Universal Credit Self Employment earnings before or after tax and NI

itisgeorge

Hello,
Handling this for a family member. A little background: They have both PAYE income and self employment, and have received payments as part of the furlough self employment scheme.

This is another one of those Universal Credit questions that should be clear, but I've found the how to guides a bit confusing, and have asked questions on the journal but have received two contradicting answers so not really sure where to turn.

It forms two questions that I'm not clear about, the first being when reporting self employment income month to month, I'm asked for income, expenses and Tax/NI payments. All is clear except the Tax/NI question, it vaguely asks "how much tax and National Insurance you paid". Now I wasn't sure if this meant how much tax and NI was paid on the income I'm reporting for the month in question, or how much has been paid to HMRC that month for a tax bill. If it's the latter in most cases this will usually be one particular month of the year. So far I've assumed this and and have been entering 0 in the tax/NI box. Have I incorrectly assumed this?

The second question is somewhat related to the first, but this time it's to answer the "Confirm previous earnings from work question", which covers the last 11 months broken down month by month. The only other clue to this question is that "You'll find this on your payslips or bank statements.", so for PAYE this'll be after tax, but what about additional self employment earnings. I won't know the month breakdown after tax/NI even after completing a tax return so I'll be before tax/NI which won't be right. I asked this via my journal and got referred to the Universal how to guide and was told all the inputs are after tax/NI. Very lost.

Hope this makes sense, and someone is able to guide me in the right direction!

Cheers,

huckster

Tax and NI is reported in the assessment period it was actually paid in.    It will state on the report income & expenses, what the assessment period dates are.  So should be straightforward to answer what tax was paid within the date range,

Confirm previous earnings is the net total earnings received during each month requested.   The confirm previous earnings information is to assess whether the claimants have earned over a threshold amount each month, in order for a Benefit Cap grace period to be applied.

itisgeorge

huckster said:

Tax and NI is reported in the assessment period it was actually paid in.    It will state on the report income & expenses, what the assessment period dates are.  So should be straightforward to answer what tax was paid within the date range

When you say period it was actually paid in, that's an actual payment to HMRC to settle the bill? So generally it would be 0 until you come to pay the bill if I'm understanding correctly.

huckster said:

Confirm previous earnings is the net total earnings received during each month requested.   The confirm previous earnings information is to assess whether the claimants have earned over a threshold amount each month, in order for a Benefit Cap grace period to be applied.

Interesting ok. I'll have to get Googling the best way to work this out. It seems this isn't straight forward for the average person because the tax/NI is worked out across the tax year, of which isn't over yet for some of the months they're requesting. Unless I'm being really oblivious!

Thanks for your help, appreciate it

NedS

itisgeorge said:

When you say period it was actually paid in, that's an actual payment to HMRC to settle the bill? So generally it would be 0 until you come to pay the bill if I'm understanding correctly.

Correct. If you pay your tax and NI annually to HMRC, you would report £0 for 11 months of the year, and in the month you actually make the payment to HMRC, you would report how much you have paid.

You are always reporting any monies in or out of the business within the dates requested (the last Assessment Period or AP). It does not matter when those monies may relate to.

whizzywoo

I believe you can arrange to pay your Income Tax and NI on a monthly basis in advance.  That would be much better for self employed people on UC.