Universal credit is being used as a hit on the self-employed

There are three main tests of employment to determine whether a contractor is a disguised employee and not genuinely in business on their own account. These are:

Control: if a contractor is told by their client where, when and how to complete the tasks allocated on their contract, they have passed the control test.

Substitution: if a contractor cannot send a replacement, or a substitute, to complete the tasks for the client on their behalf, they have passed the substitution test.

Mutuality of obligation (MOO): if a contractor expects the client to give them work, and the client expects the contractor to complete it, they have passed the MOO test.

One mum described how after the move to Universal Credit she can no longer plan the household budget. The reason is because of the way UC has been implemented. If her partner has good earnings in one month, their universal credit is reviewed and the award reduced for the following month. If in that month her partner had a low income, then any rebalancing won’t take place for another month.

Bernadette Meaden wrote:Anecdotes abound. For instance, if a claimant mentioned they enjoyed baking, they would be encouraged to 'go self-employed' and set up a cupcake business. In 2013, the BBC reported this phenomenon, looking at six Work Programme providers. It found clients of all six providers who said that they were "encouraged to either pretend to be working for themselves or to set up businesses they did not consider viable."

Single mother Joanna was encouraged by her Work Programme provider to set up a gardening business. She would need to work sixteen hours a week to claim tax credits, but, "It was suggested to me that in the winter – when I have a down season and I would probably have no hours work a week – that I could invent the whole 16 hours a week, which I think is totally unacceptable."