Universal Credit wants to know all my business income and expenses every month

[Muva14]

I run a very small LTD company for over 2 years. I had always paid myself a set amount of £1000 per month through HMRC and then would claim Universal Credit for whatever they decided I was entitled to, for example rent, childcare etc.

Last year, they decided I had to declare ALL my business income and expenses. I was a little confused as I was told something completely different for the first year, and now felt it would be extremely time consuming to report all my income and expenses every month. I also feel it is none of their business what the Ltd company is bringing in if I am only paying myself a set amount out of it. I was not taking dividends.

They have put my payments on hold for the last few months and so I have been struggling financially a little since then. I am worried they might say I am making "too much" in the company and also because I cannot be asked to sit there and waste time writing out all the income and expenses.

I am looking to come off Universal Credit completely as I would like to apply for a mortgage in the next few months, however I am not getting any support with childcare of anything. I'm worried I may be missing out from support/ other benefits. I can't seem to get my head around it all. Is there anyone that can advise?

I'm also not sure if I can apply for a mortgage whilst still on Universal Credit?

I’m just surprised they never asked to start with, your company could be making huge profits while you claim a small salary & UC, of course HMRC will want to know the details of your full business finances.

I have read horrific things about being SE on UC. Actually considering closing my business nd getting regular job when I have to migrate across. .

Well I can’t imagine you’ll be given much of a mortgage on an income of 12K no.
Of course they need to know every detail. You could be claiming an income far below what you’re making and ploughing the rest into an asset. Why would other taxpayers fund that for you?

First year is just about them not applying the minimum income floor if you're gainfully self employed.

I don't see any issue with you having to declare the profit from your business (which is worked out by submitting your income and expenses) what's the problem, exactly?

Agree, you could be paying yourself a paltry amount yet have plenty of profit in the business and expect the tax payer to top up your income, I’m amazed you don’t know this, of course they want to see everything.

So what are your annual profits as a business? What's the turnover? Are you VAT registered?

Are you minimising your pay when you could be taking a proper wage (like the feckless (mostly men) who do the same for CMS calculations)?

Or do you only make just over £1k profit per month anyway?

If you are a Director and employee you are treated as being self employed so your profit in the qualifying period will be the figure they use not what you pay yourself. You maybe in line for a hefty fine if your profit has not been reported what you pay yourself has nothing to do with it. It is their business. You have not read the rules correctly.

It really is as simple as previous posters have explained. They are ensuring you aren't purposely paying yourself a small amount when profits dictate you could be paying more and claiming less UC.

Although for tax and accounting purposes the limited company is a separate legal entity in its own right, and you would not be considered self employed (instead you would be an officer or employee of the company), UC rules that this is different and they consider you as self employed, and therefore your company's profits are taken into account as if they were your own.

Don’t you have your audited accounts that you can send them?

And if your business isn’t making money then maybe it’s time to try something else?

I don’t meant to be rude but clearly they need to see how much the business makes to see if you need UC? It’s weird you didn’t have to for the first year.

Agree.

Give Citizens Advice a call and they will be able to tell you of any benefits entitlements

I would imagine it's standard. What if you are making £1000s a month and only paying yourself a nominal amount?

It's public money, they are duty bound to make sure you're not diverting or hiding income.

I thought for self employed mortgages you need to show more than a couple of months of earnings.

You can't earn 12k then bump it up for a few months to get a mortgage and put it back down. Then there's the issue of having savings in your name.

I think its quite obvious UC would want to see the detail of your business. To stop people under paying themselves, on purpose, so they can continue to claim.

After reporting the profit any money held in your business account relating to this profit is counted as savings in your own name too so if it is more that 6k or 16k your entitlement to UC will be questionable. Unfortunately, HMRC must have had access to your company accounts and are now starting to investigate you.

Surely if its a limited company, you must have accounts. It won't be that difficult. I'm presuming that you are under the VAT threshold? But even so you must have decent accounts to know what corporation tax to pay.

Why wouldn’t you do this anyway rather than relying on the taxpayer to top you up..?

To stop people under paying themselves, on purpose, so they can continue to claim.

Which would appear to be what OP's doing.

It's hard to believe you were intending to get a mortgage on a £12k salary, @Muva14. And what did you mean by waste time writing out all the income and expenses? Are you running a limited company with no accounting?

That poster may still be on crap money and entitled to UC. Most people on UC are in work.

Do fuck off.

Well exactly. This thread has a whiff about it…

They’re on crap money because they’re self employed and paying themselves a tiny salary so they can top up.

So, no, you can.

I suspect UC will want the accounts in a different format to hmrc and companies house so they will effectively need doing twice.

@Naptrappedmummy you were referring to a PP who is SE. They could be a cleaner on £ or a brain surgeon on ££££. The point is that being SE on UC is complex, and that PP may still earn the same or even less as an employee than they do was SE, and still be eligible for UC just with less faff every month in proving their income.

The OP however is potentially a very different ballgame.

How are you running a business without keeping a record of expenses and income. Providing this report should not be difficult. It shouldn’t be anything more than sub setting your records by date and copy and pasting.

you could easily be paying yourself a trivial amount and keeping all the profit in the business.

Firstly, I am in no way relying on taxpayers, the whole purpose of this thread is to ensure I am not doing anything wrong here. There is a lack of understanding on my part, for which I have come here for advise and to learn. I too will be paying taxes if there are any profits and such earned to HMRC I'm sure? I am just trying to figure out how to navigate my monthly situation as I am new to this all and am no accountant. I haven't had 'minimum floor' explained properly. When I have questions in my business, I can always ask an accountant. With Universal Credit, it's a tough one.

Obviously I wouldn't want to be on UC forever, hence haven't received any money from them for the last few months, nor would I be expecting a mortgage on 12k income.. Whether it's in my business or at a job. I am trying to understand mainly what benefits are people usually entitled to when not on things like UC. They all seem to lead back to UC.

I don't feel my business would do very well if I earned more than 1k a month from it as its still new, that's all. But would that mean that extra money is seen as profit? God knows

Who would be the best people I could speak to? Or do I need to get myself an accounting text book at this rate?