Universal Credit and Flat rate Mileage

Skiip40

Hi all, 
 I am a self-employed taxi driver drives for Uber and my gross income comes staright in my Bank account nothing hidden I am claiming universal credit.  I would like to find out if there is anybody else in my situation. My work coach has advised me that I cannot claim for business expenses my phone bill which I use to receive work and car-rental as I hire the car.  Does anyone know what exactly one can claim from if you are self-employed taxi driver claiming universal credit? If you do where can I get this information? I have looked through the guidelines and the guidelines state one can claim for different things through self-employment universal credit UCD5 namely  

the total amount your business received, how much your business spent on different types of expenses, such as travel costs, stock, equipment and tools, work clothing and office costs how much tax and National Insurance you paid, any money you paid into a pension 

yet my work coach says I can’t claim for this any advice? 

 As a taxi driver i can only claim my mileage and nothing else?by this formula I will leave with nothing at the end of the month
Thanks 

Spoonie_Turtle

This document may help https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1079323/admh4.pdf

Permitted expenses H4197 - H4329, p.43 onwards

You may not be able to claim the car hire:

H4203 A deduction cannot be allowed for expenditure on the purchase, lease or acquisition of a car (including a mini cab and taxi but not a black cab or Hackney Carriage)


Your phone bill could be a grey area, unless it's a specific work phone:

Expenses for both business and private use
H4206 If expenditure is for both business and private use the claimant should apportion the cost, where applicable in reference to any apportionment agreed with HMRC or based on the claimant’s own judgement. Only the portion of the expenditure that is wholly attributable to the business can be deducted.

I guess one way of looking at it would be to consider how much your phone would be costing you if you didn't use it for work, whether would you be on a different plan or not.

huckster

Universal Credit is not there to support people earning below national minimum wage for the hours they work.

At some point, if you were found gainfully self employed, you will have a minimum income floor applied to your claim. Based on 35 hours per week, this could mean the minimum earnings UC will use to calculate monthly awards would be about £1300.

Can you earn about £1300 a month net after business related expenses ?

If you are not able to earn £1300 a month net from working full-time, perhaps you need to think about alternative employment options ?

slowcars

huckster said:

Universal Credit is not there to support people earning below national minimum wage for the hours they work.

At some point, if you were found gainfully self employed, you will have a minimum income floor applied to your claim. Based on 35 hours per week, this could mean the minimum earnings UC will use to calculate monthly awards would be about £1300.

Can you earn about £1300 a month net after business related expenses ?

If you are not able to earn £1300 a month net from working full-time, perhaps you need to think about alternative employment options ?

Is that all?

Back in 1990 whilst employed before I retired, I was taking home that monthly figure every week. Since then, we are currently getting over £700 a week including state pension and other benefits including Pension Credit.

seatbeltnoob

yeah taxi driving his a difficult gig, especially with UC.

Your monthly lease cost is some £900pcm but you cannot cliam that as an expense. you can only claim the 45p/25p mileage. Youw ill never cover your lease cost with mileage because at 25p a mile you'll have to drive an ungodly amount of miles to cover the £900 lease costs.

They haven't taken into consideration the realities of taxi driving when coming up with the rules. Especially in London where you need to drive a car 6 year old or newer which means everyone is leasing at weekly rates and nobody wants to buy their own car on finance and wreck it by taxi work.

tomtom256

seatbeltnoob said:

yeah taxi driving his a difficult gig, especially with UC.

Your monthly lease cost is some £900pcm but you cannot cliam that as an expense. you can only claim the 45p/25p mileage. Youw ill never cover your lease cost with mileage because at 25p a mile you'll have to drive an ungodly amount of miles to cover the £900 lease costs.

They haven't taken into consideration the realities of taxi driving when coming up with the rules. Especially in London where you need to drive a car 6 year old or newer which means everyone is leasing at weekly rates and nobody wants to buy their own car on finance and wreck it by taxi work.

