Self-employed & Universal Credit

e1993ry

Hello,

My apologies if the following post is long-winded or has been answered in a general manner here in the past. I have been scouring the internet for answers on self-employment & universal credit and almost everything I read provides non-specific, conflicting information.

Currently I am working full-time. I trade Forex (online currency trading) in my spare time, however with working full-time I have very little time to fully focus on it. I feel I am ready to go full-time and dedicate all my time to it.

I want to leave my current job, however I'd like to receive Universal Credit to support my basic needs for the first few months so I don't have to rely on my trading profits until I am consistently profitable.

However the issue currently is that I do not know whether I would be eligible for UC, and I don't want to leave my current job and land into an interview at the Jobs & Benefits office only to be turned away with no job to turn back to.

On all eligibility checkers I show up as eligible for £73 per week, however when I research further online there seems to be many things which aren't covered and could hinder my chances.

My concerns of possible issues are the following:
1) I fear that there seems to be no clear guidance on what qualifies one as being self-employed. Many people have a distorted view of Forex/currency trading and see it as 'gambling'. Is there a line between what constitutes a valid self-employed business category? Technically it is a profession with an end goal of achieving a profit, it's simply not as easy to grasp as 'I cut hair', for example.
2) I have read online that if you were self-employed within 5 years previously you are not eligible? However this is as far as the information on that I've received - nothing further. I was previously self-employed running my own business in 2016 and was receiving 'Enterprise Allowance' of £50 per week during that time for approx 3 months. I then went into full-time employment and have been ever since. Would this be recorded and detailed in my claim? Would it affect my eligibility to claim? This was for a clothing business I started up so it is in no way related to what I am trying to do now. It was also via a Limited Company, what I'm trying to do now would be 'sole trader'.

Lastly, is there any way I could begin a claim whilst still in full-time employment to figure out whether I'm eligible? For example complete my claim stating I'm self-employed and go to my interview etc, so that I can find out before I leave my job? This genuinely seems like the only way to know for sure whether I'd be eligible as the information out there is hugely confusing.

Many, many thanks for any help provided!

tacpot12

e1993ry wrote: »

…
I want to leave my current job, however I'd like to receive Universal Credit to support my basic needs for the first few months so I don't have to rely on my trading profits until I am consistently profitable.
…

You will not receive UC for three months because you have left a job that was supporting you. I hope that your trading profits exceed the level at which you will receive anything state assistance within three months.

calcotti

e1993ry wrote: »

Lastly, is there any way I could begin a claim whilst still in full-time employment to figure out whether I'm eligible? For example complete my claim stating I'm self-employed and go to my interview etc, so that I can find out before I leave my job? This genuinely seems like the only way to know for sure whether I'd be eligible ...!

That will not work. Under UC your entitlement to payment is calculated on a monthly basis. If you claim while employed your entitlement will be calculated taking into account your employment earnings.

You’ve probably looked at these

https://www.cithttps://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

https://www.citizensadvice.org.uk/benefits/universal-credit/on-universal-credit/how-the-minimum-income-floor-works-if-youre-self-employed/

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/minimum-income-floor/

I think your bit about 5 years refers to the start up period during which the Minimum Income Floor is not applied. Only one startup period is allowed each 5 years, this avoids a claimant repeatedly starting a new self employment businesses to avoid the MIF. You have not previously had a UC startup period so I don’t think this is relevant.

e1993ry

tacpot12 wrote: »

You will not receive UC for three months because you have left a job that was supporting you. I hope that your trading profits exceed the level at which you will receive anything state assistance within three months.

Surely that isn’t applicable in this case, as moving from a full-time job to self-employed is basically just switching jobs?

I think what you are referring to applies to someone leaving a job to become unemployed, whereas in my case I would be leaving a job and moving into another job instead.

Surely people who become self-employed all had to leave a job in the first place?

Again this is my worry. All aspects of this are contradictory in most aspects and open to individual opinion rather than set in stone.

poppy12345

e1993ry wrote: »

Surely that isn’t applicable in this case, as moving from a full-time job to self-employed is basically just switching jobs?

I think what you are referring to applies to someone leaving a job to become unemployed, whereas in my case I would be leaving a job and moving into another job instead.

