Home Finance Universal Credit UK: How self-employed profits and losses affect payments – full...

Universal Credit UK: How self-employed profits and losses affect payments – full details


Universal Credit can be claimed by the self-employed who have seen their business struggle. To be eligible, self-employed claimants will need to hit the same eligibility criteria as regularly employed workers but their business operations will be regularly assessed.

Self-employed claimants will go through a monthly assessment period where they will need to report how much they’ve earned from self-employment, how much they’ve paid into a pension and general information on the business.

These rules will also apply to company directors, even if they pay themselves through PAYE.

Information on the business will include the total amount the company has received, how much the business spent on different types of expenses such as equipment and how much tax and National Insurance was paid.

However, business assets do not need to be reported, with this including buildings or company cash.

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This can also include any losses made from self-employment.

Where losses occur, only the employment earnings will be used to calculate how much Universal Credit can be received.

Self-employed claimants will also need to report changes in their circumstances which can include:

  • If they close your business
  • Start a different kind of business
  • Take a permanent job
  • If they’re no longer able to work

If a person is self-employed and claiming Universal Credit, earnings and losses from one month can be taken into account and carried over into the following month.

If claimants earn more than £2,500 over the monthly amount they can earn before they receive no Universal Credit payment at all, they will be said to have surplus earnings.

This can reduce the amount of Universal Credit a claimant can receive in later months or mean no payment is awarded at all.

Where a loss is made in one month, the loss will be stored and taken into account in months when a profit is made.

If the profits are not high enough to fully cover a loss, the remaining loss will be carried forward for the next month when they make a profit.

Losses generally will stop being taken into account once all the losses have been accounted for or the self-employed business ends.

New self-employed claimants do not need to attend jobcentres when applying but they may need to take part in a telephone interview.

Self-employed claimants can also receive support from SEISS on top of their Universal Credit payments.

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