Mileage allowance reducing universal credit.

huckster

Reporting as self employed is not a solution. They will fail to be recognised as self employed, when a Work Coach runs through a self employment verification  process. 

Icequeen1

DropZone1 said:

Icequeen1 said:

DropZone1 said:

A solution would be to declare yourself self-employed through Universal Credit and each month declare £nil earnings but expenses of whatever your mileage is. Although it will be at a flat rate of 45p a mile for the first 833 miles and then 25p for miles 834 and  beyond. 

That wouldn't be a solution. The OP isn't self-employed. 

It absolutely is a solution. There's no rule to state you have to be actively self-employed in order to be declared as self-employed. Many people on Universal Credit are declared self-employed and report £0 earnings every month. It would be a viable work around if he isn't successful in getting his employer to report the information directly to HMRC as there isn't a cat in snowball's chance UC will grant a Mandatory Recon as taking into account earnings as reported to HMRC isn't a 'decision' UC have made so from their perspective there's absolutely nothing to reconsider unless it becomes unreasonable to expect the claimant to resolve the issue through their employer, which I cannot see applies.

The options are;

1) to get employer to update HMRC records,
2) declare himself S/E to UC and declare £nil S/E income but declare mileage as expenses
3) Suck up the loss

No, that is incorrect. There is no specific rule saying you have to be actively self-employed BUT Regulation 57 states that self-employed earnings must be derived from carrying on a trade, profession or vocation. The OP isn't doing that and there is no way he can argue he can because DWP generally follow the HMRC 'badges of trade' principles in establishing whether there is a trade, profession or vocation. Reg 57 also only applies for calculating earned income that is not employed earnings - so again couldn't apply in this situation. 
Even if that were not true....and the OP could do what you say and declare Nil earnings every month and declare the mileage as expenses. What good would that do him? It would create a loss on self-employment and that loss can only be set off against future profits of the trade. He doesn't have any to offset it against - they can't be offset against employed earnings. 
There is a decision each month on his UC award, which carries appeal rights. Regulation 61 of the UC Regs allows for DWP to depart from using the RTI data in certain circumstances including where the information received from HMRC fails to reflect the definition of employed earnings in regulation 55 in some material respect. As it does in this case. Reg 61 has been successfully used in Tribunal cases. 

So no, it isn't a viable workaround in any way. 

DropZone1

huckster said:

Reporting as self employed is not a solution. They will fail to be recognised as self employed, when a Work Coach runs through a self employment verification  process. 

There is no self-employed verification process.

The only verification process that exists is whether someone is gainfully self-employed or not, which is to determine whether a minimum income floor would be required. UC does not tell people they cannot declare themselves as self-employed. The only purpose of being S/E is to declare income and expenses that aren't put through the RTI feed. The example of OP would meet that need.

All verification is based around whether it is appropriate to apply a minimum income floor not whether it is appropriate for the customer to be registered as S/E. All the latter matters to UC is that it'll automatically ask the customer to report S/E income and expenses at end of month. Outside of that it makes no difference which is why "you can't register as self-employed" is something no Work Coach or Case Manager who knows what they're talking about will ever say. 

Icequeen1

DropZone1 said:

huckster said:

Reporting as self employed is not a solution. They will fail to be recognised as self employed, when a Work Coach runs through a self employment verification  process. 

There is no self-employed verification process.

The only verification process that exists is whether someone is gainfully self-employed or not, which is to determine whether a minimum income floor would be required. UC does not tell people they cannot declare themselves as self-employed. The only purpose of being S/E is to declare income and expenses that aren't put through the RTI feed. The example of OP would meet that need.

I hope you aren't a UC adviser....that might be the only verification process. And income not put through the RTI feed is not self-employed earnings - it is still covered under the employed earnings provision in the Regulations. As I said above - self-employed earnings only includes those that derive from a trade, profession or vocation and you can't offset self-employed earnings against employed. 

huckster

Icequeen1 said:

DropZone1 said:

huckster said:

Reporting as self employed is not a solution. They will fail to be recognised as self employed, when a Work Coach runs through a self employment verification  process. 

There is no self-employed verification process.

The only verification process that exists is whether someone is gainfully self-employed or not, which is to determine whether a minimum income floor would be required. UC does not tell people they cannot declare themselves as self-employed. The only purpose of being S/E is to declare income and expenses that aren't put through the RTI feed. The example of OP would meet that need.

I hope you aren't a UC adviser....that might be the only verification process. And income not put through the RTI feed is not self-employed earnings - it is still covered under the employed earnings provision in the Regulations. As I said above - self-employed earnings only includes those that derive from a trade, profession or vocation and you can't offset self-employed earnings against employed. 

That is correct.  Even if the OP reported that they were both employed and self employed or just self employed, UC will still receive the RTI from the employers and the S/E income/expenses just showing the mileage expenses, would have no impact on the earnings being considered by UC .i.e. expenses would not be deducted from the RTI amount reported.

When @DropZone1 says there is no self employment verification process, what they are talking about is the temporary Covid-19 process. It should still be the case, that the claimant is asked about whether they have correctly reported the right type of employment, by just asking about how they are employed.  Are they totally working for themselves or are they working under any form of contract, where an employers might report earnings via HMRC.  Otherwise there is a risk that UC will have duplicate earnings reported, if the claimant reports  through income/expenses reporting and employers also reports via RTI.  

nataliemillereb09

Robbo682 said:

I've recently started claiming UC for what would have been child tax credits under the old system after getting divorced.
I use my own vehicle for work paying for my own fuel tires etc. I am reimbursed through the government mileage allowance scheme. 45p per mile, I can only claim for business journeys essential for performing my duties. This is tax free and I recieve the full amount in my net salary. My payslip shows the separate amount for business miles. The problem comes when the DWP simply take the total net payment for the month and reduce my credit by 63p in the pound. I have asked if this is correct as it leaves me out of pocket but DWP won't answer that question. They say speak with my employer and the hmrc as they just take the feed direct from them.
Hmrc says check with your employer. My payroll dept are very polite and agree that it is reimbursement not income but effectively  just give me a blank expression and shrug.
Does anyone else have experience of this? 

Did you manage to get this sorted? I’m in the same situation 🙁

calcotti

nataliemillereb09 said: Did you manage to get this sorted? I’m in the same situation 🙁

OP has not been on the site for 6 months so is unlikely to respond.

nataliemillereb09

calcotti said:

nataliemillereb09 said: Did you manage to get this sorted? I’m in the same situation 🙁

OP has not been on the site for 6 months so is unlikely to respond.

Oh I thought they might have got a notification 

poppy12345

nataliemillereb09 said:

calcotti said:

nataliemillereb09 said: Did you manage to get this sorted? I’m in the same situation 🙁

OP has not been on the site for 6 months so is unlikely to respond.

Oh I thought they might have got a notification 

Even if they did that doesn't mean they will return to answer your question.