Self Employed and Universal Credits

[Sarahjc]

Hi,

I don't know much about Universal Credits, but I was wondering.... I'm a photographer, and I receive booking fees for my services, these are paid months in advance sometimes, and in certain circumstances, I might be required to hand back the booking fee. So basically I don't "spend" my deposits until the work is done, just in case I have to refund it. Which leads me to wondering how I would record this deposit as an income for that particular month, when I'm not actually spending it and may have to return it at a later date?

Can anyone shed any light on this please?

Thanks,
Sarah x

 

[FD Capital]

I am not an expert on Tax Credits or Universal credits but as as far as I know your entitlement is based on your final accounts for the year so whilst you estimate your income only the final outturn counts. Prepayments of income would not count, but you need your accountant (or get one) to help you prepare accounts correctly.

 

[Newchodge]

I am not an expert on Tax Credits or Universal credits but as as far as I know your entitlement is based on your final accounts for the year so whilst you estimate your income only the final outturn counts. Prepayments of income would not count, but you need your accountant (or get one) to help you prepare accounts correctly.

I think the intention is that, at least quarterly or, possibly, monthly accounts are provided because the entitlement is based on monthly income.

 

[paulears]

Self-employed people are difficult to quantify from the income point of view. I can tell people instantly what my turnover is, what my generated invoice total is and even what my cumulative outgoings are. However - I have never been able to work out how much I earn until the accountant tells me, and every year his opening comment is always a surprise - You've had a good year this year, or you've not had a very good year this year. No idea. Often my gut reaction is I have done well, to find I haven't or like last year discovered I'd done better than I thought. I would have no idea what to put on a form!

 

[Mr D]

Universal credit also has a minimum income issue. If a self employed person claims to work 40 hours a week and has profit of £9k for example, they get treated as though on minimum wage for income purposes.
New self employed have 12 months after starting before that is applied. So not only must live on their income they must also expand their business on that same income sufficient to make enough 12 months down the line.

 

[Sarahjc]

Thanks for your replies, yes I'll be moving onto it in a few months and just trying to prepare myself. I do have to provide monthly statements, and then I receive UC based on those earnings. Obviously I'm hoping to earn too much to even qualify, but that's not going to happen just yet. It's just having to put down my deposit payments for them to possibly be taken away from me at a later date (and I would still get penalised by UC) but I'm not on the understanding that you only submit your profit anyway, and if someone were to take back a deposit at a future date, then for that particular month it would become an expense.