Can someone help me calculate UC v Tac Credits please?

[Fluffybeebee]

We have recently gone onto the furlough scheme and combined we now earn £1150 a month. Our rent is £480 a month and we get £360 tax credits, child benefit for DS13 but no help for the housing benefit or council tax.

Does anyone know how to figure out if we would be any better under UC? I keep hearing that if you are still on Tax Credits, not to change. But we are really struggling on this wage. Any help would really be appreciated.

That is correct because you are both employed by the limited company.

If your husband paid himself dividends he would also have to report the income, but as all the income is via PAYE he doesn't have to worry about that.

The rules are different for self-employed people and sole traders but I don't think those rules apply here.

I expect it is too late to withdraw my claim for UC and stay on Tax Credits?

I just can't deal with the stress.

It's been less than 24hrs since I sent the application in..

If he doesn’t get dividends it’s fine

Unfortunately yes it is too late to return to TC. The minute you start applying you can’t go back.

There is no unfortunately about it, not in this case.
OP, take a deep breath. You will be better off on Universal Credit. You've done the right thing.

Everyone will eventually ne moved to Uc although managed migration is currently on hold but you will be better off. A lot of people find Uc much easier.

Thanks

I have done some more calculations and when the MIF is reinstated as I understand it my husband will have to earn at least £1250, but I would probably be OK as I am?

Once the business starts earning again we will probably get nothing. It looks like they will not accept a very large percentage of the business outgoings (vehicles) so they will say his business has profits even if when it doesn't and count it as income.

Do anyone know how long the MIF is suspended for?

Reading through this, Universal Credit still scares me. I have been on tax credits since my DS was born in 2014. The difference between tax credits to universal credit is over £200 a month hence why I am so worried about going on to Universal Credit. I am a 1 income household (I take home just over £1000 a month and at the moment less) parent to a 5 year old. I have no savings, but I do have a mortgage on the house we live in which I purchased in 2011. We were a household that already struggles so to lose over £200 a month when universal credit comes around for me is frightening

@SpideyMom I have also read this with interest as like you, im also on TC have 2 children, I privately rent our home (expensive area) and work 20 hours a week, I have put my figures in a calculator and would be considerably better off on UC, I have never applied for help towards housing, I’ve always managed as my ex partner gives me a generous amount in child maintenance, this could potentially change though as his salary has gone down due to the current situation, I’m so scared to make the jump but I may not have a choice, I have heard so many horror stories.

If your husband is an employee, as you have said, then there is no minimum income floor. He just needs to be paying himself minimum wage for hours worked and if he isn't working enough hours might have to look for more work. The minimum income floor is for self employed people.

@CrazyPrepared I would definitely get a better off assessment done if you feel you will be better off. I will be considerably down so I dont want to make the jump

@Student58
I think that because he is the director of the company that pays him he will be treated as employed and self employed. They will add what they consider is business profit onto his self employed wages. But the thing is it's not profit because our main outgoings are not counted so it will look like he is making a profit when he isn't.

For example it's a car rental company. Universal Credits won't allow him to claim the finance payments and insurance payments of the cars as an outgoing of the business. They will only let you claim 45p per business mile. But in reality the cars cost £1000 each a month to just sit doing nothing. In my view that's cheating the system against claimants.

I didn't know all of this before I applied. I just assumed he was "employed".

If I have understood any of this wrong please let me know!

Had I realised that your husband was self employed I would have highlighted the pitfalls of Uc for the self employed, however there was nothing in your early posts to suggest that he was self employed. To be honest the ay the economy is going I think the minimum income floor could be lowered or not applied for some time.

I agree with babyroobs about MIF, no one knows yet but it seems unlikely they will reintroduce it any time soon.

"Universal Credits won't allow him to claim the finance payments and insurance payments of the cars as an outgoing of the business. They will only let you claim 45p per business mile. But in reality the cars cost £1000 each a month to just sit doing nothing."

OP you've interpreted this all wrong. You allowed to deduct "reasonable expenses for your business", if it's a car rental business that will include the costs of stock/equipment and associated expenses. The rules about vehicle costs relate to people driving a vehicle themselves in order to do their work, a self-employed tradesperson driving their van for example.

@Babyroobs
Totally my fault. I didn't consider my husband self employed because he is paid via PAYE. It didn't occur to me to mention it!

@AnotherEmma
Thanks for correcting me. That makes me feel a lot better and makes much more sense.

I don't think things are as horrific as I initially thought. I've just been so overly stressed recently I think I panicked.

Thanks for all of the advice

@SpideyMom
We were a household that already struggles so to lose over £200 a month when universal credit comes around for me is frightening
With managed migration you won’t lose anything , transitional protection will mean your UC is no less than your tax credits.

Thanks for that. I just hope that remains the case when I am moved then.
Still, the difference between the two systems is so vast. Especially when circumstances would be like for like (in my case anyway)

I'm in the same boat. I have done the calculations on numerous sites and will be way better off on UC but scared to make the initial jump. I'm a single working mum living in a rented accommodation that I was planning to buy once I've progressed financially i my job. I've been lucky enough to work during covid but my childcare had to stop and i worked from home so i notified tax credits the other day i completely forgot to tell them anyway i did. My friend told me a few times to check UC as she was doing better since she went on it. But, I've not heard good things about it when it started which scared me but seeing the calculations im so much better off. I think im gona just claim. Plus i prefer 1lump payment comparison to the scattered weekly of tax credits. Did you apply?