Self Employed

Hi, would be grateful for some assistance.  We have a customer who is self employed, currently no HB, NO WTC and works as a taxi driver. (lives in a full service UC area). After payments have been made (hire car, rank fee’s etc) she is left with £90.00 as income. Has been self employed for over a year, but recently moved to a different company to pay lower hire charges. (April of this year)

Expenses to hire the cab insurance are 160pw and fuel is 40 - 50 per week)

Just wondering what the best course of action to take in relation to claiming UC? Would she be hit by the MIF straight away?

She has also mentioned that she suffers from depression and anxiety and struggles to work more than 30 -35 hours per week.

Many thanks

Reg 63 of the UC Regs says -

Start-up period
63.—(1) A “start-up period” is a period of 12 months and applies from the beginning
of the assessment period in which the Secretary of State determines that a claimant is
in gainful self-employment where–
(a) the claimant has begun to carry on the trade, profession or vocation which is
their main employment in the 12 months preceding the beginning of that
assessment period; and
(b) the claimant is taking active steps to increase their earnings from that
employment to the level of the claimant’s individual threshold (see regulation
90).

So at the start of the UC claim I guess the Secretary of State will determine that your client is in gainful self-employment so they should have a start up period of 12 months during which the minimum income floor does not apply. Any other views welcome as I have no experience of this in practice.

The way I read it there can only be a start-up period if the business commenced during the preceding 12 months: subpara (1)(a).  Also Reg 59(2) provides for flat rate mileage to be allowed in place of actual fuel and “acquisition” costs.  Couple of points arising from that:

- I think Reg 59 is optional, notwithstanding the closing words of para (2):  “the only deduction allowed for the acquisition or use of that vehicle is a deduction under this paragraph.  I take that to mean that if the Reg 59 option has been chosen you cannot then claim actual costs as well ... but it doesn’t make it compulsory to go with Reg 59 in the first place
- If “acquisition” includes hire charges it is probably better for this claimant to submit actual expenses, but if hire charges are not covered by “acquisition” (because it doesn’t become your car to keep) I should think Reg 59 for all the other costs plus actual cost of hire charge would be more advantageous