Self Employed expenses while on Universal Credit

yar_2

Hi 

i am self employed i have claimed Universal Credit, i am allowed certain expenses . one of which i used was my Van  as a taxi (classed as a Black Cab)  UC  only allowed me to claim £41  each month on the interest of the loan. My question is since the  van was modified to take wheel chair customers,   Does this not mean that the full loan should be excepted as an expense? 

Ray 

RunsFromRobots

Short answer, no.

https://www.gov.uk//government/publications/universal-credit-and-self-employment-quick-guide/business-expenses-you-can-report-to-universal-credit-if-you-are-self-employed 

kaMelo

The type of vehicle is not a relevant factor, its your role as a taxi driver that means there are limits on the amount of certain expenses you can deduct from your profits.

This is one of those limited expenses.

kaMelo

The type of vehicle is not a relevant factor, its your role as a taxi driver that means there are limits on the amount of certain expenses you can deduct from your profits.

This is one of those limited expenses.

Yamor

Repayment of the capital of the loan is not an expense for UC (just like it wasn't counted as income when you received the loan).

However, when you actually spent the money received via the loan to upgrade your van, that would have been an allowable expense.

Yamor

kaMelo said:

The type of vehicle is not a relevant factor, its your role as a taxi driver that means there are limits on the amount of certain expenses you can deduct from your profits.

This is one of those limited expenses.

A black cab is not considered a car for these rules, and you can choose to use the actual expenses, and not simplified expenses.

yar_2

This is from the link provided by Runsfromrobots at the top of the conversation.

 

You cannot claim expenses for the purchase, lease or acquisition of a car or minicab if the vehicle is not specially adapted for business use . 

 The car is specially adapted for business use  what then ?

huckster

The Gov.uk website is slightly misleading and could be made clearer.

But if you apply this logic. Universal Credit is never going to help you buy any asset. If you add vehicle purchase cost as an expense, in effect Universal Credit would be helping you buy the vehicle.

All that the Gov.uk website linked to above is saying is that for an adapted vehicle either simplified or actual costs of running the vehicle can be included as an expense. So either mileage or actual costs.  By entering mileage will apply simplified rate of 45p or 25p per mile which will cover fuel costs, repairs, servicing and Insurance costs. If you don't want to use simplified mileage, then you can state specific actual costs such as fuel, repairs, servicing and Insurance costs.  For business loan interest it is a maximum of £41 per monthly assessment period as stated.

Yamor

huckster said:

The Gov.uk website is slightly misleading and could be made clearer.

But if you apply this logic. Universal Credit is never going to help you buy any asset. If you add vehicle purchase cost as an expense, in effect Universal Credit would be helping you buy the vehicle.

All that the Gov.uk website linked to above is saying is that for an adapted vehicle either simplified or actual costs of running the vehicle can be included as an expense. So either mileage or actual costs.  By entering mileage will apply simplified rate of 45p or 25p per mile which will cover fuel costs, repairs, servicing and Insurance costs. If you don't want to use simplified mileage, then you can state specific actual costs such as fuel, repairs, servicing and Insurance costs.  For business loan interest it is a maximum of £41 per monthly assessment period as stated.

Just to clarify this point:

UC won't allow the cost of any non-depreciating asset (like property and shares), but the cost of depreciating assets (like vehicles) can be deducted as an expense.

Cars have a special rule that you can't deduct the cost of the car or the running costs, but instead simply deduct 45p/25p per mile.

For other vehicles (including black cabs), you can choose which method to use, and if you don't choose the simplified route of 45p/25p per mile, then you CAN deduct the purchase cost, cost of adaption, and running costs instead.