SE losses are not offset against employed income

ashirus

My wife works an employed job, let's say it's £2000/mo. She also gets employed income which currently is negative because of a bunch of relevant expenses.

The UC website payment details says:
"Your earnings from self-employment is a minus amount. That means we've treated them separately from earnings reported by your employer."

In other words, the loss for her SE income is not deducted and we get the full employed income dedudcted from our award each month.

What gives them the right to do this, and is there any way I can ensure the SE losses are counted against employed earnings either individually or as a couple?

Ash

MattMattMattUK

ashirus said:

My wife works an employed job, let's say it's £2000/mo. She also gets employed income which currently is negative because of a bunch of relevant expenses.

The UC website payment details says:
"Your earnings from self-employment is a minus amount. That means we've treated them separately from earnings reported by your employer."

In other words, the loss for her SE income is not deducted and we get the full employed income dedudcted from our award each month.

What gives them the right to do this, and is there any way I can ensure the SE losses are counted against employed earnings either individually or as a couple?

Ash

The law gives them the right, and indeed the obligation to do that. You cannot offset self-employed losses against PAYE earnings for UC purposes, it is not allowable. 

peteuk

The question is why work SE if it’s making a loss?  Is this common if so then why would the government prop up your wife’s failed SE?

The mechanism is your employee advises DWP of your income, you advise them of SE income, if your new to UC your given a start up years grace, but after which your subject to Minimum income floor, so regardless of what you report, if lower than the MIF they take the MIF as your income.

TheShape

peteuk said:

The question is why work SE if it’s making a loss?  Is this common if so then why would the government prop up your wife’s failed SE?

The mechanism is your employee advises DWP of your income, you advise them of SE income, if your new to UC your given a start up years grace, but after which your subject to Minimum income floor, so regardless of what you report, if lower than the MIF they take the MIF as your income.

The start-up period and the MIF will only apply if someone is found to be gainfully self-employed.

You'll only usually (ever) be found gainfully self-employed if self-employment is the main employment.

That may not be the case here.

ashirus

it's in the start-up period, they are gainfully SE, they happen to have had a loss for SE in a recent period

TheShape

ashirus said:

it's in the start-up period, they are gainfully SE, they happen to have had a loss for SE in a recent period

Thouhgt it was worth checking.  Bear in mind that when the start-up period ends and the MIF is applied, in a month where your wife earns nothing, makes a loss from self-emplyment or earns less than the MIF, she will be treated as having earnings from self-employment equal to the MIF plus any employed earnings.