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Forum Home  →  Discussion  →  COVID-19: Employment schemes  →  Thread

Tenant on UC with own company receiving job retention scheme payment

GCH Tenancy Sustainment
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Tenancy Sustainment Team Gloucester City Homes (GCH)

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Hi,
I have a tenant who is a contractor with his own company and is now on UC. He has been receiving job retention scheme payments which he has paid to himself as a salary from his company but did not declare it to UC. My understanding is that he needs to declare it to UC as this is the equivalent of furlough payment. Am I correct?
And should he be viewed as employed or self employed then for UC purposes?
Thank you

Charles
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Accountant, Haffner Hoff Ltd, Manchester

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Claimants in this situation are considered employed and self-employed. He is receiving employed earnings of whatever he pays himself through payroll, and the remaining profit made by the company will be included as self-employed earnings.

The JRS payments from HMRC to the company will count as income for the company. His wage he has been paying himself, assuming it has been done properly through payroll, should be automatically picked up by UC, but he should remember to deduct the wage cost as an expense when calculating the profits of his notional self-employment.

GCH Tenancy Sustainment
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Tenancy Sustainment Team Gloucester City Homes (GCH)

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Charles - 27 April 2021 10:12 AM

Claimants in this situation are considered employed and self-employed. He is receiving employed earnings of whatever he pays himself through payroll, and the remaining profit made by the company will be included as self-employed earnings.

The JRS payments from HMRC to the company will count as income for the company. His wage he has been paying himself, assuming it has been done properly through payroll, should be automatically picked up by UC, but he should remember to deduct the wage cost as an expense when calculating the profits of his notional self-employment.

Thank you - that’s very helpful.

CA Adviser
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Citizens Advice Calderdale, West Yorkshire

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Can I ask a further question?
A client is an employee of her own limited company. She is the only employee and is paying herself a salary of £900pcm gross. She has one child. She would appear to be better off on UC than on WTC/CTC as at present as her housing costs will be included in the UC calculation. She says the company is not making a profit at present due to the pandemic. If it was, how would UC work for her? Would she have to report all the income and expenses of the business to UC each month too, as well as the real time earnings report to HMRC?

Charles
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Accountant, Haffner Hoff Ltd, Manchester

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She would still report each month the income and expenses. This could often be beneficial, as if the company makes a loss it would be carried forward to reduce profit of later months.

Ianb
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Macmillan benefits team, Citizens Advice Bristol

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She will be treated by UC as self employed and will have to report all business income and expenditure to UC on a monthly basis. When the MIF is reintroduced she could be subject to that unless her work conditionality is limited by other circumstances.

CA Adviser
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Citizens Advice Calderdale, West Yorkshire

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So she will be treated as having employed and self-employed earnings.

Ianb
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Macmillan benefits team, Citizens Advice Bristol

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CA Adviser - 04 May 2021 10:17 AM

So she will be treated as having employed and self-employed earnings.

Yes, or employed earnings and self employed losses to carry forward.