Reporting earnings from self-employment (received after self-employment ended)

[Jaybee in CF]

Hi all, 

 

I'm on UC

 

when I initially made my claim, I stated that I had an amount of wages still due to me.

  I have since paid myself about half of that (from my Ltd co).

 

  I just got a notification that I need to report these earnings, however that is what the HMRC PAYE portal is for. 

 

The earnings aren't high enough for Income Tax or NI, nor are they enough to take me over the personal capital threshold.  

 

 this post is just a reality check to see if I've done the right thing so far.  

[brassnecked]

But as far as UC is concerned they are Income which they will apply the 63% Taper to and deduct it from your UC.

[Jaybee in CF]

These earnings are for work done BEFORE my claim, though.

[brassnecked]

They probably will class them as earnings for the current assessment period you take them.. I think UncleBulgaria is best one to answer this for sure.

[unclebulgaria67]

It is earnings when actually received that is relevant, not the period you worked.

 

If you reported to HMRC, then UC will apply these when received.

 

 

[brassnecked]

Thsnks UB thought that is the case, not relevant when earned, but when recieved.

[Jaybee in CF]

1 minute ago, unclebulgaria67 said:

It is earnings when actually received that is relevant, not the period you worked.

 

If you reported to HMRC, then UC will apply these when received.

 

 

Drat, yes.  I was doing a bit of reading and confirmed the same.  Dammit. Now I'm a grand down.   

[tomtom256]

Actually if self employed its all income and expenditure that needs reporting, not just the PAYE from your ltd company.

 

It makes no diferent if you are a director who pays themselve via PAYE, as for UC purposes you are self employed and have to report both income and expenditure and the wages via PAYE would be classed as an expense under UC legislation.

 

You would also need to prove you are no longer self employed and that the business has been closed, if you are no longer classing yourself as being self employed.

Edited October 8, 2019 by tomtom256

[Jaybee in CF]

5 minutes ago, tomtom256 said:

Actually if self employed its all income and expenditure that needs reporting, not just the PAYE from your ltd company.

 

It makes no diferent if you are a director who pays themselve via PAYE, as for UC purposes you are self employed and have to report both income and expenditure and the wages via PAYE would be classed as an expense under UC legislation.

 

You would also need to prove you are no longer self employed and that the business has been closed.

Well the company is still live although not active.  The only thing in proof I have is timesheets up to just before I stopped the last contract. 

[unclebulgaria67]

3 hours ago, Jaybee in CF said:

Well the company is still live although not active.  The only thing in proof I have is timesheets up to just before I stopped the last contract. 

 

So when you applied for UC you told them of self employment income and attended Job Centre appointment, where they went through the information. You now have a to-do action to report your income and expenses ?

 

is this correct ?

 

If so, as Tomtom indicated above, you need to think about what you need to report. If in doubt, you might have to seek further guidance from the Job Centre.  If the business is not operating i.e you have no or very little current income and expenses; and you are simply drawing down money from the business reporting this to HMRC as wages, then I would question why you are only taking half what you could have. Why not take 100% of what is due, as when you take the other 50%, it will affect another UC assessment period ?

 

Suggest you call UC and book a self employment review appointment, so you can take business accounts with you, to discuss best way forward.

[Jaybee in CF]

1 hour ago, unclebulgaria67 said:

 

So when you applied for UC you told them of self employment income and attended Job Centre appointment, where they went through the information. You now have a to-do action to report your income and expenses ?

 

is this correct ?

 

If so, as Tomtom indicated above, you need to think about what you need to report. If in doubt, you might have to seek further guidance from the Job Centre.  If the business is not operating i.e you have no or very little current income and expenses; and you are simply drawing down money from the business reporting this to HMRC as wages, then I would question why you are only taking half what you could have. Why not take 100% of what is due, as when you take the other 50%, it will affect another UC assessment period ?

 

Suggest you call UC and book a self employment review appointment, so you can take business accounts with you, to discuss best way forward.

 

No such To-Do action.  I informed them of the fact I'd been self-employed, that I intended to draw down money that would not bring me over the capital limit.  I recently got a message asking whether that money had arrived in my account.  I haven't yet logged into the HMRC PAYE portal, I just got the access codes last week, I will enter all monies taken tomorrow.  Reason for not paying myself in full was because my agent is a con-artist who wangled 30 days on an invoice that should have been paid in 14, and I'd read up that if you withdraw money that leaves the company

immediately unable to pay its Corp Tax upon demand, the payment is ultra vires, and thus the company is technically insolvent. Hence I've taken it out in small monthly chunks that don't attract NIC or Income Tax.  

Surprised the JC haven't asked for all this already - I suppose the issue now is whether they will accept the above as reasonable grounds for delayed payment, I have a raft of emails from the agent trying to get out of paying, and of course the date he released the money.  

Edited October 8, 2019 by Jaybee in CF

[Jaybee in CF]

Just to add I only set up the company after the beginning of this same FY.

[unclebulgaria67]

You must report self employment and book a Gateway appointment at Job Centre. 

 

Reason is active company with wages still being drawn. This needs to be addressed properly as soon as possible. Job Centre should have picked up on this if you told them previously.

[Jaybee in CF]

2 hours ago, unclebulgaria67 said:

You must report self employment and book a Gateway appointment at Job Centre. 

 

Reason is active company with wages still being drawn. This needs to be addressed properly as soon as possible. Job Centre should have picked up on this if you told them previously.

About the only thing they don't know is that it's a Ltd company, it's name, and I'm Director.  On top of that nobody told me it makes a difference what Assessment Period my payments to myself fall in. 

[unclebulgaria67]

Thing is that when you report wages through HMRC, it will show the Ltd company name on the UC earnings feed data and if notes were not added about your previous conversation, it may lead to questions being asked.

 

Book an appointment and clear this up to avoid this becoming an issue.

 

[Jaybee in CF]

57 minutes ago, unclebulgaria67 said:

Thing is that when you report wages through HMRC, it will show the Ltd company name on the UC earnings feed data and if notes were not added about your previous conversation, it may lead to questions being asked.

 

Book an appointment and clear this up to avoid this becoming an issue.

 

Thanks, I have now informed them of the rough amount I've paid myself, and requested a review via the notes, but apparently they only review if I've been actively self-employed.  What they want is for me to report payments made after the self-employment to the "Benefit Centre", split per Assessment Period - ouch .  

I haven't uploaded any payslips yet, which is another failing seeing I've had the company a few months now, and that will probably incur some fines, but I've now installed the HMRC Paye Tools software which enables upload.