Universal Credit
Work and Pensions
Stephen Timms (East Ham, Labour)
To ask the Secretary of State for Work and Pensions what his policy is on the treatment of outgoings incurred in the course of self-employment in the calculation of universal credit.
Mark Hoban (Fareham, Conservative)
The income taken as the claimant's earnings from self-employment for the purposes of the universal credit award calculation would be the balance of cash in minus cash out.
The items that can be deducted as “cash out” are business expenses which have been incurred wholly and exclusively for the purposes of the self-employed activity. Guidance will outline what items are considered as “cash out”, for example:
regular business costs (e.g. rent, wages, operating leases);
stock purchased for business;
expenses (e.g. electricity, phone, business travel);
allowable one-off costs (e.g. capital expenditure, finance leases);
income tax payments;
national insurance contributions; and,
personal pension contributions.