Minimum income floor - uc

Sunnyuk5

I'm a IT contractor. Self employed and employed by the same company. 

I make no profit but pay myself a monthly salary which goes to hmrc via rti feed. I also pay another part time staff a monthly salary.

My universal credit amount gets worked out by filling in a monthly income and expenditure. They also get my monthly paye rti from hmrc and calculate my payment. So my uc payment is mainly based on that paye income as my business makes no profit.

What will happen if minimum income floor gets applied in my case? Will it get applied to my business income rather than my paye salary? For example my business makes £2500 a month. From that I pay myself £2050. Pay the staff £200 and the rest are other business related expenses. I'm worried that uc will calculate my business income by applying the minimum income floor although the expenses are mainly due to staff salary. They will then assume two incomes, one the business mif and the other my paye salary.

Can someone advise?

TELLIT01

If your company makes no profit how are you paying yourself or your employee?  As I understand the Minimum Income Floor, if income doesn't reach that level the company is classed as unviable for benefit purposes so there will be no support.

calcotti

TELLIT01 said:

If your company makes no profit how are you paying yourself or your employee?  

The payment of a salary is a business expense. Profit is calculated after payment of the salary. It makes no profit because s/he is paying her/himself.

Sunnyuk5 said:.. my business makes £2500 a month. From that I pay myself £2050. Pay the staff £200 and the rest are other business related expenses. ..

calcotti

ADM Chapter H4: Earned income - self-employed earnings (publishing.service.gov.uk)
See paragraphs H4060, H4360 onwards particularly H4374, H4375 and H4377.
(I confess I don't fully understand what they mean.)

calcotti

Thinking about this a bit more.
As you are earning above your Conditionality Earnings Threshold you cannot be subject to all work-related requirements and therefore the MIF cannot be applied to you.

tomtom256

So are you a company director, solely in charge of the business?

If so then you should be reporting the whole of the companies income and expenditure at the end of every AP on a cash in and cash out basis.

Any wages would be an allowable expense and woudl be offset against the RTI feed, anythign left over would be your profit (income) or your loss.

The MIF will be the expected hours for your circumstances x NMW. So potentially 35 hpw X NMW, unless you are a primary carer for children, have had a work capability assessment and have been LCW/LCWRA or have caring responabilities.

Have you attended a Gateway Intervention yet and been issued the UCD5?

Sunnyuk5

Hi all,

Yes, my monthly salary is a business expense and at the end I make no monthly profit after all business related expenses are deducted. The salary I pay to myself is what I live on.

I've been on universal credit under this circumstance for the last 6 months with no issues. But was wondering how the mif would be applied in this scenario, if it was to be applied.

I have not had a gateway interview. 

But my work coach told me that the mif will not be applicable to me as my paye salary is above the mif threshold. But is the mif not calculated against the business income? Obviously my scenario is a bit different as I pay myself a salary.

calcotti

Sunnyuk5 said:

But my work coach told me that the mif will not be applicable to me as my paye salary is above the mif threshold. 

As advised in this thread also. Due to your earnings you cannot be put in the all work related activity group and therefore the MIF cannot be applied.

Sunnyuk5 said:

Obviously my scenario is a bit different as I pay myself a salary.

Which is quite common.