Uc help please

[HJT95]

Hi I really need some help please, so last month my shares from my company matured and I was given the option to take them out or leave them in I said leave them in, anyway my payslip shows the gain then underneath my normal salary and before tax deductions, then I have been taxed on the gain which is a few thousand. So my total gross pay is £3982.62. but then underneath it has "transfer" which is the shares going back in, then my normal nett pay of £1080.04. I am on UC due to my part time hours, they have obviously seen this from HMRC and adjusted my entitlement for the month right down to £146 which is approx £1000 less than I usually get from them. So I have rang up and told them and their response was "You have a third party deduction coming from your earnings before. In your last payment, this deduction was for £2149.33. This is a non-allowable deduction and will be classed as earnings when calculating your Universal Credit payment." They have said I am unable to get an advance loan to cover my bills this month. Please tell me there is something I can do about this I literally do not know what to do !!! Any help would be appreciated thank you!

You have though……

savings is money you’ve already had cone in and you’ve decided to put away……..thus money is new money you’ve been given by your employer and you’ve said, hold on to it in shares so hopefully I can make some more

Your uc is based on your earnings so no you wouldnt have received the same amount as you usually do if the money hit your account. You keeping the money in your business could be classed as deprivation of assets. I would be very careful if I was you.

You’re not listening OP- it is not the same as having savings in your own savings account, it’s not savings at all, it’s shares.

What has essentially happened here is you have turned your own money down, and told them to keep it. Again, that is fine, but UC aren’t going to pay you to do that. That money isn’t “savings”, it is income that you’ve said you don’t want & to reinvest- again, not wrong, but UC aren’t going to pay you to do that.

Thank you for explaining - and also for saying I havent done anything wrong which I haven't :)

You've got access to extra income and expect uc on top. Cash it in and balance the books. Shares aren't savings so you can use that excuse.

I think you have a misconception that UC is awarded on net pay when it’s actually gross minus allowable deductions. Allowable deductions are pension, NI, tax, other deductions aren’t taken into consideration. For example my employer deducts student loan but UC don’t take that into account for my award.

If the shares are meant for your daughter you would be better off putting them into a ISA for you as then it won't count as savings.

The comment about benefit claimants is unnecessary btw.

Less than £6k savings doesn't affect UC. The issue is it's appeared in her wages when it matured, so looks like income. If it was shares unconnected to work, the account maturing and being reinvested wouldn't have affected her UC payment.

*her

It’s not the fact that you have savings, the shares will be treated exactly the same as a cash savings account, and putting them in an ISA would make no difference.

It’s the fact you had an extra £3000 of income last month. Shares or cash, all still income and treated as earnings. You can choose to put some of that bonus income in savings if you want, either as shares or as cash, but it will always (quite rightly) count as income for UC purposes.

Exactly! PThe more I’ve read up on it I’ve actually done nothing wrong do you know anything more about it please? In particular the part about shares in the advice for decision making - chapter h3, thanks

You have done something wrong for UC purposes.

What is the shares scheme? Do you have money deducted each month or are they something you are given which then mature?

I’m also looking at the DMG.

I’ve been told by advice (and am checking with Citizens Advice) that under DWP rules rules (ADM H3101-H3102), this gain should be excluded from earnings because it’s a work perk from getting shares cheap, not regular pay. Some of you said I should’ve cashed it out or that reinvesting is wrong, like I’m using taxpayers money or depriving assets. But I didn’t choose to “turn down” cash—the default was reinvestment, and I followed the scheme’s process. I can’t see how that’s illegal or wrong when the company set it up that way. If I’d cashed out, my earnings would’ve jumped to over £3k that month, and UC would’ve paid me £0 which is right

It’s a shares incentive plan so I put a certain amount in 5 years ago, my company matched that amount and it’s matured over the 5 years. So because it was a gain it showed on my payslip and I paid tax and national insurance on that amount but my nett pay was still the same as it was transferred back into the scheme which is completely legal , do you know any more on this at all?

