If you are self-employed and you claim Universal Credit you must keep records and report your income for tax purposes. If the profits are not high enough to fully cover a loss, the remaining loss will be carried forward to the next month when you make a profit.Ī loss will stop being taken into account once all your losses have been accounted for or if your self-employment business ends. If you make a loss in 1 month, the loss will be stored and taken into account in months when you make a profit. This may reduce the amount of Universal Credit you receive in later months, or perhaps mean that you can’t get any Universal Credit payment in those months. If you earn more than £2,500 over the monthly amount you can earn before your Universal Credit payment is reduced to £0, you are said to have surplus earnings. Your earning and losses from 1 month can be taken into account when working out how much Universal Credit you receive in a later month. These earnings count as as earned income and are used to calculate your Universal Credit payment. Your earnings from self-employment are calculated as the total amount your business received in, minus any payments you or your business paid out on: How your self-employed earnings are worked out If you’re in a business partnership, you must report your share of the business income and expenses.
If you pay yourself a salary using the PAYE system, you should report this as an expense when reporting self-employed earnings, so that this amount is not counted twice. You must report all money received in by the business and all payments out of the business each assessment period. If you are running your business through a company that you own (including where you are a director), or receive any income from a company over which you have control, this is treated as self-employed earnings. Only report expenses that are directly related to your business.įind out more about business income and allowed expenses Business partnerships and directors
You must report your self-employed income accurately. You may be asked for receipts for any expenses you claim. How much tax and National Insurance you paid How much your business spent on different types of expenses, such as travel costs, stock, equipment and tools, work clothing and office costs You’ll need to keep a record of and report the payments received into and paid out of your business each assessment period. Self-employed earnings are reported on a simple ‘cash in, cash out’ basis for Universal Credit. If you are not able to report online, you must call the Universal Credit helpline to report. You should report your income online by completing the ‘Report your income and expenses to-do’ on your account. You will also get a text message or email to remind you to report. You will get a ‘Report your income and expenses to-do’ in your Universal Credit account on the last day of each assessment period. For example, if you first submitted your claim on the 7th of the month, your assessment period runs to the 7th of the next month. An assessment period is a 1 month period, and it starts on the day you submit your claim. You must report your self-employed earnings on the last day of your monthly ‘assessment period’.Īssessment periods are used to calculate your Universal Credit payments.
How and when to report your income and expenses If you report late, your payment may be delayed. You will not get your Universal Credit payment until you have reported your income and expenses. If you are self-employed you must report your earnings from self-employment every month, even if you have not earned any money. This includes if you combine self-employment with other work, are a sub-contractor, or run your business through a company. This guide is to help you understand what you need to do if you have self-employed earnings and are claiming Universal Credit.