Surely people who become self-employed all had to leave a job in the first place?

Again this is my worry. All aspects of this are contradictory in most aspects and open to individual opinion rather than set in stone.

You will be leaving a job that's supporting you to go self employed that can't support you, this can mean you could be sanctioned for 3 months.

e1993ry

poppy12345 wrote: »

You will be leaving a job that's supporting you to go self employed that can't support you, this can mean you could be sanctioned for 3 months.

Can I ask what you’re basing this on? Is there information online stating this?

As far as I know leaving a job for ‘good reason’ is within the rules. Reason 1) I’m leaving to switch job/career. 2) I’m currently 3 months into a 6 month probationary period of my current job - so not technically on a full time contract as of yet. 3) I’m seeking to leave my current job due to health concerns - the shifts are days on then nights on 12 hour shifts, I can’t sleep and get headaches constantly due to the shift patterns.

All of these reasons would be sufficient if what you are saying is correct, would they not?

Please let me know if anyone has had a similar experience.

Many thanks

calcotti

Leaving with good reason should be OK and reason 3 may be good reason (reason one is a voluntary reduction in earnings, reason 2 is voluntarily giving up employment). You had not explained the reasons for wanting to leave previously so poppy’s warning was based on you changing from work that can support you to work that can’t just because you felt like it. It will be up to a a Decision Maker to decide whether or not there was ‘good reason’

Caz3121

e1993ry wrote: »

I want to leave my current job, however I'd like to receive Universal Credit to support my basic needs for the first few months so I don't have to rely on my trading profits until I am consistently profitable.

do you have a business plan? when would you be earning at least minimum wage? Do you have savings that can support you whilst you build your business?

tacpot12

e1993ry wrote: »

Surely that isn’t applicable in this case, as moving from a full-time job to self-employed is basically just switching jobs?

I think what you are referring to applies to someone leaving a job to become unemployed, whereas in my case I would be leaving a job and moving into another job instead.

Surely people who become self-employed all had to leave a job in the first place?

Again this is my worry. All aspects of this are contradictory in most aspects and open to individual opinion rather than set in stone.

You are choosing to move to a new job that is not paying you enough to live on, and expecting the tax payers to support you while you so. UC is not supposed to be a support system for entrepreneurs. You are correct that most people who become self-employed have to leave employment to do so; few people leave school and go straight into self-employment. But what they don't do is claim benefits while they do so; they work like demons to earn the money they need to live on.

As calcotti has explained, it is down to the decision makers how they view your actions. This is why it is not set in stone; because they have to have some flexibility to look at the evidence on front of them to see if someone is feigning need, or is actually in need. No one here will guarantee you will successfully be able to claim UC, because your situation is borderline (between benefit fraud and legitimate use of the system).

There is an appeal system if you disagree with the decision maker's decision.

huckster

You can register for UC, as being both employed and self employed.

OK, because of earnings, you won't qualify for any payments.

But you could then see a Job Centre Work Coach to verify your self employment. Then you could see how UC/DWP would treat forex trading. I cannot see why it would not be accepted, if you were correctly registered as self employed with HMRC, had a business plan, contract documents as evidence and if you have been doing this part-time, details of your trading history/accounts etc.

A problem will be that, when UC come to calculate the date minimum income floor should be applied from, they may use the date you started this self employed trade from. So once you hit the date where you had been trading for 12 months, you will have the minimum income floor applied, which is assumed earnings of £1200 a month. How long have you been trading ? This minimum income floor might be a real problem, as if trading is not going well, you may not have any UC payments to help you survive.

There is nothing stopping you booking an enquiry appointment about self employment at a Job Centre before applying for UC. You would need to go to a Job Centre to request the appointment and then it might be several weeks later before they can see you. But at least you will have opportunity to discuss UC and self employment.

e1993ry

calcotti wrote: »

It will be up to a a Decision Maker to decide whether or not there was ‘good reason’

Thanks for that. Would there be any way to go about providing evidence to back up my claim? Eg seeing a doctor and getting a note about the night shifts and their effect. I’d imagine they won’t just take my word as someone could easily walk in and make up reasons with no evidence.