Universal Credit and not-for-profit

sherlock228

"not for profit" simply means the company's owner cannot draw out any profits as a dividend for themselves. The profits must be reinvested in whatever is the stated objective of the company

NOTE: it does not mean the company cannot employ its owner as an employee, which it then pays real money to (subject to minimum wage legislation of course)

a NFP tag does not mean the owner cannot be making money from it hence UC are interested in means testing it and looking for formal contracts of employment issued by it

Lisa2751

People asking why I am not getting a wage yet…. I don't do as much work as the others some weeks. This involves horse care and land care. We are just making connections and starting out in our first year, I am not able to work without physical help, and I am paying for this, I have applied, but it will take months.
Our work is slowly building but and is all about connections in the community, I knew it wouldn't be straight away.

poppy12345

This would be better posted over on the benefits and tax credits section of the forum. There's a lot more people over there that are more knowledgeable and will give you the correct advice. I'll request it to be moved.

MSE_ForumTeam5

… and we've moved the thread as suggested

tomtom256

Is it a CIC or a normal Ltd company, there is a difference.

If registered as a CIC then you will be exempt from having to report any income and expenses, if not a CIC then you will need to report all income and expenses of the Ltd company.

kaMelo

A CIC is an option looked at by the OP but found unsuitable currently

In short, for UC purposes you, as a limited company director who is in full control of when and how much you pay yourself (or not pay yourself) , are analogous to being self employed. Therefore the income you need to report every month is salary plus your share of company profits.

The grant you mentioned is treated differently, it's a business asset of course but with a corresponding liability, the project the grant is for, to offset the value.

huckster

You need to book a Job Centre appointment to discuss all of this.

As you have LCWRA, you cannot be found Gainfully Self Employed and you just report self employed income and expenses. UC will then take into account any trading profit for each monthly assessment period, plus any employed earnings you received as employee.

Just because you consider the business as not for profit, does not affect UC. You still need to report self employed income and expenses for every monthly assessment period. If your business receives more income than the business pays out in expenses, then UC will consider the net profit when calculating the UC payments. Previous losses during previous assessment periods are carried forward and deducted against profits in months that follow.

Money that the business holds such as grants previously accumulated revenues and other money the business holds has nothing to do with UC. UC is just interested in income and expenses during each assessment period.

For what you do as a business, you must allocate a given value for each hour or session you run. And you draw money from any grants you have obtained previously and this would be considered income during relevant monthly assessment period.

I think you would benefit from speaking to a self employment Work Coach at a Job Centre appointment. And take all relevant documents with you. The Work Coach will most likely have to raise questions with UC policy team to gain answers to questions you will raise about the nature of your business and how it works with UC.

Grumpy_chap

Money that the business holds such as grants previously accumulated revenues and other money the business holds has nothing to do with UC. UC is just interested in income and expenses during each assessment period.

This can be slightly more nuanced.

Assets (including cash) held within the business are disregarded for the day-to-day operation of the business and / or the set aside to meet business tax liability.

Any retained profits will not be disregarded.

A grant is more complex - the funding is usually "ring-fenced" so necessary for the operation of the business but, if the income is also to be disregarded, then the income needs to be treated as no longer "ring-fenced" as elements of the outcome are delivered. I don't know exactly what the OP is providing but there was mention of horses being involved. So, as an example, if a grant of £10k was received to facilitate the business provided a certain number of riding lessons to some defined cohort, as each lesson is delivered, then the value of that transfers to general business funds as income and / or may become retained profits.

huckster

Agree.

A grant in this situation is repayable to funding organisation, if the business providing the agreed service does not deliver on what was agreed.

As the service is provided, the business would be able to access the grant money at an agreed rate for the sessions and this would represent income during the relevant UC assessment period.

Normally any such grant money comes with a very restrictive contract, that fully details how the grant can be used. And every penny has to be accounted for to the funding organisation on a regular basis.

Spoonie_Turtle

OP, you say your UC was stopped. Do you mean you can't get into your journal, or you just didn't get any payments for recent assessment periods? If the latter, what does/do your UC statement(s) say for the relevant AP(s)? That should shed some light on what's happened.