Advice on self employment and universal credit please

[Lostsoul231]

I am hoping to receive some advice please.

I was recently made redundanct and due to family circumstances, am not in a position to seek full time office based employment at present.

I had to sign on in November and have been put on universal credit.

I am now going to become self employed and work from home but wonder how this will affect my universal credit claim as income won't be regular as a full time employed position would be.

Any advice or recommendations for accountants who specialise in self employed people who are on universal credit. I am a single parent and have never claimed any type of benefit before as I've always been in full time employment.

Many advice would be greatly appreciated

Hi there. I would suggest looking at tax credits now. I.e. Working tax and child tax credits. You can read about it all on gov.uk and they have online calculators so you can estimate how much you'll be earning so you can see what kind of support you'll be entitled too. As long as you're earning under 17k a year, Working Tax credits will be about to help.

Hope you find this useful

Thanks but I won't be on that now as im on universal credit

Sorry I realised that after I sent my response. Hopefully someone who is on universal credit can help.

I'm SE and have been looking at how UC will affect me.

My understanding is that you will need to declare the hours you work, and how much you earn. (Based on estimates & business plans in year 1). If it's lower then the NMW, your UC will be calculated based on the NMW - if you earn more, it's based on your actual earnings.

Calculations are based on estimates/previous year figures and then adjusted once your tax return has been submitted - I found this meant that I am forever receiving or repaying the adjustment from the previous year.

When HMRC bring in RTI Tax, then UC will be based on more recent figures.

Thanks.
Sounds complicated.
I won't know how much I'll earn though as I'm literally only just starting out so won't be able to provide an estimate of future earnings
I think I may have a contract lined up for the new year but haven't agreed a rate yet or how long they'll want me for. It's a bit scary as I'm taking the leap into the unknown and have no other income

I think there's an expectation now a days that people who decide to set up in business while relying on benefits do have a realistic business plan which works towards a reduction in their reliance on benefits over time.

Previously, it's been a loophole which has supported people to run "hobby businesses" without any real likelyhood of ever making a living wage.

The JobCentre or local Chamber of Commerce may run "new business" courses that will help you put together a business plan and help you get set up.

Thanks New
I will look into that

Hiya, I know friends in a similar situation and have been told that when on UC and acquiring work, the set up will now be:
For every pound you earn you should get 65 p taken off your benefit
: i.e. If you earn £10 working, they'd take £6.50 off your UC, and if you earn £20 working, you'd get £13 taken off etc etc.
Am sure you get the picture- a bit mean of them to take that amount off some might say, but there you go 😗

Newnn, you are so right about the hobby business, I think realistically there is work for the self employed, such as virtual assistants, cleaning, driving and more options to work from home. Op, try and get on a business course, your first year the tax office are very easy going, and you can talk to them. You should be able to still claim something, as alot of what you are earning is expected to be ploughed back into your business. Also you are allowed to work for who you want doing what you want, so if for example, you get offered gardening work but are registered as being a painter and decorated, you can still do it, you just declare the amount. I think it can allow you time to see what work opportunities are out there, and by year 5, you'll find you'll be a lot less dependant on benefits long term, as you would have the interchangeable skills needed such as bookkeeping, marketing, chasing payments, losing customers, setting the right rates. Good luck

Incidentally I started off self employed 6 years ago as a dog walker, but ended up being offered cleaning work which I found to be more in demand and more profitable, am now doing airbnb caretaking work which is again alot more profitable, but not so much in demand. The skills I learnt being self employed have really helped me to be more flexible, and able to change with demands. Despite their reputation, the tax office can be really helpful, all you have to do is keep accurate records of your total income and business outgings.

the tax office might be helpful, but unsure if DWP / universal credit would be to the same extent...who knows.