UC and self employed

Ilovecoffee22 · 2023-09-21T13:01:09+00:00

Hello. I wondered if you could help me. We have been on tax credits for a long time but as you are aware they are moving everyone to UC. I'm currently employed at the moment but I am going to be moving to self employed ( I'm not starting my own business) I will still be working at the same place I was employed but it will be self employed basis supporting a colleague with an access to work grant. I will be doing 23hrs each week. Will it be quite simple in regards to UC I'm getting my self dressed out. I won't be making a profit or anything like that. Thanks

areyouhavinglaugh · 21/09/2023 14:04

Not sure you can be self employed with 1 client

IMustDoMoreExercise · 21/09/2023 14:06

areyouhavinglaugh · 21/09/2023 14:04

Not sure you can be self employed with 1 client

Yes, you need to find out if you can be self-employed.

You would have to register with HMRC as self-employed.

I'm not sure how benefits work I'm afraid.

GachaBread · 21/09/2023 14:15

You have to register with HRMC , they will give you a UTR number.
You can claim UC and will have to enter your earnings, expenses , tax and pension contributions every month into your journal. UC will fluctuate depending on earnings but if you are newly self employed then they will hold of activating the minimum income floor for a minimum of 12 months. When you migrate to UC you will be assigned a self employment coach/work coach and they will guide you through process. It's very easy and very easy to contact people when your on UC

Original poster

Ilovecoffee22 · 21/09/2023 14:20

GachaBread · 21/09/2023 14:15

You have to register with HRMC , they will give you a UTR number.
You can claim UC and will have to enter your earnings, expenses , tax and pension contributions every month into your journal. UC will fluctuate depending on earnings but if you are newly self employed then they will hold of activating the minimum income floor for a minimum of 12 months. When you migrate to UC you will be assigned a self employment coach/work coach and they will guide you through process. It's very easy and very easy to contact people when your on UC

Thank you for this.
It's all very confusing to me as I've never done this before.
I will be supporting a colleague who has been awarded an access to work grant for 3 years doing 23hrs admin a week every week. I will need to set up a pension to pay in too.
Will I pay my tax every year when doing the self assement?

OP posts:

GachaBread · 21/09/2023 14:30

You will have to fill in a self assessment every year. HMRC will send you notification when you need to do this. You can do this online and tax payable will be calculated when you've completed all details required. You can pay in full or monthly whichever suits you.

Original poster

Ilovecoffee22 · 21/09/2023 14:37

GachaBread · 21/09/2023 14:30

You will have to fill in a self assessment every year. HMRC will send you notification when you need to do this. You can do this online and tax payable will be calculated when you've completed all details required. You can pay in full or monthly whichever suits you.

Thank you I think I am starting to understand it.

Will have to attend job centre appointments I was reading that some people do. Something about gainfully self employed?

OP posts:

GachaBread · 21/09/2023 14:43

The job centre will need to see you once or twice initially to check that your hours earnings are consistent,to sign paperwork and their contracts. They just want to know that your in gainful self employment which by the sounds of what you have described it looks like you will be. Then it's usually every 3 months but this could be different in your area. You will be able to contact your work coach through your journal too if you have questions, they usually get back in touch with you within 24 hours.

Original poster

Ilovecoffee22 · 21/09/2023 14:44

GachaBread · 21/09/2023 14:43

The job centre will need to see you once or twice initially to check that your hours earnings are consistent,to sign paperwork and their contracts. They just want to know that your in gainful self employment which by the sounds of what you have described it looks like you will be. Then it's usually every 3 months but this could be different in your area. You will be able to contact your work coach through your journal too if you have questions, they usually get back in touch with you within 24 hours.

Thank you. You've been a really big help. I appreciate it x

OP posts:

GachaBread · 21/09/2023 14:44

Seeing them every 3 months is just for them to support you in your self employment. Once 12 months have passed they will leave you alone

Smfedup · 21/09/2023 14:48

I’m self employed and on universal credit, after the initial set up I haven’t had an appointment with them since they brought back the minimum income floor after covid.

I have to do your accounts every month listing your incomings and outgoings as self employed, then this is taken off what money you get from UC if it’s over your minimum floor, the minimum you’re expected to make every month. It’s a bit over £1000 a month which I’m guessing is minimum wage for me working school hours as a single parent.

Original poster

Ilovecoffee22 · 21/09/2023 14:49

GachaBread · 21/09/2023 14:44

Seeing them every 3 months is just for them to support you in your self employment. Once 12 months have passed they will leave you alone

Ahh yeah I get you. Just was sure about it all. Makes sense though. I will have all my documents and things.

OP posts:

Original poster

Ilovecoffee22 · 21/09/2023 14:51

Smfedup · 21/09/2023 14:48

I’m self employed and on universal credit, after the initial set up I haven’t had an appointment with them since they brought back the minimum income floor after covid.

I have to do your accounts every month listing your incomings and outgoings as self employed, then this is taken off what money you get from UC if it’s over your minimum floor, the minimum you’re expected to make every month. It’s a bit over £1000 a month which I’m guessing is minimum wage for me working school hours as a single parent.

