Self employment question universal credit

[CuriousClaimant]

I am starting a business from home but before I do I want to understand how much I am allowed to pay myself from it when I’m on universal credit.
I read something somewhere can’t remember where that said I will get paid £10 for 40 hours of work, but that sounds ridiculous?
and can I pay myself as a business expense or does it come under profit?

There’s lot of info on gov.uk and citizens advice websites about this. Have a proper read up on it so you’ve got the facts before going into it.

I am self employed and get some UC.
Every month you will be asked for your self employed earnings then you will be asked for your expenses, what ever profit is left will be classed as your earnings.
how much they will deduct what your entitled to will depend on what your profit is each month.

The first £684 doesn’t effect your UC, every £1 you earn after that will deduct your UC by 55p

example-

UC entitlement- £400 per month
Self employed earnings- £1000
£1000-£684= £316
£316 X 0.55 = £173.80
Therefore Deduction from entitlement for earnings would be - £173.80
UC entitlement that month would be
£400 - £173.80 = £226.20 UC
Hope this helps 😊

If you are going self employed then you will need to report this as a change of circumstance in your journal.
This should trigger an interview at the Job Centre where they can better explain things and hopefully answer any questions you have.

I thought you had already had advice on your similar thread about UC. https://www.mumsnet.com/talk/money-matters/5448410-self-employed-universal-credit-questions?reply=148700628

You earn what you earn as a self employed you have to set up a Ltd business to pay yourself as an employee.

Also I believe Directors have to follow rules in reporting regarding turnover for UC not just what you decide to pay yourself!

You don’t need to operate as a limited company if you are self employed. What you do need to do is scrupulously record all income and expenses for reporting purposes. Also bear in mind after the first year of trading they may apply a Minimum Income floor in to your claim which means they assume an income adjacent to minimum wage before calculating your UC entitlement. This is even if your actual income falls below this. Basically they take the view that if your business can’t generate that kind of income it is not a viable business and require you to find employment

OP is in the LCWRA group (she has posted another thread about this) so the minimum income floor does not apply.

Ok no way of knowing this but hopefully useful to anyone else!

As described above, you don’t decide how much to pay yourself. UC will be decided in-part on your business profits.

If your business does well you may come off UC, until that time you will lose 55% of the business profits to UC deductions.