Help needed with UC & self employment

MissReginaP

Hello, I really hope someone can help me. We are at such a loss at what to do. 

My sister & I both have multiple health problems which means we are unable to work full time. 

To earn some money, in a way we can cope with, we run 2 holiday let caravans. 

My sister has just recently applied for universal credit as she has no income at all, apart from the small amount of profit we earn towards the end of the year. 

Her wife walked out on her, leaving her with nothing, so my dad & myself pay for everything for her. 

So she applied, provided all the medical evidence needed and was told she’d be getting her first payment on the 28th May and she wouldn’t need to actively seek work. 

She had the meeting with the case worker at the job centre and she explained how we run the caravans. 

As we cannot ever guarantee that bookings go ahead, we don’t take a penny from the profits until around Sept time, as we have to make sure we have enough to cover all the costs, fees, bills we have. 

She obviously had to fill out the form giving income, expenditure etc.. and we worked out what the estimate total costs would be (by increasing last years slightly) and dividing it by 8 months which would cover until we earn enough to take profit. 

The problem is, UC now say that she has earnt over £500 this month so doesn’t get any help. The problem is, yes we have that in the business account but we cannot use any until all costs are paid. 

How on earth can we get her some income top up for the 3/4’s of the year when she earns absolutely nothing? When for the upcoming months, we’ll be getting regular income from guests, that we can’t touch.  

The case worker guy said he can’t understand how we run a business but don’t take any wage for most of the year, but I don’t get how he can’t understand that unless we keep all the money in the account until all costs are made, we can’t take any. We cannot risk taking some and then having bookings cancel (which happens often) and then not have enough to pay all the site fees, bills etc..

sorry this is so long.
Any help is very appreciated. Thank you. 

huckster

Sorry but this is the way UC works in regard to self employment. Every month self employed claimants have to report actual income received and actual expenses incurred. And that leaves a net profit that will be used by UC to calculate the monthly benefit award amount. 

If your Sister has reported doctors fit note on her UC claim this will enable Work Capability Assessment (WCA) process. The WCA process is to look at how health affects capability for work and will lead to a decision on whether she has limited capability for work(LCW) If she is awarded LCW she will then have a Work Allowance where some income is then ignored when calculating UC awards. If she is awarded limited capability for work and work related activities (LCWRA)  because severe health would even stop her from preparing for work, then not only would the claim have a work allowance, but an extra benefit amount would be included.

In regard to the caravans are these caravans that would be towed by a vehicle or are they static caravans?  How was the business set up? Are these business assets or personal assets?  Were they bought as part of business ? The reason for asking is that UC could enquire whether these form part of personal capital and potentially affect entitlement to UC

HillStreetBlues

huckster said:

In regard to the caravans are these caravans that would be towed by a vehicle or are they static caravans?  How was the business set up? Are these business assets or personal assets?  Were they bought as part of business ? The reason for asking is that UC could enquire whether these form part of personal capital and potentially affect entitlement to UC

Both are  classed as personal possession if personal assets as they are not property if on a non-residential site.
OP need to state what kind of site it's on. 

MissReginaP

huckster said:

Sorry but this is the way UC works in regard to self employment. Every month self employed claimants have to report actual income received and actual expenses incurred. And that leaves a net profit that will be used by UC to calculate the monthly benefit award amount. 

If your Sister has reported doctors fit note on her UC claim this will enable Work Capability Assessment (WCA) process. The WCA process is to look at how health affects capability for work and will lead to a decision on whether she has limited capability for work(LCW) If she is awarded LCW she will then have a Work Allowance where some income is then ignored when calculating UC awards. If she is awarded limited capability for work and work related activities (LCWRA)  because severe health would even stop her from preparing for work, then not only would the claim have a work allowance, but an extra benefit amount would be included.

In regard to the caravans are these caravans that would be towed by a vehicle or are they static caravans?  How was the business set up? Are these business assets or personal assets?  Were they bought as part of business ? The reason for asking is that UC could enquire whether these form part of personal capital and potentially affect entitlement to UC

Thank you. 

I will forward this to her & see if she’s been given LCW which she thought she had. 

They are static on a holiday site. 

One I own and the other my sister & I bought together with a death in service payment when our mum died, as we wanted to be able to earn some money ourselves but it’s nowhere near enough to live on. 

It’s as basic as can be business wise, and my sister & I do a self assessment for tax each year with an accountant. 

MissReginaP

HillStreetBlues said:

huckster said:

In regard to the caravans are these caravans that would be towed by a vehicle or are they static caravans?  How was the business set up? Are these business assets or personal assets?  Were they bought as part of business ? The reason for asking is that UC could enquire whether these form part of personal capital and potentially affect entitlement to UC

Both are  classed as personal possession if personal assets as they are not property if on a non-residential site.
OP need to state what kind of site it's on. 

They are static caravans on a holiday park, owned by us. 

HillStreetBlues

MissReginaP said:

HillStreetBlues said:

huckster said:

In regard to the caravans are these caravans that would be towed by a vehicle or are they static caravans?  How was the business set up? Are these business assets or personal assets?  Were they bought as part of business ? The reason for asking is that UC could enquire whether these form part of personal capital and potentially affect entitlement to UC

Both are  classed as personal possession if personal assets as they are not property if on a non-residential site.
OP need to state what kind of site it's on. 

They are static caravans on a holiday park, owned by us. 

Then it will be classed as your own personal possession so ignored by UC.

huckster

Case law that applies below.  Does this mean that as the caravans are let out, they are not 'personal possessions' ?  If so, if UC were made fully aware of the caravans being owned and they have not picked up any issue with these being potentially capital, does the OP raise this with UC.  Under UC, even if DWP make a mistake and later find out about this, then any benefits paid may be treated as overpaid.

