Universal credit, savings and debt

[AlaskanSnow]

My husband and I are both self employed, so have started a joint claim for UC.

I've started to get our info together and it seems as though we are going to have too much in savings to claim - but that money is allocated.
We each have tax savings accounts. We put money aside each month, and so now we are nearly at the end of the tax year we have a full years worth of tax each put aside.
I know the advise is to use that money to live off - but there wont be any money coming in to replace it, and the debt will be still owed in January 2021 as it is all from this tax year which is unaffected. So using this money scares me. This is about £6k between us.
We do have other savings of £5K - we expect to be using that in the meantime, it was emergency savings and so designed to be used.

Also, what happens about current accounts? Today our current account looks quite healthy as we have just paid in the amount needed to cover the April bills, but again it is all allocated for! But if UC assess us today that is another £2K. By the end of April, it would be zero

We also have a childs saving account for our son. I've been told that gets taken into account too? This seems unfair as we have never paid into it - it is xmas/birthay money from grandparents. Can someone clarify this as well please? He has an ISA and also a bank account that is in my name in trust for him.

Lastly, we do have debt. We have a loan (car) and then a couple of credit cards with less that 1k on, and also a couple of interest free furniture agreements.
Can our savings offset the debt?

Can anyone with experience help please? I've tried reading the guidance but it's very confusing!

I don't know the answer myself but Martin Lewis website is often worth a look re money matters q and a

If you cannot access the childrens ISA's then that would not be considered as savings for UC. I'm not sure about the money you have set aside for tax - can you not just pay that off before you make the UC claim ( sorry I'm not sure how that works or when you pay the tax ).

Your sons savings are not included. The normal current account going up and down would show on your bank statements so wouldn't be a problem. The £5k savings is under the amount where it makes any difference to your claim.

So you need to ask them to clarify the tax savings.

Pay the tax now even if due later on as its a legitimate outgoing then you won't have to worry about it.

Do you not qualify for the help package for the self employed?

Why can't you ask to pay the tax now exceptionally?

Won't you be able to file this last year's taxes in a couple of days, and pay your tax then? The end of the tax year is just around the corner, you don't have to wait until Jan 2021 to pay.

I would say if you have £5k savings then live off them, you are by no means struggling, tbh a bit of a cheek claiming benefits.

Hi op, did you manage to put in a claim as I am in a similar situation to yourself and feel like I'm being brushed off by uc after putting in a claim

Are your tax savings in business or personal accounts?
If they are in business accounts you could argue that they are business assets, earmarked to pay tax that is owed, and should therefore be disregarded.
However, if it's possible to pay your tax bill early perhaps you could consider doing that.

"Can our savings offset the debt?"
No, but you can use savings to pay off debts. For interest-free debts it wouldn't make much sense but you could consider using some savings to pay off the credit cards (assuming they charge interest) and maybe the car loan too. How much is outstanding?

Some relevant info:
^ If you deprive yourself of capital in order to increase the amount of benefit you get you can be treated as if you still had that capital, this is called ‘notional capital’. This might occur if you give money away to members of your family or buy expensive items in order to reduce your capital.
You will not be considered to have deprived yourself of capital if you have paid off debts or used money for ‘reasonable’ spending on goods and services.^
From www.entitledto.co.uk/help/savings