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The self-employed for universal credit

The scope of the self-employed rules for universal credit are wider than the income tax definition of self-employment. They cover contractors, sub-contractors, gig-economy workers, company directors and anyone ‘working for themselves’ (ie sole traders and partners).

A work status of ‘self-employed’ needs to be reported to DWP as part of the claims process so that the benefit can be correctly calculated. Foster carers do not need to register as self-employed for universal credit, but may need to register as self-employed with HMRC, even where income is covered by qualifying care relief (see Simon’s Taxes E1.701).

The self-employed and company directors can claim universal credit, but are subject to additional rules.

In overview, these cover:

1. •

   companies analogous to a partnership or one-person business

2. •

   being gainfully employed

3. •

   start-up periods

4. •

   minimum income floor

5. •

   surplus income

6. •

   record-keeping and reporting of income and expenses

See