Can you start a business on Universal Credit? Yes you can, and this blog post, written by a former Universal Credit Enhanced, DWP work coach and trainer for Digiteachonline.com will inform you of the exact process and the key factors. you need to be aware of, if you are considering or have started a business on Universal Credit.
What is Universal Credit?
Universal Credit is a stated benefit issued by the Department of Work and Pensions on behalf of the UK government. Working and non-working people can be in receipt of Universal Credit, disabled and nondisabled. In short, Universal Credit is an extra level of financial government support to help those on low incomes.
What sort of Business can you start?
As long as your business is registered in the Uk and you live in the UK, you can start any business when in receipt of Univeral Credit.
When you have decided you want to start a business you contact your workcoach as set out below.
When do you need to inform DWP?
Your business does not have to be making money or profit before you inform DWP that you want to start a business, nor do you have to be at the actual selling stage. You could for example be in the early stages of planning a business and there may even be some support or available grants from DWP to help you start your business. You inform DWP that you want to start a business by writing a message in your journal.Once you have spoken with your workcoach and you have decided to start your business, you will need to make a change of circumstances from unemployed to self-employed in your online Universal Credit account.
The Self-employment Interview
Once you have declared yourself self-employed with Universal Credit you will be invited in for a one hour appointment Interview, this is called the Gateway appointment.
Before you attend this appointment, check you have taken all the required documents that will be requested in a letter in your journal. This is often seen as a blue hyperlink, and the form is a UCD_5, not obvious to spot, but this letter will list all the documents you need to take to this Gateway appointment.
If you attend the Interview appointment with little or no documents requested from the list, the work coach can determine that you are not ready for self-employment and give you the status of non-gainfully self employed.
What is Gainfully and non-Gainfully self-employed?
At your Gateway appointment your workcoach will be assessing your self-employment status through your business idea.
If you are found non-gainfully self-employed you can still do self-employment but you will also be required to look for work and be placed in a work group that requires you to either look for work or be involved in work-related activity.
If you are found to be gainfully self-employed, you will not have to look for work, you will be supported by DWP to grow your self-employment above the minimum income floor, set by your work coach in this Gateway Interview appointment and you may even be given a Start up Period of 12 months, which will mean the minimum Income floor will not be applied to your Universal credit claim for a period of 12 months.
Universal Credit claimants in receipt of LCWRA cannot be found gainfully or non gainfully self-employed. They can still be self-employed but they will not have the minimum income floor applied to them nor given a start-up period.
