Universal credit - inputting company expense

tomtom256

So your assessment period is say 15th of first month to 14th of the next. Any income received and any expenses paid by the business between those dates needs to be delcared on the 14th in the relevant to-do that willl be generated fro completion.

It makes no difference if the money was for work carried out 1 month or 12 months ago, if it was received in the assessment period for July say, you would declare it was received on the 14th July. If it was received today for instance, you would delcare it on the 14th August, as you are now in a new assessment period.
Same would go for expenses, so if material was purchased 1 month or 12 months ago you wouldn't be able to delcare it as an expense in July, but if you purchased the material's in July's assessment period, you would delcare the expenses at the sametime as the income on the 14th July.

Your award will then be calculated on the difference minus any applicable earnings disregards, but would include any other income a partner may be receiving.

Spoonie_Turtle

Nikster73 said:

I have a better understanding of it now.  My only mis-understanding is because the £5k pain into the business account in July, is from work carried out when we were not claiming UC.  For example Feb/March 20.  Would I still have to input the whole amount?  I wouldn't have thought so?  but dont want to make any errors and have to pay any money back. 

I do understand the sticking point, but the answer is the same. UC does not make any distinction. It's exactly the same for people on UC who receive tax refunds for before they were claiming, for those who are paid final wages for work done wholly before they claimed, etc.

huckster

Self employed claimants may be struggling to understand how to report income and expenses, because due to Covid-19, they are not having the Job Centre appointments, where they can have the hours conversation.  And often the Work Coaches would  have kept an eye on what was being reported and have follow up conversations.   But given the numbers of claims, this is much more of a challenge.
Perhaps Nikster73 should be requesting a phone appointment via their journal with a Work Coach to discuss their self employment income and expenses reporting, as this may help avoid reporting mistakes, which could lead to an over-payment debt.

Nikster73

Can I ask. When submitting expenses do you include home rental? 8f the house you are renting is used as your office.  At present I have submitted income details, invoice payments into the account.  For expenses, I am submitting.  Fuel, insurance, phone, workwear and tools. I'm not inputting  gas, electricity costs etc, should I be? 

calcotti

Nikster73 said:

Can I ask. When submitting expenses do you include home rental? 8f the house you are renting is used as your office.  At present I have submitted income details, invoice payments into the account.  For expenses, I am submitting.  Fuel, insurance, phone, workwear and tools. I'm not inputting  gas, electricity costs etc, should I be? 

No. the support for your home rent is included in the housing element. If your fuel, phone etc are all household expenses I am sure you can't count these as business expenses so think you are correct not to include them.

NedS

Nikster73 said:

Can I ask. When submitting expenses do you include home rental? 8f the house you are renting is used as your office.  At present I have submitted income details, invoice payments into the account.  For expenses, I am submitting.  Fuel, insurance, phone, workwear and tools. I'm not inputting  gas, electricity costs etc, should I be? 

As Calcotti said, you can not include your rent. You must only declare permitted business expenses essential to the running of the business, not personal expenses.

You should take time to read the guidance here:

https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/how-to-report-your-earnings-from-self-employment

Under 7.3 Flat Rate Deductions you will see:

Using your home for your business

If you use part of your home for your self-employed business like providing services to a customer for example as a hairdresser, or general business administration essential for the daily operation of the business like for example:

• filing invoices, recording receipts and payments
• stock taking
• sales and marketing

You can deduct expenses for heating and lighting at the following flat rates for each assessment period:

• £10 for at least 25 hours, but no more than 50 hours;
• £18 for more than 50 hours, but no more than 100 hours;
• £26 for more than 100 hours

You are not allowed to offset using your home for:

• storage
• completing tax returns for HMRC
• self-reporting your earnings for Universal Credit
• being on call
• being available to carry out work

So you may be able to claim a set amount per month for use of your home for your business. However, as you rent, does your tenancy permit you to conduct business from your home? If not, it might be difficult for you to justify claiming it as a business expense as you would be in breach of the terms of your tenancy.

calcotti

NedS, that's really useful - I wasn't aware of those flat rate allowances.

NedS

calcotti said:

NedS, that's really useful - I wasn't aware of those flat rate allowances.

That is the information that is posted to every claimant's journal when they declare they are self employed, although many don't appear to read it. It's also the information a Work Coach will go though at a Gateway appointment when someone declares they are self employed, although obviously those are not happening at present due to Covid-19 restrictions.

People will still need to evidence the hours spent though, so where they may normally claim £10/month for 25h/month completing invoices and filing receipts, if they are not currently working due to Covid-19, it would be difficult to justify the need to spend 25h/month when there are no invoices and/or receipts to file.