The confusion here is your shares matured.
The amount the company paid you was it your shares plus the amount they increased by or just the increase?

If it was just the increase then that is income.
If it’s your shares original value then they would be disregarded maybe?

The large amount is the matured value, but I didn’t get cash / it wasn’t in my nett pay, it was reinvested per the scheme. ADM says it’s not income, so UC’s cut seems wrong

https://assets.publishing.service.gov.uk/media/5a75062240f0b6360e472bb0/Share_Incentive_Plans.pdf

https://data.parliament.uk/DepositedPapers/Files/DEP2023-0791/175.Treatment_of_earnings_V9.0.pdf

It’s late and I’m tired but I think you should ask for a mandatory reconsideration.

Also look at your HMRC tax account and see what was reported through RTI. Has it been processed correctly.

Thank you!

Pick a fund. Enlist the help of a financial advisor to do this if you have no idea what to pick or contact a company yourself and pick yourself out of their products. They come in lower, medium or higher risk categories. But all shares funds are essentially gambling. You could lose the lot. But probably won't, so long as you don't pick a higher risk fund and you're prepared to have the investment as a long term plan. The funds are made up of shares in various companies, the fund manager chooses what, and basically gambles with your money to try to get you the best return on your investment. They buy and sell shares in different companies as the prices rise and fall, to achieve this. Somehow, somewhere, the fund company aims to make some kind of profit themselves (or else they wouldn't do it. I've no idea of the details though), they charge you a fee for managing your fund too. They take that fee out of your investment.

It's not something you do if you want to take the money out next year and you'd be devastated if it was half it's current value. If that's the case, put it in a savings account where regardless of how shite the interest rate may be, at least you won't lose the original capital.

If you're happy to leave it alone for eg 5yrs and you're not going to think it's the end of the world if the worst happens and it's all gone, then invest it.

It's not all or nothing, either. They're currently worth £3k? Let's say in a year they're worth £3.5k but you need a replacement car. You can contact the fund, tell them you want eg £1500 and they'll sell some shares for you and send you a cheque, which you bank and then go out and buy yourself a "new" old wreck to drive. You can leave the remaining £2.5k in there to hopefully increase again over time.

You keep UC informed of the value of the shares whenever they ask. The fund company can send you a statement any time you ask. They won't care if it doesn't go over £6k. So if you see it's at £5.5k maybe take £500 out and spend it. If you go over £6k your UC amount will be decreased. If you go over £16k your UC claim will end.

Disclaimer - I am no kind of financial person, I just inherited some shares once.

It'd not deprivation of assets OP. Those people saying that are idiots, jealous of anyone on UC getting "free money" as they seem it. It doesn't matter where the £3k was. Shares, a very expensive necklace, your bank account, or in your sock drawer. It's £3k, which is under £6k, which means it doesn't affect UC under the "how much savings have you got" rules. If you were an idiot too, you could cut it up into triangles and make bunting with your cash, it still wouldn't be deprivation of assets. It's yours to do with as you wish and UC DGAF about it. The problem you had is it showed up in your payslip.

PS. If you get an investment fund, they don't always pay tax, on anything that tax is owed on, by default. You might have to either tell them to pay the tax because you're a taxpayer. Or if they don't offer that service you'd have to fill in a tax return and let HMRC tell you how much you owe, if anything, I guess.

And obviously an investment fund wouldn't be your employer's scheme, so your employer wouldn't be putting into it, only you. The main difference would be the investment fund means the shares in that fund are split over more than one company, which reduces your risk of losing everything if one company does badly. Your employer scheme means the shares are all in one company, the company you work for. In other words, all your eggs are currently in one basket, but your employer put some free eggs in there for you too. So it's not necessarily a bad scheme. It all depends on how well your company does. As I said, it's a gamble.

Thank you so so much for your help really appreciate it