Thank you for your response. Ahh yeah I get you. Do you mean outgoings as in bills or something different?
Sorry for all the questions just want to have everything right in my head and it's working me up.
I will be working 23hrs a week 10-4 on £11.45ph. X

OP posts:

YouveGotAFastCar · 21/09/2023 14:52

Be really careful. If this doesn't pass the test for genuine self-employment, you could end up in hot water with HRMC. One client makes it complicated; and if you're supporting a client and they are setting hours and tasks, it doesn't sound like this is self-employment...

Will you be looking for other clients? Could you subcontract the work to someone else, if you were busy?

Check that you'll make enough with the minimum income floor; too. They'll treat you as having made that, even if you haven't.

Original poster

Ilovecoffee22 · 21/09/2023 14:53

Smfedup · 21/09/2023 14:48

I’m self employed and on universal credit, after the initial set up I haven’t had an appointment with them since they brought back the minimum income floor after covid.

I have to do your accounts every month listing your incomings and outgoings as self employed, then this is taken off what money you get from UC if it’s over your minimum floor, the minimum you’re expected to make every month. It’s a bit over £1000 a month which I’m guessing is minimum wage for me working school hours as a single parent.

I also forgot to mention with it being an access to work grant I will be paid by HMRC as they have awarded my colleague the money so I have to put my claims in to them weekly etc.

OP posts:

YouveGotAFastCar · 21/09/2023 14:54

Ilovecoffee22 · 21/09/2023 14:51

Thank you for your response. Ahh yeah I get you. Do you mean outgoings as in bills or something different?
Sorry for all the questions just want to have everything right in my head and it's working me up.
I will be working 23hrs a week 10-4 on £11.45ph. X

Show quote history

No, not bills. Expenses for your business.

Original poster

Ilovecoffee22 · 21/09/2023 14:54

YouveGotAFastCar · 21/09/2023 14:52

Be really careful. If this doesn't pass the test for genuine self-employment, you could end up in hot water with HRMC. One client makes it complicated; and if you're supporting a client and they are setting hours and tasks, it doesn't sound like this is self-employment...

Will you be looking for other clients? Could you subcontract the work to someone else, if you were busy?

Check that you'll make enough with the minimum income floor; too. They'll treat you as having made that, even if you haven't.

This is through HMRC itself as an access to work grant that they have awarded her and they will pay me for the hours I work from the grant that was awarded.

OP posts:

TheBabylonian · 21/09/2023 15:03

You will likely have problems with any personal pension contributions, many people find they have to fight and fight and even go to tribunals to get them to allow/deduct personal pension contributions for the self-employed.

They will also likely badger you to get more than the one client too.

YouveGotAFastCar · 21/09/2023 15:08

Ilovecoffee22 · 21/09/2023 14:54

This is through HMRC itself as an access to work grant that they have awarded her and they will pay me for the hours I work from the grant that was awarded.

Show quote history

Okay, I'm familiar with that set up.

That makes it even more important that you have everything set up correctly; as HRMC will be very aware of you.

Do you pass this checker? https://www.gov.uk/guidance/check-employment-status-for-tax

Check employment status for tax

Use the Check Employment Status for Tax (CEST) tool to find out if you, or a worker on a specific engagement, should be classed as employed or self-employed for tax purposes.

https://www.gov.uk/guidance/check-employment-status-for-tax

Original poster

Ilovecoffee22 · 21/09/2023 16:34

TheBabylonian · 21/09/2023 15:03

You will likely have problems with any personal pension contributions, many people find they have to fight and fight and even go to tribunals to get them to allow/deduct personal pension contributions for the self-employed.

They will also likely badger you to get more than the one client too.

This sounds like a night mare I do not need. I've been doing a lot of reflection and I am not sure this would be the right path for me.

OP posts:

areyouhavinglaugh · 21/09/2023 16:40

Interesting about pension payments, I wonder if it's similar to tax credits and when you've done your self assessment you get a huge pay out in April?

If you are self employed you can only pay into a private pension the exact amount you earn in profits.

Blackbyrd · 21/09/2023 16:46

I doubt that the DWP will accept that you are gainfully self employed based on your job description

BCCoach · 21/09/2023 17:00

Ilovecoffee22 · 21/09/2023 14:51

Thank you for your response. Ahh yeah I get you. Do you mean outgoings as in bills or something different?
Sorry for all the questions just want to have everything right in my head and it's working me up.
I will be working 23hrs a week 10-4 on £11.45ph. X

Show quote history

Did you quote for the work? Will you be working completely independently for your client or will you have someone managing you and telling you how to do the job? Will you invoice your customer at regular periods? Could you substitute someone else to do the job for you if you wanted to?

If the answer to any of those is no, then you're probably not self-employed.

Original poster

Ilovecoffee22 · 21/09/2023 17:35

Blackbyrd · 21/09/2023 16:46

I doubt that the DWP will accept that you are gainfully self employed based on your job description

Yes I'm beginning to see that however that is not how they made it sound.

OP posts:

PickledPurplePickle · 21/09/2023 17:46

Sounds like disguised employment to me

Original poster

Ilovecoffee22 · 21/09/2023 17:47

PickledPurplePickle · 21/09/2023 17:46

Sounds like disguised employment to me

Yes I agree.
I was just told that I could go self employed. 23hrs a week and would send my invoice (claims) to the dwp and they would pay my wage. The grant for my colleague was awarded for 3 years. However I see it wasn't like that at all. This is why I'm glad I've found out more

OP posts: