S/E on UC and Irregular income.

kennyboy83

Hi all,


I'm confused with all the assesment on self employed work with Universal Credit. It looks like DWP can't handle S/E or even irregular income very well.



I'm currently on LCW and I want to do a little work for myself nothing major just an hour here and there a week, just something that fits my own very limited capacity and helps fill my time. If it brings in income great, but I can't say it will or how frequent thats going to be.

Income from self-employment will be taken into account as earned income for the purposes of calculating UC regardless of whether the person is found to be in gainful self-employment or not.

UC seem to asses you month to month, instead of HMRC like tax year to tax year, so how on earth does this work in the real world? For example; if somebody has paid out an expense where that's help, website, adverts etc one month and then the next month a trickle of income comes in.


£500 outgoing one month
£50 income the next month


How can UC call that £50 income earnings? When in the real world you are hypothetical £450 worse off.

Allowable business costs are deducted in the month in which they are paid for. For example, if you pay £360 for your van’s annual insurance in June, then you would be allowed to include all of the £360 as a business expense within June’s accounts. If however you renewed your van’s insurance but paid on a monthly basis then you would only be able to include £30 per month as a business expense.

Is there any way to do this without cheating the system and without it feeling like punishment for actually trying?

huckster

Yes it is a monthly reporting system, so you report relevant income and expenses.

If you are struggling to deal with the way UC works, then book an a self employment appointment at the Job Centre and explain the problems you are having. See if they can help.

Better for Job Centre to explain UC reportimg requirements, because at some stage they may ask you to attend a review where they look at the accounts and paperwork.

WillowCat

With LCW there is no minimum income floor so that's the main issue with self employment on UC avoided.

Regarding your example accounts, if you have £500 expenses and no income in one month, this loss will be carried forward and set against your income of £50 the next. The following month there will be £450 losses available to set against income.

I believe that the losses can be carried forward for 11 months.

calcotti

WillowCat wrote: »

I believe that the losses can be carried forward for 11 months.

I don't think there’s any time limit, losses can be carried forward until they are extinguished.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787442/admh4.pdf

Unused Losses
H4501 For the purposes of this guidance In UC an unused loss does not include the loss from an assessment period that began before 11.4.18.

H4502 A claimant has an unused loss in any previous AP, which will be used to calculate their self-employed earnings in the current AP1 as set out at H4158, if:
1. the calculation results in a negative amount (a loss) and
2. the loss has not been extinguished in any subsequent AP.
Note: a loss is extinguished if no amount of that loss remains after it has been deducted in the calculation at H4158 5.