Universal Credit expenses

Nikster73

I have been completing the monthly income and outgoings for the business.  For the past few months we have not been entitled to any payments.
I keep being told different information from UC customer services.
Can someone help me out.  If we received a furlough payment into the account ( I do not include this as a business income) if the business is paying a salary out of the account of £950 and £400 , do I include this in the other expenses figure??

NedS

If you are a business, and you employ staff, and those staff are currently furloughed, you would report any money you receive from HMRC under the furlough scheme to help pay wages as income into the business, and any wages you pay to staff as expenses out of the business.

Nikster73

I've been advised that you DONT include the furloughed amount paid in by HMRC.  You only include monies paid into the account from companies (invoices) this was advised from a UC work coach.

Nikster73

Is it 5% you take off the furloughed payment? 

calcotti

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

You do not need to report payments into your business from the Coronavirus Job Retention Scheme or any other grants paid to support businesses affected by coronavirus (except the SEISS). (this is in section 1.3)

and

You do not need to report any other money you get from grants paid to support businesses affected by coronavirus. This includes money you may get from the Coronavirus Job Retention Scheme to compensate you for payments made to your furloughed employees. (this is in section 7.1)

Although it is not spelt out, my understanding is that you still include payments made to employees in the normal way.

NedS

Thanks @calcotti, I stand corrected

Icequeen1

calcotti said:

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

You do not need to report payments into your business from the Coronavirus Job Retention Scheme or any other grants paid to support businesses affected by coronavirus (except the SEISS). (this is in section 1.3)

and

You do not need to report any other money you get from grants paid to support businesses affected by coronavirus. This includes money you may get from the Coronavirus Job Retention Scheme to compensate you for payments made to your furloughed employees. (this is in section 7.1)

Although it is not spelt out, my understanding is that you still include payments made to employees in the normal way.

You cannot deduct any expenses that relate to wages covered by a JRS grant.  See https://www.legislation.gov.uk/uksi/2020/522/regulation/2/made 
So you don't include the JRS payments as income, but then you cannot deduct the wages covered by those payments. Anything not covered can of course be included. 

calcotti

Icequeen1 said:

calcotti said:

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

You do not need to report payments into your business from the Coronavirus Job Retention Scheme or any other grants paid to support businesses affected by coronavirus (except the SEISS). (this is in section 1.3)

and

You do not need to report any other money you get from grants paid to support businesses affected by coronavirus. This includes money you may get from the Coronavirus Job Retention Scheme to compensate you for payments made to your furloughed employees. (this is in section 7.1)

Although it is not spelt out, my understanding is that you still include payments made to employees in the normal way.

You cannot deduct any expenses that relate to wages covered by a JRS grant.  See https://www.legislation.gov.uk/uksi/2020/522/regulation/2/made 
So you don't include the JRS payments as income, but then you cannot deduct the wages covered by those payments. Anything not covered can of course be included. 

Thanks, Icequeen. That makes much more sense and is what I initially expected but I couldn't find the reference saying so.  I guess that is actually covered on the page I referenced by this (which I overlooked)

You must not report as expenses something already provided by any other coronavirus support grants.

(It would be easier if government gave the full story in one place!).

calcotti

NedS said:

Thanks @calcotti, I stand corrected

And now so do I!

Nikster73

If salaries are being paid out of the business account it states to include salaries as as expense!  
Is the correct answer to not include furloughed payment as an income, and not include salaries out of the business account as an expense? 

NedS

Nikster73 said:

If salaries are being paid out of the business account it states to include salaries as as expense!  
Is the correct answer to not include furloughed payment as an income, and not include salaries out of the business account as an expense? 

Yes, based on the information provided above by @calcotti and @Icequeen1, or at least not the part of the wages covered by the JRS grant, so you could presumably report any employer contribution towards wages that the company had to cover over and above what was covered by the JRS.