See point 2. below.

 “personal possessions” mean any physical assets other than land and assets used for business purposes (broadly the same conclusion as was reached in CPC/370/2006) (paragraphs 53 to 55).

R(H)7/08

Category:
Reported decisions - Commissioner

CH/3700/2006

Capital – whether a caravan is capital – whether to be disregarded as a personal possession

The claimant was refused housing benefit and council tax benefit on the ground that he had capital of £30,000 in the form of a caravan on a non-residential site. The local authority ruled that it could not be disregarded as a personal possession because it was static and connected to services and therefore was to be classed as property. He appealed to a tribunal, arguing that the value of the caravan should be disregarded as a personal possession under regulation 38(2) of, and paragraph 11 of Schedule 5 to, the Housing Benefit (General) Regulations 1987 (consolidated in the Housing Benefit Regulations 2006 as regulation 44 and paragraph 12 of Schedule 6). The tribunal found that the caravan was capital, but its conclusions on the issue whether it should be disregarded as a personal possession were unclear. The question whether the claimant had acquired the caravan with the intention of reducing his capital in order to secure entitlement to housing benefit or to increase the amount of that benefit was not in issue. The tribunal dismissed the appeal and the claimant appealed to the Commissioner, who invited the Secretary of State to join the proceedings as a party. The Secretary of State’s representative supported the appeal on the basis of CPC/370/2006.

Held, allowing the appeal, that:

1. the tribunal had erred in law in failing to deal adequately with the issue of whether the caravan was a personal possession and therefore to be disregarded under paragraph 11 of Schedule 5 (paragraphs 21 and 22);

2. the caravan was capital for the purposes of the housing benefit and council tax legislation (paragraphs 23 to 28) but fell to be disregarded as a “personal possession”. Having regard to the context of the words and the history of the legislation, “personal possessions” mean any physical assets other than land and assets used for business purposes (broadly the same conclusion as was reached in CPC/370/2006) (paragraphs 53 to 55).

Date:
30/11/2007

Judges:
Jacobs, E

Spoonie_Turtle

MissReginaP said:

huckster said:

Sorry but this is the way UC works in regard to self employment. Every month self employed claimants have to report actual income received and actual expenses incurred. And that leaves a net profit that will be used by UC to calculate the monthly benefit award amount. 

If your Sister has reported doctors fit note on her UC claim this will enable Work Capability Assessment (WCA) process. The WCA process is to look at how health affects capability for work and will lead to a decision on whether she has limited capability for work(LCW) If she is awarded LCW she will then have a Work Allowance where some income is then ignored when calculating UC awards. If she is awarded limited capability for work and work related activities (LCWRA)  because severe health would even stop her from preparing for work, then not only would the claim have a work allowance, but an extra benefit amount would be included.

In regard to the caravans are these caravans that would be towed by a vehicle or are they static caravans?  How was the business set up? Are these business assets or personal assets?  Were they bought as part of business ? The reason for asking is that UC could enquire whether these form part of personal capital and potentially affect entitlement to UC

Thank you. 

I will forward this to her & see if she’s been given LCW which she thought she had. 

If she's not long applied then she likely hasn't had a work capability assessment yet, unless she is in one of a very few circumstances that mean she's automatically treated as having LCW/RA.

Her work coach has probably turned off work search requirements but that doesn't mean any LCW/RA status has been added to her claim; usually that only happens after having the assessment and a decision being made.

For the assessment she should receive a form to fill in about how her health conditions affect specific abilities, then she'll have an assessment (usually over the phone but sometimes face-to-face) and then a decision is made.  If she disagrees with the decision she can challenge it, but it is wise to understand how the WCA is assessed first.  It's a bit like PIP/ADP in that you have to be able to do things reliably (repeatedly, safely, and to an acceptable standard i.e. not causing excessive pain/fatigue/other negative effects) to be classed as being able to do them.

https://www.advicenow.org.uk/get-help/benefits/employment-and-support-allowance-esa/employment-and-support-allowance-esa

https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/employment-and-support-allowance/help-with-your-esa-claim/fill-in-form-esa/1-moving-around-using-steps/

https://www.entitledto.co.uk/help/esa_criteria

HillStreetBlues

huckster said:

Case law that applies below.  Does this mean that as the caravans are let out, they are not 'personal possessions' ?  If so, if UC were made fully aware of the caravans being owned and they have not picked up any issue with these being potentially capital, does the OP raise this with UC.  Under UC, even if DWP make a mistake and later find out about this, then any benefits paid may be treated as overpaid.

See point 2. below.

 “personal possessions” mean any physical assets other than land and assets used for business purposes (broadly the same conclusion as was reached in CPC/370/2006) (paragraphs 53 to 55).

It would be either personal possession or a business asset, both ignored by UC.
https://www.legislation.gov.uk/uksi/2013/376/schedule/10  Disregarded Capital UC Regs, Sch 10, para 7

Business assets

7.  Assets which are used wholly or mainly for the purposes of a trade, profession or vocation which the person is carrying on

It has to be one or the other, but as both are disregarded, it won't matter with UC which it is.

huckster

Then I would suggest the OP's Sister declares the static caravans and there is UC Decision Makers decision whether UC disregards.  

From what I can tell from the OP's post these assets appear to have been bought as holiday accommodation for some personal.use, but not necessarily as part of ABC Holiday company. They then let the caravans to provide some income.

From what I see from a few online threads and the case law affecting benefits, such assets should be fully declared to UC, so that all information regarding these assets can be considered by UC Decision Makers.

bazdvd

who is down as the owner of the van? is it joint names?
Whos names are listed on the company?