Can Universal Credit force me to make a change of circumstance and backdate it to start 18months ago

poppy12345

calcotti said:

poppy12345 said:. 

I remember looking at the members profile and seen they had started 4 threads but could only see 2 of them.They probably contacted MSE to have the first 2 removed. Seems like they did the same this time..

if that has happening it is very annoying and wasting the time of those who voluntarily give up time to try and help others. 

Totally agree, very frustrating.

biz_owner

Thank you all for the taking the time to look at those related cases. I can assure this is a different person here. If any of you do remember what was the predominent advice given that could be really useful.
Thank you again.

OhWow

biz_owner said:

Thank you all for the taking the time to look at those related cases. I can assure this is a different person here. If any of you do remember what was the predominent advice given that could be really useful.
Thank you again.

That deleted thread will likely be found in Google Cache. Very useful when somebody deletes their thread or posts at a later date.

Google Cache: How to View Cached Pages

At its most basic, Google crawls web pages and then makes raw HTML copies of them -- a cached page

https://blog.hubspot.com/marketing/google-cache

Icequeen1

biz_owner said:

Hi,

So we were asked to move over from Tax Credits to Universal Credits 18 months ago, I am a director of 2 companies and I get a salary from one of them so I have always said I was employed. My wife is a shareholder in one of the companies and have been classified as Employed.
In the last meeting withe the work coach, they are asking us to now make a Change of Circumstance to say we are self-employed. Having read around, this seems to be the way UC treats directors and shareholders of companies. Can someone please confirm this?

My real concern is that they want me to backdate to Dec 2021 which is crazy as we have met work coaches and at no time were we told that we should have been treated as self-employed. This is going to obviously be very bad as the company does make extra profit that we use to buy new stock that we sell online. So we always keep this surplus income for new products etc....

I would appreciate anyone just letting me know if UC can force me to backdate the start of self-employment to Dec 2021?

Thanks, 

As others have said above - UC effectively ignores the company structure and so directors of their own company are self-employed and (usually) employed for UC (in respect of the salary paid). The position may be different for your wife, it depends on whether she can be said to be analogous to a self-employed person in respect of her company. 

I think calling it a change of circumstances is a bit misleading, it should have been this way from the very start of your UC claim so it isn't a change, its an error that has obviously continued throughout the whole period. 

seatbeltnoob

dont mess around with UC, you should have read around this even if you weren't advised correctly.

The financial consequences of 18 months of mis-calculated claims can be HUGE.

i do ecommerce too and on UC. Timing is very important so I tend to buy stock in small manageable sizes so my month by month earnings are consistent.

UC calculates expenses on cash basis, not like in accounting where you expense each unit of stock as you sell them.

I also voluntarily pay my VAT each month, and not quarterly which avoids the highs and lows each month.

seatbeltnoob

biz_owner said:

calcotti said:

As a director of your company you are treated as self-employment for UC purposes (whilst also employed). This is intended to prevent claimants manipulated how they pay themselves which the intention of distorting them benefits entitlement.

UC will need to correct the whole of your claim (although that will be difficult to unpick).

Your 'self-employed' earnings are your share of the difference between the business income minus the business expenditure on a cash basis. The salary and employer NI will although as a business expenses.

Each month you will have the PAYE salary plus the self employed earnings.

I am not clear what the role of your wife is, why is she classed as a employee and does she get a wage.

Yes my wife does some of the admin tasks (invoices, payments, entering data into an accounting system). She gets a salary based on that. She is only a shareholder in one the companies but not a director. I guess she will still be considered self-employed as well?

it's a unique circumstance. UC wording is control. If you have control in the company.

Lets face it, there are two options here.

1) she is classed as self employed, MIF applies on her too and she has to complete a self employed report each month like you.

2) WORSE, she's a regular emplyee with a shareholding into a business she doesn't own. So it's an investment and the value of the shares count towards your combined capital and fingers crossed that doesn't take you over £16K capital threshold.

It is fair better for you that she is treated as self employed.

Suppose you have company A and company B

You own 100% of company B

Your partner owns shares that are 50% of Company A only. You own the other 50%.

Her self imployed returns per month with by at 50% of all the income and expenses of company A

Your self employed returns will be 50% of all the income and expenses of company A and 100% of all the income and expenses of company B

All salaries paid and an expense and UC adds them back into the calculation themselves as they get the RTI submissions.

Good news for you, I am in a similar business setup to you (ecommerce), and this triggered some concerns I had. I posted here about capital: https://forums.moneysavingexpert.com/discussion/6457947/uc-se-owner-operator-business-does-my-shareholding-in-my-own-business-count-towards-my-capital#latest

Good news, as long as the capital in the business was left for use for buying stock it would be disregarded.

When I went on UC, i didn't mess around with it. I read around and got the information myself.

It was very very clear to me that UC treated me as self employed. I didn't have to research much at all. So I don't know how you managed to convince yourself you're a employed worker when you have your own business.

biz_owner

seatbeltnoob said:

biz_owner said:

calcotti said:

As a director of your company you are treated as self-employment for UC purposes (whilst also employed). This is intended to prevent claimants manipulated how they pay themselves which the intention of distorting them benefits entitlement.

UC will need to correct the whole of your claim (although that will be difficult to unpick).

Your 'self-employed' earnings are your share of the difference between the business income minus the business expenditure on a cash basis. The salary and employer NI will although as a business expenses.

Each month you will have the PAYE salary plus the self employed earnings.

I am not clear what the role of your wife is, why is she classed as a employee and does she get a wage.

Yes my wife does some of the admin tasks (invoices, payments, entering data into an accounting system). She gets a salary based on that. She is only a shareholder in one the companies but not a director. I guess she will still be considered self-employed as well?

it's a unique circumstance. UC wording is control. If you have control in the company.

Lets face it, there are two options here.

1) she is classed as self employed, MIF applies on her too and she has to complete a self employed report each month like you.

2) WORSE, she's a regular emplyee with a shareholding into a business she doesn't own. So it's an investment and the value of the shares count towards your combined capital and fingers crossed that doesn't take you over £16K capital threshold.

It is fair better for you that she is treated as self employed.

Suppose you have company A and company B

You own 100% of company B

Your partner owns shares that are 50% of Company A only. You own the other 50%.

Her self imployed returns per month with by at 50% of all the income and expenses of company A

Your self employed returns will be 50% of all the income and expenses of company A and 100% of all the income and expenses of company B

All salaries paid and an expense and UC adds them back into the calculation themselves as they get the RTI submissions.

Good news for you, I am in a similar business setup to you (ecommerce), and this triggered some concerns I had. I posted here about capital: https://forums.moneysavingexpert.com/discussion/6457947/uc-se-owner-operator-business-does-my-shareholding-in-my-own-business-count-towards-my-capital#latest

Good news, as long as the capital in the business was left for use for buying stock it would be disregarded.

When I went on UC, i didn't mess around with it. I read around and got the information myself.

It was very very clear to me that UC treated me as self employed. I didn't have to research much at all. So I don't know how you managed to convince yourself you're an employed worker when you have your own business.

Thank you for the detailed answer.

I was on Tax Credits who always treated me as employed after having a long call with them on how I should report my earnings. When I moved over to UC, I went through the application assuming the same would be applicable and as such I never ever thought I would be treated as "self-employed".

Anyway, let me go ahead an do what is needed, as for my wife, the information above is very useful in working out the best course of action and then we will see how UC will decide to classify my wife's involvement and income.

Thanks again guys for all your help and time.