Universal credit- is 10K Small Business Grant treated as income?

money_saver_4

I've just read Universal Credit details how they assess self-employed income. It sounds as though any proceeds into our business bank account are treated as income. We are not entitled to any other help, so Universal Credit was our only hope. But, if I'm right, we will fall through this safety net too. Can someone clarify if I'm correct? Thank you. 

Jeremy535897

Treat it as a capital disregard (the argument is complicated) but set out clearly in your journal that you have received it and when, and that you are not treating it as income for universal credit.

Hesel18

I was in the same position as you, I got contacted by someone from universal credit after my first payment who said they had just received clarity on this subject and that as Jeremy said you put in your Journal that you have received the grant but they don't count it as income it is to keep your business running.

money_saver_4

Great, thank you. Phew! 

justwhat

But surely at end of tax year it could become income or effect income?(we were intending to spend ours so this did not happen) 

Jeremy535897

justwhat said:

But surely at end of tax year it could become income or effect income? 

You don't adjust universal credit at the end of the tax year. However, the grant is taxable as income, and so it will be treated a s a taxable receipt of your self employed business in 2020/21. It will therefore also have consequences for the revision of tax credits claims to base them on current year income that happens every year.

poppy12345

justwhat said:

But surely at end of tax year it could become income or effect income?(we were intending to spend ours so this did not happen) 

No because UC doesn't work that way.

justwhat

Jeremy535897 said:

justwhat said:

But surely at end of tax year it could become income or effect income? 

You don't adjust universal credit at the end of the tax year. However, the grant is taxable as income, and so it will be treated a s a taxable receipt of your self employed business in 2020/21. It will therefore also have consequences for the revision of tax credits claims to base them on current year income that happens every year.

I am on wtc , our wtc is based on last years tax returns. Either way its worth thinking about.

Jeremy535897

Your working tax credit for 2019/20 is revised, based on your actual income for 2019/20, when you provide your figures (which you have to do by 31 July 2020, although you can use estimates to start with).

money_saver_4

Thank you, everyone. Just to confirm for the benefit of anyone else that might be in the same position, UC confirmed to me that the 10K grant does not count as income. But, the amount of UC we got is ridiculously low and we are not allowed to return to work for some time yet. I need to look up some low budget recipes for kids meals...