The change from tax credits to universal credit.

[ringi]

A good way of losing elections too Id have thought

Nearly all self employed people will get an easier life from the new rules. Views of farmers don't change election results.

 

[Goweresque]

Lots in those positions whatever you make of it.
As long as you qualify you QUALIFY.

But thats the point. Farmers are no longer qualifying for the benefits, or if they do qualify don't get very much, because their businesses don't earn them as much as MW.

But land that you could let and is not generating a profit higher then it could be let for is hard to justify as being a business.

That may be the case, but thats not the rules of the system. Business assets don't count. Neither do housing assets. But cash and investments do. So farmer Giles can own a farm worth millions but still claim UC, and his paid employee could own a house worth hundreds of thousands (that he inherited say) and still claim UC, but Bill Smith who lives in a rental flat and he and his wife have managed to save £16k over the years can't claim a penny.

 

[farmerm]

No it isn't, not in the eyes of the benefits system. There's the minimum wage floor. That is to say as the minimum you can earn from paid employment is MW, they assume that your business should be capable of generating at least MW profits, and won't pay you anything if your earnings are less than that. This is to prevent people having 'hobby' businesses that they hardly work at, and earn b*gger all, and the owners then claim benefits to make up their incomes (this is what Big Issue sellers were doing - claiming to be self employed 'traders') Because of the rise in MW over the last few inflationary years (25%+ rise) and farming's perennially low profitability farmers are now reaching a point where their earnings are less than MW and thus can't claim benefits.

And to be frank I think its right. If you want to work 60 hours a week and end up with £15-20k of profits at the end of the year thats your decision. You could work 37.5 hours a week as a paid employee and earn £22k. There's no reason the taxpayer should pay for your lifestyle choice.

What about those who work 60 hours a week to end up with £15K profit only because weather, pests and markets fk over what can be a profitable enterprise in other years?

 

[farmerm]

It also presents cash payments in the building trade being used to illegally claim benefits in addation to advoiding tax.




The issue with farming is the benefit system assumes each month is fully independent when clearly with farming it needs to be averaged over the year.

It needs to be averaged over multiple years!

 

[ringi]

paid employee could own a house worth hundreds of thousands (that he inherited say) and still claim UC, but Bill Smith who lives in a rental flat and he and his wife have managed to save £16k over the years can't claim a penny

And the person who owns the house will get no help with a mortgage etc or maintenance costs yet the person who rents will often get paid lots of housing benefits. (Once savings spend on holiday etc.)

 

[ringi]

It needs to be averaged over multiple years!

What about those who work 60 hours a week to end up with £15K profit only because weather, pests and markets fk over what can be a profitable enterprise in other years?

A good accountant can even out year to year profits in a limited company, so allowing consistent director wages and dividends to be paid. But that can result in having to pay corporation tax in years without a true profit.

 

[Still Farming]

But thats the point. Farmers are no longer qualifying for the benefits, or if they do qualify don't get very much, because their businesses don't earn them as much as MW.


That may be the case, but thats not the rules of the system. Business assets don't count. Neither do housing assets. But cash and investments do. So farmer Giles can own a farm worth millions but still claim UC, and his paid employee could own a house worth hundreds of thousands (that he inherited say) and still claim UC, but Bill Smith who lives in a rental flat and he and his wife have managed to save £16k over the years can't claim a penny.

Lots of different scenarios possibly.
As rules state it's on Assumptions.
The way Losses are treated etc.
Everyone would like to make profits but if not that's it.

 

[Goweresque]

And the person who owns the house will get no help with a mortgage etc or maintenance costs yet the person who rents will often get paid lots of housing benefits. (Once savings spend on holiday etc.)

No, UC can include contributions towards mortgage costs:

Housing costs and Universal Credit

Universal Credit can include help with housing costs - paying your landlord, what to do if you cannot pay your rent, other help you can get.

www.understandinguniversalcredit.gov.uk

 

[ringi]

No, UC can include contributions towards mortgage costs:

Housing costs and Universal Credit

Universal Credit can include help with housing costs - paying your landlord, what to do if you cannot pay your rent, other help you can get.

www.understandinguniversalcredit.gov.uk

"Help with mortgage payments or loans is provided as a loan. You will only be asked to pay back this loan if the property it was claimed for is sold or transferred to someone else." So is really only helpful for people who will be on benefits for life due to a new disability etc or who are out of work for a short time.

It also does not cover maintenance.

-----
Sometimes ago I looked at this for a disabled friend as he was getting problems from being forced to live in a socal housing area. One option was for me to buy a property and rent it to him as his housings benfits would cover rent - the rules sometime allow higher rents for wheelchair accessible properties. In the end the housing association decided that relocating him was an easy option then having to explain why they did not evict all their tenants with criminally misbehaving teenagers.

