Universal credit

lloyd7

Hi, both me and my husband are self employed. We were on family tax credit for one child and received £86 a month. As the government put us on lock down we have zero earnings. Tried contacting tax credit but no answer and believed we had to apply for universal credit instead as we had no earnings and tax credit is based on your income. I declare self employed income as a hairdresser, my husband a taxi driver and I have a buy to let flat which I also declare and pay tax on. Universal credit has decided that I am entitled to zero money as my rental flat is £1046.50 a month. That’s before my buy to let mortgage and service charge are taken out which then gives me a net income of £403, and this amount I will then be taxed on. They have told me that they don’t care about mortgage and service charges. I have no choice in paying the mortgage and service charges, leasehold flat, and tax. I thought your claim would be calculated on your net income not your gross. No one seems to be sure at universal when I have rang,  just saying they don’t pay towards mortgage and service charges, we are expected to live on £403 a month. 

atlantis187

having a second property or saving above 16k usually means zero award for universal credit.
You should have done much more research into this before switching as there is unfortunately no way back to tax credits.

lloyd7

Thank you, we don’t have saving above 16k and I don’t know what research I could have done especially as government was telling self employed to apply for universal credit while waiting for the 80% in June, and there was no answer at tax credit. 

Spoonie_Turtle

A second property is counted as capital https://www.entitledto.co.uk/help/Own-other-property
Unless it's worth below £16000 (unlikely!) any UC payment would have been an overpayment and they'd have recovered it from you when they realised the mistake. While it's incredibly frustrating for you that you can't go back to tax credits, in a way it could have been worse because this way there's nothing for them to make you pay back.

KatrinaWaves

lloyd7 said:

Thank you, we don’t have saving above 16k and I don’t know what research I could have done especially as government was telling self employed to apply for universal credit while waiting for the 80% in June, and there was no answer at tax credit. 

Thats why Atlantis said ‘or’

You have a property as a business investment. A property you rent out and do not live in. That is classed as capital under UC, as benefits are normally to help people who are on low incomes, who tend not to have multiple residences. 

lloyd7

Katrinawaves I completely understood what Atlantis said, I am on no income at the moment not due to any wrongdoing but a pandemic and wrongfully believed UC would help as this was advised by the government. Having “multiple residence” as you put it doesn’t make me wealthy. Perhaps I was stuck with a property with subsidence and unable to sell? 

Spoonie_Turtle

^ there are disregards for certain things, such as property on the market - though once it sold, unless the money were used extremely quickly to buy a house for living in, that would take someone way over the capital threshold too.

There are very good things about UC and bad things about UC, but quite possibly the very worst is that there is no warning that it will end TC claims with no way back onto them. 

For your situation, presumably you'll be eligible for the self-employed income support scheme? You'll have to look for other options to tide you over until that comes into effect, such as decreasing bills or perhaps being able to get some bills deferred for a month or two (I don't know what exactly because that's not my area of knowledge).

sassy_one

Regardless, whatever the condition of the house, it would need to be pretty bad to be below 16k.

You have a second property, you are not entitled.
Benefits are for those who have nothing, let alone two properties. 

I suggest you post on the Property section of the site and consider selling your second one if you are that financially insecure. 

lloyd7

Sassy-one not helpful advice especially as these are not normal circumstances, have you tried selling a property during a pandemic? Do you think it would be successful?  Are people allowed to move? Would it make my tenant homeless? Do you think I want to work or claim UC? Am I allowed to work or have the government put me on lock down? Have I lost all my income? When you say UC are only for people who have nothing, well I have no income apart from £400 for a family for food and bills. No advise was available especially when you look at UC who doesn’t list second property, only savings. 

Spoonie_Turtle

sassy-one said:

Regardless, whatever the condition of the house, it would need to be pretty bad to be below 16k.

You have a second property, you are not entitled.
Benefits are for those who have nothing, let alone two properties. 

I suggest you post on the Property section of the site and consider selling your second one if you are that financially insecure. 

I am not normally one to take offence but that is possibly the most unhelpful 'suggestion' OP will ever receive, not to mention with an unhealthy dollop of judgement with it. Many self-employed people are usually financially secure because they provide services that have pretty constant demand in normal times. These people generally live within their means, with a standard of living a fair way above the mere basics because they normally can well afford it. These are not normal times, the pandemic was not specifically foreseen, how was anyone to know a few months ago that their incomes would drop to 0?!

It is a huge shame that the government told people to claim UC without any kind of disclaimer to do their research first - so many people have fallen foul of the intricacies of UC, along with staff who don't fully understand it, and with an overwhelmed system it's incredibly difficult to get mistakes corrected. 

Sometimes the replies on here can be blunt because the rules are the rules and this is not the board to debate them - but it's also not a board for judgement or blatantly unhelpful suggestions.

One possibility would be to seek some temp work, delivery driving or working a supermarket or some essential work like that.

lloyd7

Spoonie_Turtle thank you, it’s frustrating as normally you would be able to get advise over the phone. Had no idea I wouldn’t be able to go back on tax credit. I have to pay my mortgage and service charges otherwise I will get a 4% above base rate penalty, left over just about pays food. Can’t pay any other bills at the moment and am praying that the 80% will come through beginning of June. Tried asking UC about that scheme but they didn’t know when I would be getting it.  This pandemic will definitely destroy a lot of people!