Why is UC asking me to "confirm earnings from previous work"? / self employed

theone999

After filling in the first report of income and expenses for self employed claim, it seemed to go through ok even though I had to give best estimate. but then I thought i might have made a mistake on the expenses. So clicked on change of circumstances, but realised it wasn't the right bit, so I cancelled it, logged my concern in the journal then rang the hot line.

While that initial expenses query was answered I suddenly got a request to "confirm earnings from previous work". The questions are like did you ever earn less than £430 in any of the past 12 months then they asked me how much I earnt each month with 13 boxes April 19 to Apr 20. I don't understand why it's asking me that and I couldn't find much information about it. I was self employed before that as well. I don't know what to put because I'm not due to see my accountant until January to submit tax return to HMRC and I don't know how to work it out. I also had trouble doing the past months but it didn't matter because it was a loss due to no jobs / trade so I put a best estimate in. My accountant says he's not seeing anyone currently due to lockdown/isolation and I've been trying to find some of the expenses from suppliers but some of those have shut and there's no one to answer my queries. I never understood properly how to work out my accounts as I hired an accountant and I don't understand UC's guide. I'm not even sure if UC measures taxable income and accounts the same way an accountant or HMRC will. There is no payslip from month to month and because it hasn't been submitted to the tax office as as return for January 30th next year.

Has anyone else had this problem? I don't understand why they're asking for this, I'm not earning anything right now, in fact I'm making a loss and and I don't have savings above 6k.

calcotti

It is a test to determine whether or not the benefit cap needs to be applied if your potential benefit entitlement goes over the threshold. If prior earnings are higher enough there is a grace period before the benefit cap is applied.
https://www.entitledto.co.uk/help/benefits-cap

theone999

calcotti said:

It is a test to determine whether or not the benefit cap needs to be applied if your potential benefit entitlement goes over the threshold. If prior earnings are higher enough there is a grace period before the benefit cap is applied.
https://www.entitledto.co.uk/help/benefits-cap

I've been trying to work out from my records and I know HMRC doesn't ask for month by month expenses as it's annualised but if it did, then I definitely would have made a lot less than 430 in January, as there would have been no way I could have earnt more than that even with incomplete expenses information right at this moment given consumers are generally skint after the new year and there were unexpected bills to pay for suppliers. I still wouldn't be able to put an exact figure on it as I would need the help of my accountant, but this then causes a new problem.

If instead I select that in the past 12 months, I did make less than £430 in any month. Then on the next pay it says "You earned less than £430 a month", which is can't be true, I would have earnt more than £430 most months. 

I don't get it and it's causing me massive amounts of stress. All I wanted was to make enough money by working to live on before corona

TELLIT01

The question of why they want the information really doesn't matter.  You need to provide the requested information or risk you UC payments stopping.  I understand that you can't see any reason for the request, but please just do as they ask.

lloyd7

I have the same problem and as stated the question is did you and your partner earn less than £430 in any month before claiming UC, well yes we did as we had no earnings in March and April, so if I click yes then it states that we earned less than £430 a month which isn’t true. It’s not that I don’t want to provide the information I can’t give monthly earnings for the last year as like you they are with the accountant who currently isn’t working. Honestly the most stressful thing I have ever tried to do. Like you I can give the yearly earnings from the previous tax year but not for the past 12 months as they are not done yet. 

Spoonie_Turtle

The year before I claimed, I had most months on full pay then a few on half pay which took me under the £430 so I had to click the Yes and it told me the same, "You earned less than £430 a month" - it should have said 'you earned less than £430 in one or more months' but precision/nuance in the application process is not exactly where DWP excels. It doesn't really matter though because once you put the figures in for each month they can see clearly what's what.

Your priority needs to be some reasonable estimate of your profits (UC for self-employment works on the basis of "income - expenditure = profits", which is apparently different from what you send to HMRC anyway) so you can fill in the boxes. I understand from your posts that it might be difficult but you have to just try your best and then you can leave a note on your journal explaining your situation.

huckster

You don't have to provide the confirm previous earnings information straightaway.   What happens is that you will get a benefit cap grace period for the first assessment period, as the confirm previous earnings to-do is still outstanding. 

 When the confirm previous earnings to-do is not completed by the end of the first assessment period, if the first assessment period would have been affected by the benefit cap, but was not due to a temporary grace period, is that an overpayment debt is created.  This overpayment debt would be referred to DWP Debt management at some point and arrangements made to collect it e.g. deductions from future benefit awards.
For the second assessment period and any subsequent assessment period with the confirm previous earnings information to-do still outstanding, the temporary benefit cap  ( if it applies) grace period will be removed, affecting how much award is due to be paid.
When eventually you are get around or are able to provide the confirm previous earnings information, the UC system will calculate whether you were entitled to the benefit grace period for any of the assessment periods and if you are eligible, it will come up with any underpayments that may be owed. And it will tell you on statements for how long the benefit cap grace period applies. 

The confirm previous earnings to-do will not put a stop on the UC claim, if not completed, but it could cause the issues mentioned.   Just complete the information as soon as possible.  Send a journal note, just explaining that until you have the earnings information available you are unable to complete the to-do.

calcotti

Bear in mind that most claimants are not affected by the benefit cap anyway. It is those with children and rent to pay who get affected - although more people may be caught by it now due to the temporary allowance increases.

tomtom256

lloyd7 said:

I have the same problem and as stated the question is did you and your partner earn less than £430 in any month before claiming UC, well yes we did as we had no earnings in March and April, so if I click yes then it states that we earned less than £430 a month which isn’t true. It’s not that I don’t want to provide the information I can’t give monthly earnings for the last year as like you they are with the accountant who currently isn’t working. Honestly the most stressful thing I have ever tried to do. Like you I can give the yearly earnings from the previous tax year but not for the past 12 months as they are not done yet. 

So you should have answered yes  you have had a break in your employment in the past 12 months, which is one of the questions prior to this.

lloyd7

tomtom256 oh I didn’t realise that. You just read it and think well I haven’t had a break but obviously because of lockdown I have had a break.