Universal Credit: Self-employed claimants need to report these changes in circumstance

At the end of March, the government announced a country wide lockdown, resulting in the closure of many businesses considered non-essential. To assist those on company payrolls, the Chancellor, Rishi Sunak, announced the Coronavirus Job Retention Scheme (CJRS), where the government would cover 80 percent of the salaries of furloughed people up to £2,500. However, because this scheme only applies to people on company payrolls, self-employed and freelance people were left in a state of limbo.


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Official advice on the government’s website instructs those who are self-employed to claim Universal Credit, providing they meet the usual eligibility criteria for the benefit.

Universal Credit payments aim to assist Britons with their living costs.

The benefit is paid monthly, and the first payment usually takes five weeks to arrive in the claimant’s bank account. 

Universal Credit payments can vary depending on personal circumstances, such as children, disabilities or financial hardship.

However, for a single person over the age of 25, the standard allowance amount per month is £409.89.

Couples over 25 are entitled to £594.04 to split between them.

For those who are self-employed, it is important to keep track of Universal Credit payments and report any of four key changes in circumstance to the Department for Work and Pensions (DWP).

If a claimant closes their business entirely, this must be reported to the DWP in order to keep claim amounts updated.

Additionally, if a claimant decides to start a different kind of business, this too must be reported.

For those who decide to leave self-employment to take a permanent job, reporting this change will allow the DWP to reassess your circumstances.

And those who are no longer able to work must also report this to the government, as it could entitle them to additional help and support.

In a move to assist the self-employed, the government has recently announced the COVID-19 Self-employment Income Support Scheme.

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In a similar way to the CJRS, this scheme allows self-employed people to claim a taxable grant worth 80 percent of trading profits up to a maximum of £2,500 a month.

The scheme will be available for three months, but could be extended at the discretion of the government.

However, it is important to note the self-employed scheme will not be active until mid May 2020.

Payments will then be made by HMRC by early June 2020.

The grant is to be subject to Income Tax and National Insurance contributions, however the government has offered reassurance that this will not have to be repaid.

While waiting for the grant to commence, self-employed people are encouraged to use the Universal Credit system. 

Britons should record the grant as part of their self-employed income, as it could affect their Universal Credit payments.

It is vital for those who are self-employed to submit their Self Assessment tax return for 2018/19 by April 23, 2020 to be entitled to claim the extra support. 

The Universal Credit system has faced increased strain in recent weeks as over 1.4 million people have contacted the DWP to make a claim.

Universal Credit director-general Neil Couling said 87 percent of people would be provided with their first payment within five weeks, however admitted it was unlikely all claimants would be reached by this time.

10,000 people have been drafted in from various areas of government to assist with the upsurge in demand for the service. 

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