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Universal credit for the self-employed

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Universal credit for the self-employed

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
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This guidance note sets out the special universal credit rules for the self-employed and company directors.

For universal credit generally, see the Universal credit guidance note.

The self-employed for universal credit

The scope of the self-employed rules for universal credit are wider than the income tax definition of self-employment. They cover contractors, sub-contractors, gig-economy workers, company directors and anyone ‘working for themselves’ (ie sole traders and partners).

A work status of ‘self-employed’ needs to be reported to DWP as part of the claims process so that the benefit can be correctly calculated. Foster carers do not need to register as self-employed for universal credit, but may need to register as self-employed with HMRC, even where income is covered by qualifying care relief (see Simon’s Taxes E1.701).

The self-employed and company directors can claim universal credit, but are subject to additional rules.

In overview, these cover:

  1. •

    companies analogous to a partnership or one-person business

  2. •

    being gainfully employed

  3. •

    start-up periods

  4. •

    minimum income floor

  5. •

    surplus income

  6. •

    record-keeping and reporting of income and expenses

See

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  • 28 Nov 2023 12:41

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