UC Managed Migration

LunaCatty

We're in exactly the same position here. From what I can gather our UC claim would be near enough £0 (used turn2us calculator) as the element of CTC we still receive is due to my son's DLA rate, which isn't applicable for UC. I know we will have transitional protection, but with me having a small business (with seasonal fluctuations) and my husband having variable shifts/seasonal working patterns which also mean more income Spring and Summer and less over Winter it would mean the accounting as mentioned above hitting us too. We currently get £134 every 4 weeks, but with the way UC works it really does seem futile us swapping over and we've decided to end our claim once they tell us to migrate. I wonder how many others make the same decision too - both for managed migration and new applications for UC - due to the complexities for small business owners or seasonal based income.

ElwoodBlues

LunaCatty said:

We're in exactly the same position here. From what I can gather our UC claim would be near enough £0 (used turn2us calculator) as the element of CTC we still receive is due to my son's DLA rate, which isn't applicable for UC. I know we will have transitional protection, but with me having a small business (with seasonal fluctuations) and my husband having variable shifts/seasonal working patterns which also mean more income Spring and Summer and less over Winter it would mean the accounting as mentioned above hitting us too. We currently get £134 every 4 weeks, but with the way UC works it really does seem futile us swapping over and we've decided to end our claim once they tell us to migrate. I wonder how many others make the same decision too - both for managed migration and new applications for UC - due to the complexities for small business owners or seasonal based income.

You should claim UC regardless, at least that way there's a chance it'll show up in some stats that people are losing out massively under UC (whilst the politicians claim no one will be worse off).

huckster said:

@ElwoodBlues

Have you thought about asking your local MP to raise questions with DWP about this ?

Did DWP consider the issue of self employment stock purchases made before UC claim was submitted, to ensure transitional protection was provided to deal with this ?

If DWP has created this issue, because of their managed migration process from TC to UC, then it would be up to Government ministers to answer for this.

My local MP is worse than useless unfortunately. Many of us in my community have written to her on numerous occasions asking for help with all manner of local issues. It's a long standing joke that she sends out the exact same reply (in funky purple ink) to everyone that just says "Thank you for contacting me, it's lovely hear from my constituents. I'm working really hard to do a great job of representing you in parliament". The local community Facebook group is full of pictures of that exact same reply to everyone. 

As Calcotti says, it's not a managed migration issue per se, it's a flaw in the UC system in general. I'm not sure the managed migration process could ever patch up the issue, because it's so very different to tax credits - where my company's turnover was irrelevant, it was all done on actual income. I pay myself a fixed monthly salary by PAYE.

I can see a multitude of ways that a small business's finances can be manipulated to optimise for UC. It feels a bit unethical to me, and I'm reluctant to do it, but it's not difficult to do and above board.

As my accountant put it to me - what does DWP do when at the end of the tax year my PAYE, tax return, and company accounts all show a very different income to what the UC process has based my entitlement on?

Am I right in thinking that if I transfer the business to someone else (a relative other than a partner), whilst I keep working for it as an employee, that UC will no longer consider me as being self employed, but instead work from my PAYE income? 

calcotti

ElwoodBlues said:.."Thank you for contacting me, it's lovely hear from my constituents. I'm working really hard to do a great job of representing you in parliament". ..

Given the times we live in and the types of reason most contacts with MPs will be about that is an incredibly tone deaf reply!

ElwoodBlues said:
Am I right in thinking that if I transfer the business to someone else (a relative other than a partner), whilst I keep working for it as an employee, that UC will no longer consider me as being self employed, but instead work from my PAYE income? 

That sounds possible but, if the business has value, how would you retain control of that value.

ElwoodBlues

calcotti said:

ElwoodBlues said:.."Thank you for contacting me, it's lovely hear from my constituents. I'm working really hard to do a great job of representing you in parliament". ..

Given the times we live in and the types of reason most contacts with MPs will be about that is an incredibly tone deaf reply!

ElwoodBlues said:
Am I right in thinking that if I transfer the business to someone else (a relative other than a partner), whilst I keep working for it as an employee, that UC will no longer consider me as being self employed, but instead work from my PAYE income? 

That sounds possible but, if the business has value, how would you retain control of that value.

Relative buys all the shareholding in the business (at current asset valuation), and then I use the money to overpay my mortgage (as capital in claimant's primary residence is disregarded). Unless there's a flaw in that that I've overlooked?

calcotti

ElwoodBlues said:

calcotti said:

ElwoodBlues said:.."Thank you for contacting me, it's lovely hear from my constituents. I'm working really hard to do a great job of representing you in parliament". ..

Given the times we live in and the types of reason most contacts with MPs will be about that is an incredibly tone deaf reply!

ElwoodBlues said:
Am I right in thinking that if I transfer the business to someone else (a relative other than a partner), whilst I keep working for it as an employee, that UC will no longer consider me as being self employed, but instead work from my PAYE income? 

That sounds possible but, if the business has value, how would you retain control of that value.

Relative buys all the shareholding in the business (at current asset valuation), and then I use the money to overpay my mortgage (as capital in claimant's primary residence is disregarded). Unless there's a flaw in that that I've overlooked?

Paying off debt is never treated as deprivation of capital so paying off mortgage is absolutely fine. Can't see a flaw.

sourpuss2021

Six months later, company loses several major contracts.  Aggrieved relative screams blue murder?

ElwoodBlues

sourpuss2021 said:

Six months later, company loses several major contracts.  Aggrieved relative screams blue murder?

Not likely - the business has been trading successfully for decades, the only client that has a major contract has just renewed for at least 3 years. And the relative would be purchasing the company at the value of it's physical assets - stock and equipment. So depreciation aside, they won't have lost anything.

andrewmp

When did they start moving other areas outside the pilot areas?  I thought they were sticking with certain areas for now?

poppy12345

andrewmp said:

When did they start moving other areas outside the pilot areas?  I thought they were sticking with certain areas for now?

Managed migration has started in all areas, it was some time last year. It will be anytime up until end of 2024. (unless it's extended) The only exception to this are those that are claiming Income Related ESA who won't be migrated across until at least 2028 (unles they're also claiming tax credits)

andrewmp

poppy12345 said:

andrewmp said:

When did they start moving other areas outside the pilot areas?  I thought they were sticking with certain areas for now?

Managed migration has started in all areas, it was some time last year. It will be anytime up until end of 2024. (unless it's extended) The only exception to this are those that are claiming Income Related ESA who won't be migrated across until at least 2024 (unles they're also claiming tax credits)

I know as of January they were still working within the discovery areas, so that's definitely not correct.

Maybe something changed since then.