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to ask about benefits and self employment

(6 Posts)
nowwheredidmyunicorngo Tue 22-Aug-17 23:04:44

I am newly self employed and very newly separated from my DH.

I've been looking at and i can't work out if there is any point applying for universal credit if am going to be making any money from my business.

Any mums netters have experience of this?

Cantthinkofanythinggood Tue 22-Aug-17 23:06:45

No idea but maybe working tax credit to top you up?

nowwheredidmyunicorngo Tue 22-Aug-17 23:11:07

web site is saying I am in universal credit area? Not sure if that means I can't get tax credits?

nowwheredidmyunicorngo Wed 23-Aug-17 15:11:57


thekillers Wed 23-Aug-17 15:41:28

I think the expectation is that the business will generate the minimum wage per hour and so any credits eat are based on that.

From website

If you’ve been running your business for 12 months or longer when you claim Universal Credit, the Department for Work and Pensions (DWP) will work out your payment based on the minimum income floor.

This is an assumed level of earnings that is used to calculate your Universal Credit when your actual earnings fall below it.

Your minimum income floor level is calculated as follows:

The number of hours you are expected to work each week. This can be up to 35 hours a week, depending on your personal circumstances. For example, you’d be expected to work fewer hours if you have caring responsibilities or you’re disabled.
This figure is then multiplied by the national minimum wage rate for your age group.
This figure is multiplied by 52 then divided by 12 to reach a monthly figure.
An amount for income tax, Class 2 and Class 4 National Insurance contributions is then deducted to arrive at your monthly minimum income floor.
Your minimum income floor is the amount the DWP uses to set your Universal Credit payment each month.

If you earn more than the minimum income floor you will get less Universal Credit.

If you earn less than the minimum income floor you won’t get any extra money to make up the difference.


Sarah has worked as a self-employed hairdresser for two years. She is aged 25 and is expected to work 35 hours a week.

The National Living Wage for her age group is £7.50.

Her minimum income floor is worked out like this:

What is the Work Allowance?
This is the amount of money you can earn before your Universal Credit payment starts to reduce.

Find out more in Universal Credit explained

35 × £7.50 = £262.50 per week
£262.50 × 52 weeks = £13,650 per year
£13,650 ÷ 12 months = £1,137.50 per month
Income tax, Class 2 and Class 4 National Insurance contributions would then be deducted from £1,137.50 to arrive at the minimum income floor.
On this amount, deductions would be £12.35 per month based on Class 2 NI contributions (for tax year 2017/18).
£1,137.50 - £12.35 = £1125.15
This is the minimum amount that the DWP expects that Sarah will earn each month and her payment will be based on an income of £1125.15.
If she earns more than this, her Universal Credit payment will go down by 63p for every £1 she earns unless she qualifies for the Work Allowance.
If she earns less than this, she won’t get any more Universal Credit to make up the difference.

RainbowPastel Wed 23-Aug-17 16:00:22

You have to be generating a certain income from your business to claim any benefits.

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