Universal Credit asking for last 12 months income - queries, self employed.

Under_the_Radar_2

So, got a confirmed amount from UC today which will be paid into my account on the 5th, but a new item on my to do list has appeared asking for last 12 months income. 
I'm self employed so as most I was on normal money until the lockdown commenced. Not entirely sure why they need it or what they intend to do with those figures, but they want a monthly figure.

Not entirely sure how to go about this, with a lot of my expenses being annual figures and I'm not sure where capital allowances factor into a monthly income. Do i work out a monthly average or leave it out entirely, as I think its something I claim back rather than report is an outgoing, but I might have that wrong.

Any advice? I'm quite tempted to just divide my last years annual profits by 12 and enter the same amount each month, rather than go through and add up different income and outgoing streams for each month, and divide annual outgoings by 12. Am I making this seem more complicated than it needs to be? Just thrown me that they've asked for last years figures after confirming my payment, especially as UC deals with current income, so it wouldn't make a difference if I earnt 10k or 100k last year? 

It's mostly the capital allowance I'm not sure whether to include or not, I'm a taxi driver and recently purchased a new taxi, so it is quite a significant figure, and not really sure how to go about reflecting that in monthly income.

Thanks for any advice. 

[Deleted User]

Might be worth actually speaking with one of their staff and letting them guide you through the grey areas, I know it helped a family member of mine.

Under_the_Radar_2

Catsacor said:

Might be worth actually speaking with one of their staff and letting them guide you through the grey areas, I know it helped a family member of mine.

Yeah thanks, I will contact them if I can't figure it out myself / on here. Just seems hard to get through to anyone on there at the moment.

calcotti

For UC self employed earnings are calculated on a cash basis so it's money in and money out. The reason they ask is because your past earnings effect whether or not the benefit cap can be applied. They shouldn't really ask for this information if your maximum entitlement is going to be well below the cap anyway. 

Jeremy535897

From guidance to DMs:
"H4202 The expenses which may be allowed include
1. regular costs such as rent or wages
 2. purchase of stock
3. utilities, phone and travel costs (but see H4203 as appropriate)
4. expenditure on the purchase, lease or acquisition of
 4.1 equipment
 4.2 tools
5. VAT
 Note: The above is not exhaustive. 1 UC Regs, reg 58(2)
H4203 A deduction cannot be allowed for expenditure on the purchase, lease or acquisition of a car (including a mini cab and taxi but not a black cab or Hackney Carriage)" . 

UC works on a monthly basis, which doesn't really work for capital assets. You treat allowable expenses as a deduction in the month they are paid.

This article https://www.uceplus.co.uk/universal-credit-new-claim-process.html explains why they want to know about previous year's income, and suggests that you can answer to the best of your ability if you don't know. It would be unreasonable to have to recalculate a whole year's trading income under UC rules, as it is done on a monthly cash basis. You could start with your taxable profit for 2019/20 divided by 12.

There are other posters who know a lot more about UC than me, and I hope they see this and add their views.

calcotti

Jeremy535897 said: There are other posters who know a lot more about UC than me, and I hope they see this and add their views.

But I think you now know a lot more about about it than you did a month ago!

Jeremy535897

calcotti said:

Jeremy535897 said: There are other posters who know a lot more about UC than me, and I hope they see this and add their views.

But I think you now know a lot more about about it than you did a month ago!

That wouldn't have been difficult!