Universal Credit: What expenses can I claim for on Universal Credit?
UNIVERSAL CREDIT is a lifeline for millions across the UK, providing a monthly payment for several different benefits. But what expenses can I claim for on Universal Credit?
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Universal Credit is a monthly payment replacing separate benefits like Job Seekers Allowance and Child Benefit. Eligible claimants receive the payments on average every four weeks, and must fit a certain criteria to qualify.
Universal Credit replaces benefits like Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) and Working Tax Credit.
The switch over to Universal Credit is being rolled out automatically, meaning you do not need to apply again if you are already receiving benefits.
For those thinking of applying, you may be able to get Universal Credit if:
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
What expenses can I claim for on Universal Credit?
You can claim Universal Credit if you are self employed, and have been impacted by the coronavirus outbreak.
You can also claim if your monthly earnings meet the minimum income floor.
To do so you must give information on your income and earnings at the end of each monthly assessment period.
You need to report
- How much you earned from self-employment, even if this figure is zero
- Any money paid into a pension
- Information about your business
These figures are so the Government can calculate the amount of Universal Credit you receive each month.
You won’t get paid until you’ve reported your income and expenses at the end of the assessment period.
You need to report all payments in and out of your business during the monthly assessment period.
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This includes
- The total amount your business received
- How much your business spent on different types of expenses such as travel costs, stock, equipment and tools, clothing and office costs
- How much tax and National Insurance your business paid
Expenses are allowed if they were paid in the assessment period and are "wholly, exclusively and necessarily for your business", "were reasonably incurred" and "an allowable expense".
Expenses which are not allowed to be claimed include
- Business entertaining
- Repayment of capital business loans
- The cost of some capital assets including property, shares, investment assets, and costs related to buying and use of car
Some examples of allowable expenses include:
- regular, day to day costs of the business such as rent, wages, cleaning of premises, accountancy fees, stationery, advertising, phone bills
- purchase of stock
- utilities, phone and travel costs (provided it is not specifically excluded – see below)
- expenditure on the purchase, lease or acquisition of tools and equipment
- VAT