UC migration for employed & self-employed personm & Transitional Protection

I’ve read recent posts about migration and questions being raised.  I don’t think mine is as technical as that, but you can prove me wrong!

My client is employed part-time.  She is also an artist and sells her work.  Most of her sales are in the summer months at exhibitions.  She currently receives tax credits and has her migration notice.

Obviously her tax credits are calculated over the annual income but UC each month.  As in in the post mentioning farmers, she will have to produce her income on a monthly basis to UC.  Savings aren’t an issue, but during summer months, her income is likely to go above her UC calculated allowances.  She believes although she may sell some items during the winter months, most of her income from sales will be finished this month. 

We’re not talking large amounts of money.  Her employment is her main source of income and her art provides a top up.

Can anyone advise:
a)  whether she will retain TP during the summer months or any other time if she has nil awards,
b)  whether her UC claim will close altogether and
c)  whether there is a way that her “accounting” (simple sales less costs) can be done in such a way as to smoothe her self employed earnings over the year? 

Thanks in advance!

(a) - Yes, if she doesn’t float off UC for any longer than three consecutive months her transitional element will still be waiting for her at the other end
(b) - No different from a normal case I think, the same journal will be kept open with the same AP cycle for up to six months with income too high to qualify for UC, but the transitional element will fall away after three
(c) - So many conflicting factors to consider.  It can be advantageous to float off UC for short periods and qualify for a higher amount the rest of the time, although I acknowledge the admin is a pain.  But you don’t want to risk having the benefit cap or MIF applied in slower months.

Between you and me, and not for DWP’s ears, realistically if she delays declaring some of the income received in July until, say, December, is DWP going to be any the wiser?  As long as she declares it all at one time or another by the end of the tax year, I can’t see the harm.  After all, I’m self-employed and, quite properly and legitimately, I have yet to declare any income at all to HMRC for the 2022/23 tax year.  They’ll get my tax return about 11:30pm on the last Sunday in January as per, because I am disorganised.  But it will all be accounted for, I’m not escaping any tax.  I don’t see a problem with s/e UC claimants massaging the spread of income a little bit to smooth things out - as long as it all gets reported one way or another.  Obviously you could not possibly advise a client to do anything like that, I’m just musing out loud.

Actually, forget that - a better idea would be to stagger her invoicing then the income would genuinely and honestly be spread over the year.  Or do the punters pay in cash on the spot - is it not the sort of business where you send a bill?

Choosing when to pay bills, pension etc is a legitimate way to arrange the best offsetting result.

HB Anorak - 20 October 2023 11:55 AM

(a) -

Actually, forget that - a better idea would be to stagger her invoicing then the income would genuinely and honestly be spread over the year.  Or do the punters pay in cash on the spot - is it not the sort of business where you send a bill?

Thanks for your reply.  I’ll check on that, but I guess people buy items when they see them displayed at exhibitions and the like.

On the point about the minimum income floor potentially applying if earnings go low - it would only apply if she is in gainful self-employment which means she is ‘carrying on a trade, profession or vocation as their main employment’. If this isn’t her main employment then she may not be gainfully self-employed so the MIF would not apply.

LITRG