Will the self-employment emergency grant affect my Universal Credit payments?

[ad_1]

SELF-EMPLOYED workers have been offered a raft of help from the government including emergency grants, but will these affect your Universal Credit payments?

Under the self-employment income support scheme (SEISS) self-employed workers who made less than £50,000 in profit can claim up to £7,5000 to help cover costs if they’re unable to work due to the coronavirus crisis.

⚠️ Read our coronavirus live blog for the latest news & updates

Universal Credit payments will be affected if you get a self-employed income support scheme grantCredit: Alamy

Payments are based on 80 per cent of your average earnings over the past three years, although losses are counted and some people, such as limited company directors, are excluded.

You can receive Universal Credit payments while you wait for your grant as well as once you’ve got your grant as long as you’re not now earning above the threshold.

Here’s what you need to know.

Will Universal Credit payments affect how much I get under SEISS?

When HMRC calculates if you’re eligible for SEISS and how much you’ll get it will look at your trading profit minus any allowable business expenses.

The taxman will also take into account your non-trading income. This includes money from earnings, property income, dividends, savings income, pension income, overseas income, and other miscellaneous income.

Miscellaneous income is where it gets slightly complicated, as that will only taxable cash.

Self-employment grant: who can claim?

YOU can claim if you’re a self-employed individual or a member of a partnership and you:

have submitted your self assessment tax return for the tax year 2018/19
traded in the tax year 2019/20
are trading when you apply, or would be except for coronavirus
intend to continue to trade in the current tax year (2020/21)
have lost trading profits due to coronavirus.

Examples of the most common taxable benefits include jobseeker’s allowance (JSA), carer’s allowance, and the state pension – you can find a full list on Gov.uk.

So these would be used to calculate how much you can receive under the grants scheme.

But benefits, such as tax credits and Universal Credit, aren’t taxed. This means they won’t be used to calculate your grant.

Will the SEISS grant affect my Universal Credit payments?

Yes. The SEISS is a taxable grant, which means it will be counted as income when your Universal Credit payments are calculated.

This means your Universal Credit payments are likely to fall and could potentially stop altogether when you receive your grant.

HMRC says the grant won’t, however, affect Universal Credit claims for earlier periods so you won’t have to repay any Universal Credit already received.

Do I need to tell Universal Credit if I get a grant?

Yes. The Department for Work and Pensions (DWP) says you should notify it of any changes to your income, such as the SEISS grant.

With Universal Credit, you can do this via your online journal for the relevant assessment period. For other benefits you’ll need to call to get in touch.