Universal Credit - more than £6000 in savings but also in debt?

calcotti

So the £10,000 is a business asset which should be ignored for UC.

NedS

Solid_Bruce said:

I am a self employed writer, have been out of work since March and then got on UC in April.

Bounce back loan taken through business account and was eligible because was making money last year.

Business is just me, not assets.

Credit card is personal debt taken out for stoozing.. to take advantage of interest free period to put money into savings account. 

The 13k is made from the 10k loan and personal money

Hope this is more clear

The £10k bounceback loan (or whatever you have left of it) can be disregarded as a business asset, but you must still declare it but make sure UC are aware it's a business asset. If you have separate business and personal bank accounts, and only use them accordingly, this should make it far easier for you to provide the necessary proof.

If the £13k consists of £10k bounceback loan (disregarded), then you have £3k or personal assets.  But you said you have £8k in credit card debt taken out for stoozing into savings. Where is this £8k of savings?

I'm also struggling to understand why a self employed writer would need a £10 bounceback loan? What costs did you have that you couldn't meet due to Covid-19? Also, if you needed the loan, why do you still have the cash - why hasn't it been spent on whatever costs the business had which you took the loan to cover?

Grumpy_chap

The business assets should be in a business bank account to avoid them being mixed up with personal assets.  The BBLS should be offset against the business assets.

Solid_Bruce

NedS said:

Solid_Bruce said:

I am a self employed writer, have been out of work since March and then got on UC in April.

Bounce back loan taken through business account and was eligible because was making money last year.

Business is just me, not assets.

Credit card is personal debt taken out for stoozing.. to take advantage of interest free period to put money into savings account. 

The 13k is made from the 10k loan and personal money

Hope this is more clear

The £10k bounceback loan (or whatever you have left of it) can be disregarded as a business asset, but you must still declare it but make sure UC are aware it's a business asset. If you have separate business and personal bank accounts, and only use them accordingly, this should make it far easier for you to provide the necessary proof.

If the £13k consists of £10k bounceback loan (disregarded), then you have £3k or personal assets.  But you said you have £8k in credit card debt taken out for stoozing into savings. Where is this £8k of savings?

I'm also struggling to understand why a self employed writer would need a £10 bounceback loan? What costs did you have that you couldn't meet due to Covid-19? Also, if you needed the loan, why do you still have the cash - why hasn't it been spent on whatever costs the business had which you took the loan to cover?

£8k of stoozing, I guess theres £3k left still stoozing.  £5k spent surviving, living costs I guess.

£10k taken out in case I run out of money to pay for food and living costs.  Then maybe make some small investments because I have no idea when I'll be at work again.  Was thinking about buying a bike or moped to deliver food.

I think the questions are getting a bit offtrack but I'm willing to answer any questions to get a better understanding of how UC works.

Grumpy_chap

If the £10k is in a separate business account, it is easier to get that identified as business cash flow and not part of your personal assets.  Anyway, there is a £10k liability to offset against that balance.

NedS

Solid_Bruce said:

£10k taken out in case I run out of money to pay for food and living costs.  Then maybe make some small investments because I have no idea when I'll be at work again.  Was thinking about buying a bike or moped to deliver food.

I think the questions are getting a bit offtrack but I'm willing to answer any questions to get a better understanding of how UC works.

The questions are really relevant to which assets are deemed personal and which assets are business assets and can be disregarded if they are essential to the running of the business. Not all business capital can be disregarded by default - it must be deemed essential to the ongoing running of the business.

For example, take your bounceback loan. From what you have described, this capital does not appear to be essential to the running of your business, therefore may not be disregarded as capital essential to the running of the business if you are merely using it to provide an income. Examples of essential business capital that can be disregarded include capital being used to pay business rent of business premises, or capital used to purchase stock essential to the ongoing running of the business. You seem to have taken out a business loan for personal use.

poppy12345

NedS said:

Solid_Bruce said:

£10k taken out in case I run out of money to pay for food and living costs.  Then maybe make some small investments because I have no idea when I'll be at work again.  Was thinking about buying a bike or moped to deliver food.

I think the questions are getting a bit offtrack but I'm willing to answer any questions to get a better understanding of how UC works.

 You seem to have taken out a business loan for personal use.

I have no idea but couldn't that cause problems if they found out it wasn't needed for the business?

Grumpy_chap

I think this shows the importance of separate bank account for the business.  The business would then have £10k cash in bank plus £10k liability for the BBLS.  OP can truthfully report the business as nett assets zero.
@Jeremy535897 may be able to comment on disregard of business assets for UC.

calcotti

Grumpy_chap said:

I think this shows the importance of separate bank account for the business.  The business would then have £10k cash in bank plus £10k liability for the BBLS.  OP can truthfully report the business as nett assets zero.
@Jeremy535897 may be able to comment on disregard of business assets for UC.

For UC business assets are not reported like this anyway so it's not relevant. 

Grumpy_chap

Which is what you said above and I agree:

calcotti said:

So the £10,000 is a business asset which should be ignored for UC.

But the OP does not seem to be getting the £10k ignored in the assessment.