 

[farmerm]

But thats the point. Farmers are no longer qualifying for the benefits, or if they do qualify don't get very much, because their businesses don't earn them as much as MW.


That may be the case, but thats not the rules of the system. Business assets don't count. Neither do housing assets. But cash and investments do. So farmer Giles can own a farm worth millions but still claim UC, and his paid employee could own a house worth hundreds of thousands (that he inherited say) and still claim UC, but Bill Smith who lives in a rental flat and he and his wife have managed to save £16k over the years can't claim a penny.

Even more unfair on Bill and his wife is someone in the exact same position as them but who has pee'd their earnings up the wall gets rewarded for not saving, that is some proper bulls**t. I find it odd that investing in a business is not an investment! Surely Bill and and wife only need to start a "business" selling pens on ebay or something, put their savings in a "business" account and then by magic they become eligible for UC? Just means they have to do a self assessment return.

 

[Still Farming]

Business property,machinery etc etc does not need to be reported.

 

[ringi]

Even more unfair on Bill and his wife is someone in the exact same position as them but who has pee'd their earnings up the wall gets rewarded for not saving, that is some proper bulls**t. I find it odd that investing in a business is not an investment! Surely Bill and and wife only need to start a "business" selling pens on ebay or something, put their savings in a "business" account and then by magic they become eligible for UC? Just means they have to do a self assessment return.

Not that simple as cash in a "business" account can be counted along with anything else that is done to primarily to get below the limits.

 

[Goweresque]

Surely Bill and and wife only need to start a "business" selling pens on ebay or something, put their savings in a "business" account and then by magic they become eligible for UC? Just means they have to do a self assessment return.

No, because their 'business' would be assessed as having earned them minimum wage, even if it actually only earned a few quid a month. So they'd get very little UC, if any. The system is set up precisely to stop that sort of shenanigans.

Even more unfair on Bill and his wife is someone in the exact same position as them but who has pee'd their earnings up the wall gets rewarded for not saving, that is some proper bulls**t.

This is the fundamental problem with means tested benefits. You incentivise people to spend all their income and not to save. But equally if you don't means test you end up giving money to people who don't need it, and less to those who do. Its a very hard circle to square, indeed there really is no answer to it.

 

[farmerm]

No, because their 'business' would be assessed as having earned them minimum wage, even if it actually only earned a few quid a month. So they'd get very little UC, if any. The system is set up precisely to stop that sort of shenanigans.

I suppose the partners capital introduced into the "business" in year 1 might be assessed that way but what about in year 2? No additional capital introduced and its only earning a few quid a month how could it be assessed as "having earned the minimum wage" in year two and onwards? Just punching some rough numbers into the online calculator based on fairly dire 2022-2023 tax return figures, we could claim a surprisingly large chunk of UC, but only if we had pee'd though our savings

 

[Spartacus]

I'm on universal credit, it's a ball ache having to do the accounts monthly, they do take into account the bad months when you have a good month (I can have months in minus figures then one or two with thousands in). If there was an option that I could do it annually it would make far more sense.

 

[Still Farming]

I'm on universal credit, it's a ball ache having to do the accounts monthly, they do take into account the bad months when you have a good month (I can have months in minus figures then one or two with thousands in). If there was an option that I could do it annually it would make far more sense.

Keeps the civil servants in work ??

 

[Spartacus]

Keeps the civil servants in work ??

Supposedly to make sure the bad years aren't after a good one so when you need the payments you don't get enough, but yes, there are plenty on that gravy train!

 

[nelly55]

Just to play devils avacate,why should farming get any payouts SFI or this new system.It is easy for those in glass towers to criticise those who work in the industry for low income.So if farmers cannot have UC or pension credit because you don’t earn MW then why should other business employers only pay MW and leave the tax payer to top up employee wage.

 

[muleman]

Just to play devils avacate,why should farming get any payouts SFI or this new system.It is easy for those in glass towers to criticise those who work in the industry for low income.So if farmers cannot have UC or pension credit because you don’t earn MW then why should other business employers only pay MW and leave the tax payer to top up employee wage.

We aren't on minimum wage now, not by a long way, and aren't being topped up, feels like we're very undervalued.

 

[.David]

I'm on universal credit, it's a ball ache having to do the accounts monthly, they do take into account the bad months when you have a good month (I can have months in minus figures then one or two with thousands in). If there was an option that I could do it annually it would make far more sense.

I'm on universal credit, it's a ball ache having to do the accounts monthly, they do take into account the bad months when you have a good month (I can have months in minus figures then one or two with thousands in). If there was an option that I could do it annually it would make far more sense.

Hi, can i ask, are you on your first year of UC? I thought you could only enter losses in the first year. Cheers