The government has considered the realities, they have decided that they will no longer support a non-viable business for any longer then 12 months.

seatbeltnoob

tomtom256 said:

seatbeltnoob said:

yeah taxi driving his a difficult gig, especially with UC.

Your monthly lease cost is some £900pcm but you cannot cliam that as an expense. you can only claim the 45p/25p mileage. Youw ill never cover your lease cost with mileage because at 25p a mile you'll have to drive an ungodly amount of miles to cover the £900 lease costs.

They haven't taken into consideration the realities of taxi driving when coming up with the rules. Especially in London where you need to drive a car 6 year old or newer which means everyone is leasing at weekly rates and nobody wants to buy their own car on finance and wreck it by taxi work.

The government has considered the realities, they have decided that they will no longer support a non-viable business for any longer then 12 months.

It's not non-viable. And it actually doesn't address the realities.

Tax driver may have

Takings of £3500 /month

Lease cost of £900 month

2000 miles drive in one month

£440 paid at the pump for the fuel.

The taxi driver has made a profit of £2160 for this period just in pure cash terms.

Universal credit rules say their profit from self employment is £3500- £649.94 = £2850.06

That's a pretty big discrepancy there. One is considering the reality, the other isn't.

I'm sure many taxi drivers are "adjusting" this decrepancy by padding the mileage claims and I can't blame them for that.

seatbeltnoob

If one's lease is £900 month and car's fuel costs 22p a mile (typical), they'll never ever reach a point where mileage allowance will cover their motoring costs, after 833 miles, the mileage rate drops to 25p a litre.

tightauldgit

seatbeltnoob said:

tomtom256 said:

seatbeltnoob said:

yeah taxi driving his a difficult gig, especially with UC.

Your monthly lease cost is some £900pcm but you cannot cliam that as an expense. you can only claim the 45p/25p mileage. Youw ill never cover your lease cost with mileage because at 25p a mile you'll have to drive an ungodly amount of miles to cover the £900 lease costs.

They haven't taken into consideration the realities of taxi driving when coming up with the rules. Especially in London where you need to drive a car 6 year old or newer which means everyone is leasing at weekly rates and nobody wants to buy their own car on finance and wreck it by taxi work.

The government has considered the realities, they have decided that they will no longer support a non-viable business for any longer then 12 months.

It's not non-viable. And it actually doesn't address the realities.

Tax driver may have

Takings of £3500 /month

Lease cost of £900 month

2000 miles drive in one month

£440 paid at the pump for the fuel.

The taxi driver has made a profit of £2160 for this period just in pure cash terms.

Universal credit rules say their profit from self employment is £3500- £649.94 = £2850.06

That's a pretty big discrepancy there. One is considering the reality, the other isn't.

if you need to claim UC on an ongoing basis for your self-employed business then that's pretty much a textbook definition of non-viable.

I do have some sympathy for your broader point though - the allowances for vehicles don't seem to match to the actual costs of running vehicles. 

tomtom256

seatbeltnoob said:

It's not non-viable. And it actually doesn't address the realities.

Tax driver may have

Takings of £3500 /month

Lease cost of £900 month

2000 miles drive in one month

£440 paid at the pump for the fuel.

The taxi driver has made a profit of £2160 for this period just in pure cash terms.

Universal credit rules say their profit from self employment is £3500- £649.94 = £2850.06

That's a pretty big discrepancy there. One is considering the reality, the other isn't.

I'm sure many taxi drivers are "adjusting" this decrepancy by padding the mileage claims and I can't blame them for that.

But are they earning enough to not need UC, that is what UC means by non-viable.
The government decided that they didn't want to support any self-employed people when tax credits ends for more than a year, as it saves them a small fortune on the benefit bill.

calcotti

tomtom256 said:
But are they earning enough to not need UC, that is what UC means by non-viable.

The government decided that they didn't want to support any self-employed people when tax credits ends for more than a year, as it saves them a small fortune on the benefit bill.

Similar rules existing for Tax Credits but were less detailed and were frequently ignored because HMRC didn't have the time to apply them. UC has codified the situation and made it more explicit.