The short answer
- Reselling as a business is self-employment, and Universal Credit needs to know about it.
- At the end of every monthly assessment period you report what came in and went out, even if it was nothing.
- Once you're treated as gainfully self-employed, a minimum income floor can apply, but usually not in your first 12 months.
Reselling counts as self-employment
Buying things to sell on at a profit is trading, the same test HMRC uses for tax (see do you have to pay tax on selling online). Universal Credit's rules for self-employed people cover it, and starting a business is a change you should tell them about. If you're only clearing out your own things and aren't sure whether it counts, ask your work coach rather than guessing.
The monthly report
At the end of each monthly assessment period you report, through your Universal Credit account:
- How much you earned, even if it was nothing.
- The total your business received.
- What you paid out in business expenses.
- Any tax and National Insurance you paid.
- Any pension contributions.
This is money in and out during that month, not profit for the tax year. Payouts from Vinted or eBay count when you receive them, and stock counts when you pay for it.
Being "gainfully self-employed"
Universal Credit treats you as gainfully self-employed if you can show that:
- self-employment is your main work,
- you get regular work from it,
- the work is organised, and
- you expect to make a profit.
You'll be asked to show this, often at a meeting with your work coach, so organised records help.
The minimum income floor
Once you're gainfully self-employed, your Universal Credit can be worked out using an assumed level of earnings instead of what you actually made. That's the minimum income floor, based on what an employed person on minimum wage in a similar situation would earn. If you earn more than it, your real earnings are used. If you earn less, the floor is used, which means your payment can drop even in a quiet month.
The 12-month start-up period
If you're newly self-employed, you may get a start-up period of up to 12 months. During it the minimum income floor doesn't apply and your actual monthly earnings are used, while you take steps to grow the business. You normally only get one. A new one is only possible after 5 years, and only for a completely different kind of business.
Where STC fits in
The monthly report is easier if your sales and costs are already written down. STC's Tax screen can show any date range, so set it to your assessment period to see what came in and what you spent, and export it as a CSV if your work coach wants evidence.