Reporting self-employed earnings
You need to report your earnings every month to the DWP - they won't remind you.
You'll have to report earnings for each month the DWP calculate your Universal Credit payments - this is called an 'assessment period'. Your assessment period usually starts on the same date each month - starting 1 calendar month after the date you submit your claim online or over the phone.
You can report your earnings for the month from 7 days before and until 14 days after the end of your assessment period.
Example
Ruth claims Universal Credit on the 8 November. Her assessment periods start on the 8th day of each month.
Her first assessment period runs from 8 November to 7 December. She must report her earnings for this period to the DWP between 1 December and 21 December.
If you can't report your earnings on time
The DWP might be able to base your payment on an estimate of your earnings. You'll need to have a good reason why you couldn't report your earnings on time. For example, if you were admitted to hospital at short notice and no-one else had access to your accounts.
If you don't have a good reason, the DWP will usually stop your Universal Credit claim until you report your earnings.
Contact the DWP as soon as possible to explain why you're reporting your earnings late.
Universal Credit helpline
Telephone: 0800 328 5644
Telephone (Welsh language): 0800 328 1744
Textphone: 0800 328 1344
Relay UK - if you can't hear or speak on the phone, you can type what you want to say: 18001 then 0800 328 5644
You can use Relay UK with an app or a textphone. There’s no extra charge to use it. Find out how to use Relay UK on the Relay UK website.
Video relay - if you use British Sign Language (BSL).
You can find out how to use video relay on YouTube.
Monday to Friday, 8am to 6pm
Calls are free from mobiles and landlines.
Working out your earnings
Add up all the income your business has received during the assessment period - these are called 'receipts'.
Coronavirus – if you get money from the government
Your receipts include money you get from the Self-employment Income Support Scheme. If you get a payment from the scheme, report it in your online journal.
Some income doesn’t count as a receipt, so you don’t need to report it. This includes:
-
money you get from the government to pay furloughed workers
- loans or grants from the government or local council to help with your losses caused by coronavirus, such as payments from the Newly Self-Employed Hardship Fund
Then take away amounts you've spent on your business - these are called 'personal allowances and permitted expenses'. This will give you your final earnings amount.
Personal allowances
You'll need to take amounts for the following off your earnings:
- income tax - if you've paid any that month
- National Insurance - if you've paid any that month
- pension contributions you make
Permitted expenses
You should take away amounts you've spent on reasonable expenses for your business. These might include:
- stock or equipment
- rent for business premises, office or storage space
- insurance - such as liability or buildings insurance
- repayment of interest on a loan - up to £41 a month
- VAT
Costs of a vehicle
You can deduct expenses for the costs of a vehicle you use for your business. The amount you can deduct depends on the type of vehicle you use.
If you use a car for business, you can deduct a fixed amount for each mile you travel for business - this is called a ‘flat rate deduction’.
If the vehicle isn't a car - for example, if it’s a van or motorcycle - you can choose to deduct either:
- flat rate deductions
- the actual expenses of buying and using the vehicle - including petrol, servicing, repairs, insurance and MOT
Flat rate deductions are 24p per mile for a motorcycle. For other vehicles they're 45p per mile for the first 833 miles then 25p a mile after that.
If you use your home for business purposes
You have to deduct expenses for use of your home using flat rate deductions. The amount of the deduction depends on the number of hours you spent working at home during the assessment period.
| Hours spent working at home during the assessment period | Flat rate deduction |
|---|---|
| Between 25 and 49 hours | £10 |
| Between 50 and 99 hours | £18 |
| More than 100 hours | £26 |
Reporting your earnings
Report your earnings through your online journal.
If you've done paid work for an employer, you should report this income too.
If you need help or support reporting your earnings, call the Universal Credit helpline.
Universal Credit helpline
Telephone: 0800 328 5644
Telephone (Welsh language): 0800 328 1744
Textphone: 0800 328 1344
Relay UK - if you can't hear or speak on the phone, you can type what you want to say: 18001 then 0800 328 5644
You can use Relay UK with an app or a textphone. There’s no extra charge to use it. Find out how to use Relay UK on the Relay UK website.
Video relay - if you use British Sign Language (BSL).
You can find out how to use video relay on YouTube.
Monday to Friday, 8am to 6pm
Calls are free from mobiles and landlines.
If you don’t make a profit in a month
You should still report your income and what you’ve spent on your business through your online journal.
If you’ve made a loss, this will be taken off your profit the next time you make a profit. This means you might get more Universal Credit in future.
Example
Alessia is self-employed and gets Universal Credit.
In January, Alessia reports that she made a loss of £500. In February, she reports that she made a profit of £800.
The loss from January is taken off the profit from February. £800 minus £500 is £300.
Alessia’s Universal Credit payment for February is calculated as if she made a profit of £300.
What happens next
The DWP will check your earnings amount and whether the minimum income floor applies to you. Then they'll work out how much Universal Credit you should get paid for the assessment period. The DWP aim to pay you within 7 days of the last day of your assessment period.