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Original poster

Self employment and moving from tax credits to universal credit

54 replies

starpatch · 14/05/2022 14:01

The government has said they plan to move everyone from tax credits to universal credit by the end of 2024 so I thought it might be useful to have a thread for those of use who are self employed about moving from tax credits to universal credit. I have no credentials but have started doing a bit of googling.

Personal pension- still technically entitled to have contributions to personal pension discounted as income but apparently its not done automatically, advise on money saving expert is to contact your MP if you have this problem.

Calculation of earnings- apparently you can't use the trading allowance for this purpose. Its a simple money in, versus expenses and taxes paid that month calculation.

I am lucky I have more PAYE income than self employed so I am planning to make top up payments to my workplace pension and stop paying into my SIPP. I am also planning on starting to use the installments option to pay tax, will do my self assessment soon and although I have the money saved in a seperate account I will do installments in case I am moved over to universal credit. Just makes more sense as instead of having one month of self employed loss it will even out more.

Anyone out there already self employed on universal credit who can advise?

OP posts:
Babyroobs · 16/06/2024 11:13

barefoot · 13/06/2024 11:53

I know this is a year old thread, but hey I’ve just been migrated to UC from the 40-70 quid a week I got for 16 years for my daughter on tax credits and am finding it a total bloody nightmare. Wth!

I submitted my monthly figures yesterday, a day before the deadline (ironically payments of a lump sum owed to me for a design job I was doing from Jan to May!) which is about as annoying and time consuming as things can ever be, with their own categories that don’t align with HMRC’s. like I don’t have enough to do, as a self-employed single parent of a 16 year old in the first year of a levels, with two dogs, a lodger, a household to run and an elderly mum, and today they have closed my claim because I didn’t see there was a requirement to provide some financial info a few weeks ago. ‘About my investments’ what investments?! Am I genuinely suposed to check my UC account every day? What is this fresh hell? Why can’t they send me a text saying there’s something that I need to do?

the imputing of your monthly income and expenses is just a joke. I have my own system, it works well, is a day or two a year of hard work, which gives a yearly figure and that should suffice. I never lie, it reflects perfectly my rather tiny income and some rental income. Why does it have to be monthly? What do they hope to achieve? Ultimately, with their minimum income floor, it’s forcing creative people like me, who have trickled along, juggling work and parenthood, getting by on quite a small income so I can be there for my daughter, to earn more so I pay more tax. Right?

The intrusion! I have to submit bank statements! And they want to know all about the small other property I own that I am hanging onto for dear life, because it’s the only thing preventing absolute poverty in old age, due to missed years of NI when I was young (and no I can’t make up those years) and the source of valuable rental income.

why do we put up with this Kafkaesque bureaucratic hell?

To replace Blair’s sensible measure to take children out of poverty that was easy to claim, with this hellish creation, making life harder and more stressful for the poorer section of society. And suddenly being hauled over the coals! Jesus Christ! We should be rioting in the streets like the French, instead we just take it lying down.

Rant over, thanks for reading. Any advice or ways to hack the system most welcome, although it looks like there may be someone who works for the system on this thread ?! Vive La Revolution!! (Certainly not on its way with Starmer’s govt I am quite sure 😂) hope to hear from some of you, will certainly be checking in here way more than my UC account ; )) X

Yes it's advisable to check your ' to do' list at least a couple of times a week. Don't worry you'll be out of the UC system in 12 months when your second property is taken into account.

Spudoolikay · 16/06/2024 19:24

Babyroobs · 16/06/2024 11:13

Yes it's advisable to check your ' to do' list at least a couple of times a week. Don't worry you'll be out of the UC system in 12 months when your second property is taken into account.

Edited
Show quote history

Why would that take 12 months to knock barefoot out of UC @Babyroobs?

I must say @barefoot I would have thought you'd have needed to declare the 2nd property and rental income as part of a tax credits claim in any case, so am not sure why that's an intrusion? Income is income? Or have I misunderstood your point?

It's also fairly unusual for self-employed people to have a regular income, usually it fluctuates and I would think there are more people who'd benefit from monthly assessments in that respect than not.

Babyroobs · 16/06/2024 20:15

Spudoolikay · 16/06/2024 19:24

Why would that take 12 months to knock barefoot out of UC @Babyroobs?

I must say @barefoot I would have thought you'd have needed to declare the 2nd property and rental income as part of a tax credits claim in any case, so am not sure why that's an intrusion? Income is income? Or have I misunderstood your point?

It's also fairly unusual for self-employed people to have a regular income, usually it fluctuates and I would think there are more people who'd benefit from monthly assessments in that respect than not.

Show quote history

Because if she has equity of over 16k in the second home her UC would be discontinued after a year. There is a one year grace period for all these tax credit migrants with over 16k of savings and second properties but after that they will no longer be eligible for UC. On tax credits there wasn't really a savings limit like there is on UC, the criteria are different.

barefoot · 16/06/2024 20:55

Good to know, thanks. That’s going to come at a bad time, in a year my daughter will be nearly 18 when I’ll lose my maintanance and my child benefit. Ho hum. Will have to sell second property probably this year to pay off some of my mortgage in order to lower my monthly payments which are due to double in december unless interest rates come down dramatically!

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