minimum income

NedS

Alice_Holt said:

Re:   https://forums.moneysavingexpert.com/discussion/6305749/minimum-income-floor-is-it-gross-or-net#latest

(Your second thread asking the same Q as this thread)


Neither.   
  The minimum income floor is an assumed level of earnings that the Department for Work and Pensions (DWP) uses to calculate benefit payments for self-employed people.

Technically it's Net. The figure is based on national minimum wage x 35h less tax and NI (hence net) to represent the amount someone would take home on national minimum wage. And of course UC is based on net earnings after tax and NI contributions have been deducted, so any earnings above the MIF that are to be taken into account would be based on net earnings after tax an NI have been paid.

seatbeltnoob

calcotti said:

I think you are still missing the point. The MIF doesn't mean you have to earn anything in particular - it simply means that if you earn less than £1227.50 you are treated as if you have. .

I think it does, it means that every self employed claimant needs to earn at least the minimum wage on full time salary otherwise they will get into debt trouble fast. if you're not earning at least the MIF amounts you will need to do so desperately.

seatbeltnoob

uberdriver95 said:

thank you everyone for your responses,

yes I am gainfully self employed hence I have the MIF in place. I been stressing all day. I have come to the conclusion that the balance at the end of deduction has to be 1227.50 or greater in order for my UC award to be higher. is this correct?

you profts (takings, less expenses) need to be at least £1227.50. You are right, that is a minimum goal you now need to achieve per month. If you do not make that much, that means you're going to quickly fall into money troubles because your earnings + UC payments will be below what the UC expects you to have as a bare minimum.

Consider a job or put more hours in the cab so you can get your profit to £1227.50 pcm

calcotti

seatbeltnoob said:

calcotti said:

I think you are still missing the point. The MIF doesn't mean you have to earn anything in particular - it simply means that if you earn less than £1227.50 you are treated as if you have. .

I think it does, it means that every self employed claimant needs to earn at least the minimum wage on full time salary otherwise they will get into debt trouble fast. if you're not earning at least the MIF amounts you will need to do so desperately.

There is a difference between what the benefit rules require, which is what OP was asking about, and the practical necessities involved in getting enough money to pay the bills.

calcotti

seatbeltnoob said:

uberdriver95 said:

thank you everyone for your responses,

yes I am gainfully self employed hence I have the MIF in place. I been stressing all day. I have come to the conclusion that the balance at the end of deduction has to be 1227.50 or greater in order for my UC award to be higher. is this correct?

you profts (takings, less expenses) need to be at least £1227.50. You are right, that is a minimum goal you now need to achieve per month. 

That may be a practical necessity but is not required by DWP. OP appears to have though that if they meet this figure they will get a full UC payment and that is not the case.

seatbeltnoob

Yes I can see OP asumed takings (revenue) is the same as earnings. But actually earnigns should be their profit. The practical necessary is what affects OPs means,so I would say that is crucial.

The 649 mileage IMHO is just too little. someone whose leasing a taxicab for £849 a month really needs to crank up the mileage and put in the hours to get a better ROI. Most taxi drivers are doing 30-40K miles a year. I appreciate as a single parent they have to be at home with kids and evening times is when taxi-ing pays off. But that's for the OP to navigate. Maybe taxi driving just isn't suitable job for a single parent and are better off with a job in a supermarket or something.

Also someone else pointed out the leasing a taxi isn't an allowable expense for UC. I don't know myself if that is the case. But it would make sense that it isn't an allowable expense because there is an overlap in expense between the mileage claim and leasing cost.

The leaser does not pay for the upkeep and maintenance of the vehicle with taxi cabs. The mileage rate covers the fuel cost + deprecations, maintenance, insurance etc.

I could be wrong, but those PCO hire vehicles with £200+ weekly cost are all inclusive. Brakes, Tyres, Insurance are all included in the cost.  I presume they are warrantied by the leasing company and you dont pay for mechanical breakdowns either.

So if a claimant was to claim the PCO hire cost AND mileage, they would in effect be double claiming for expenses and making a profit on the mileage allowance.

seatbeltnoob

Please see here: https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/calculating-income-from-self-employment/

Read up a bit, the person who pointed it out earlier is correct

No deductions are allowed for:
Expenditure on the purchase, lease or acquisition of a car (see below for details of flat rate expenditure that can be deducted)

You need to use mileage rate only.

You need to take care of this ASAP, because if you get reviewed by the jobcentre and they see this, they might go all the way back and want to claw back previous overclaims.

I can understand the confusion because when you google stuff like "Universal credit self employed allowable expense" the top result is the HMRC one for income tax treatment. Not UC treatment.