Will I have to pay back Universal Credit?

mrkat

I claimed UC from March to November and then from December, my small business (sole trader) made a decent amount of money in Christmas sales (the busiest time of year) so I could no longer claim. My Universal Credit 'coach' said something about me having to pay back my past payments as I'd earned over the threshold but I've tried to search this online and can't find anything about it. Does anyone have any advice? 

I was also advised by my accountant to switch to a limited company in January as the business is growing. That means that although my Universal Credit account is £50k positive from Christmas, no more expenses will be able to come out over the year to bring that number down to what it truly is as it's no longer a sole trader business. That means Universal Credit think I have all this money but most of it has gone back to the limited company to pay for things later in the year. I personally still don't have a lot to live on. I've already had my council tax help revoked so if I have to pay back universal credit as well, it will be a real struggle.

calcotti

Provided Everything was correctly reported and the UC correctly calculated at the time you will not have to pay anything back. UC works on a monthly basis. If you have a particularly good month it can affect future months because of surplus earnings rules but it does not affect previous months.

Because UC treats directors of limited companies as self employed and requires business income and expenditure reported on a cash basis I don’t think switching from sole trader to limited company will have much impact (if any). 

If you made a £50000 profit in December it will likely be six  months before you have any further UC entitlement.

mrkat

calcotti said:

Provided Everything was correctly reported and the UC correctly calculated at the time you will not have to pay anything back. UC works on a monthly basis. If you have a particularly good month it can affect future months because of surplus earnings rules but it does not affect previous months.

Because UC treats directors of limited companies as self employed and requires business income and expenditure reported on a cash basis I don’t think switching from sole trader to limited company will have much impact (if any). 

If you made a £50000 profit in December it will likely be six  months before you have any further UC entitlement.

Thanks for this Hopefully, I won't have to claim UC credit again. I've never had to before, even when my earnings were low but I couldn't get help any other way during coronavirus as my business was less than 2 years old. I was just worried, judging by what I understood from my coach and from having to pay back the council tax I was previously exempted from, that they would make me pay back UC as well.