into a system on a regular basis their actual profit and provide a forecast, an estimate of future profit?

Isn't that just basic business practice, not much more than a step above book-keeping, to know current turnover/profit and estimate future income, something that is undertaken by most properly run companies?

Are we saying that it is absent on the self employed in receipt of benefits because the cushion of state support has robbed them of any real need to keep detailed tabs on their business, including quite basic record keeping and quite common forecasting of profit and loss?

That they just bimble along in their micro 'businesses' with scant attention to marketing and growing their company and no great need for professional business techniques relating to financial management? That the benefit system has actually made them relatively helpless at business management because there's been no previous need to have that degree of professionalism because they don't depend on their business to make money or keep others in employment, no pressure to perform any better?

No, BigAunty. They are saying the self-employed must have MONTHLY accounting periods (whilst still maintaining an ANNUAL accounting period for HMRC). They must produce simple income/expenditure sheets for each month and the "profit" for an individual month will be used to calculate UC for that month. Losses cannot be carried forward to another month.

The "profit" that is therefore declared for UC over the course of 12 months is very likely for many people to be different to the taxable annual profits declared to HMRC in self-assessment.

1) it will disadvantage many claimants who have large annual expenses (eg taxi drivers and hire and reward insurance) or those who has an individual problem with income (eg a late paying client) or those who simply have to wait for profits (ie small scale builders/developers)

2) it's completely open to manipulation by the less charming of claimants who will organise invoicing out and in to their own advantage - so no improvement on the current 30hr-hobby-business-WTC-fiasco we have now

Edited to add: and quite how capital allowances will play into all of this (or monthly vs annual pension contributions for that matter, which I do based on profit annually, for example) I simply can't imagine.

justjohn

they could have put in safeguards eg vat,turnover and/or customers. There then would have been some sorta safety net.

Sixer

justjohn wrote: »

Lets face it, the peeps they want too catch are a bit thick too work the system properly. and even then it would take that much effort you would just do it legit lol

Actually, people who know how to manipulate the benefits system are far from thick and there are a number of them. Additionally, they are one of the specific targets of this reform.

Despite much of the stuff and nonsense spouted about the self-employed paying less proportional tax than the employed, when you actually look outside of the entitlement to benefits issue, the only real way to pay significantly less tax than PAYE as a self-employed person is to falsify your tax return. And as I keep saying, that's neither a tax rates nor a welfare issue. It's a crime. Nothing more complicated than that.