Declaring Expenses and Income

Navigating Universal Credit (UC) can be a complex process, especially when it comes to declaring your income and expenses. Whether you’re a carer, a student, or someone balancing multiple sources of income, it’s crucial to understand what needs to be reported and what doesn’t. Here are some key questions about declaring Carer’s Allowance and Student Loan Company (SLC) disbursements to Universal Credit.

To ensure your records are categorized correctly for Universal Credit and tax purposes, follow these steps based on your situation:

1. Universal Credit Considerations
💡 Key Rule: Universal Credit assesses income based on what is actually received in your account, not just what is earned. However, moving money between accounts does not count as new income.
How to Categorize Transfers for Universal Credit:
If you transfer money between your own accounts (e.g., personal → business or business → personal), this is NOT income and should be recorded as a “Funds Transfer” or similar note.
If you withdraw money from your business for personal use, it may be seen as income if you’re self-employed, so label it carefully (see below).
Keep clear records to show that it was already declared previously (such as invoices, previous bank statements, or tax filings).
💡 Tip: If Universal Credit asks about an unexplained deposit, you can clarify that it was a transfer of previously declared income.

2. Tax & Self-Assessment Considerations
💡 Key Rule: HMRC only cares about income once; if the money was already declared in a previous tax period, transferring it doesn’t make it taxable again.
How to Categorize in Bookkeeping for Tax Purposes:
Personal to Business Transfer → “Owner’s Capital” (if funding your business)
Business to Personal Transfer → “Owner’s Draw” (if taking money from business for personal use)
Bank to Bank Transfer → “Inter-Account Transfer” (if moving money between two of your own accounts)
Savings to Current Account → “Personal Transfer” (not income, just moving funds)
💡 Important: If you’re self-employed, money you take from your business is not salary—it’s personal drawings, so you don’t report it as “income” for tax again.

3. Keeping Clear Records
To avoid confusion:
✅ Always attach notes to transactions in your bookkeeping software (e.g., “Funds Transfer – Previously Declared”).
✅ Keep a simple spreadsheet listing amounts, dates, and reasons for transfers.
✅ If Universal Credit or HMRC question it, show proof that this money was already accounted for.

Do You Need to Declare Carer’s Allowance?

If you are in receipt of Carer’s Allowance, you might wonder whether you need to tell Universal Credit about this income. The answer is yes, you must declare Carer’s Allowance to Universal Credit. However, there’s a catch: Universal Credit may already be aware that you receive Carer’s Allowance because it is often automatically linked to your UC claim when you apply for it.

If Universal Credit is aware of your Carer’s Allowance, they should include it in your assessment without you needing to report it. However, if you started receiving it after your Universal Credit claim was established, or if there was any change in the amount you’re receiving, it’s always a good idea to double-check that your UC account is updated. Failure to do so could result in an overpayment, which you will eventually need to repay.

Reporting SLC Disbursements as a Student

If you are a student receiving disbursements from the Student Loan Company (SLC), you may be wondering whether these payments count as income for Universal Credit purposes. The good news is that Student Loan disbursements are typically not treated as income for UC purposes. (However, you should check because I have evidence of the contrary).

This is because SLC payments are generally considered loans and not income. As a result, they usually do not affect your eligibility for Universal Credit or impact the amount you receive. However, there is a distinction between the loan amounts and the living costs part of your loan.

If the disbursements are intended for things like tuition fees, they are not treated as income and do not need to be declared. On the other hand, any money received for living costs might need to be declared as income, depending on your individual circumstances.

It’s important to note that the rules around student loans and Universal Credit can be quite specific and subject to change. If in doubt, it’s always a good idea to contact your Universal Credit advisor for clarification.

What Happens If You Don’t Declare Income Correctly?

It’s essential to be transparent about your income and any changes to your financial situation when claiming Universal Credit. Failure to declare income, including Carer’s Allowance or student loan disbursements, can result in sanctions, overpayments, or even fraud investigations. Always ensure that any new income or changes to existing income, such as Carer’s Allowance, is accurately reported, and keep track of any payments made to you.

If you’re unsure about whether a particular income source needs to be declared, it’s better to report it and let Universal Credit determine how it affects your claim. This can help you avoid any complications down the road.

Do You Need to Declare Carer’s Allowance?

If you are in receipt of Carer’s Allowance, you must declare it to Universal Credit. In most cases, Universal Credit should already know you are receiving Carer’s Allowance if it is automatically linked to your claim. However, if you were awarded Carer’s Allowance after you made your Universal Credit claim, or if the amount you’re receiving has changed, you will need to update Universal Credit with this information.

If Universal Credit is already aware of your Carer’s Allowance, you generally don’t need to report it again. But if there’s any doubt—like a change in the amount or new receipt of the allowance—it’s always best to double-check and report the change to avoid any potential issues, such as overpayments.

Conclusion

In conclusion, when it comes to Universal Credit and reporting your income, being proactive and accurate is key. Be mindful and double-check if you have to report Carer’s Allowance if Universal Credit is already aware of it, and SLC disbursements are generally not treated as income, but living costs from student loans might need to be declared. By staying informed and making sure all your financial details are reported correctly, you can help ensure that your Universal Credit claim is processed smoothly and accurately.

If you have any questions drop a message in your Universal Credit Journal and wait for them to respond.