The new Universal credits (UC) will affect millions of people, with the self-employed and sole business owners being particularly hard hit. Not only will they be deemed to earn the minimum income floor, meaning they may qualify for less of this new benefit compared with existing tax credits – they will also be given the extra administrative burden of monthly cash accounting.

This new blow to artists’ livelihoods comes at a time when self-employed artists are already struggling due public sector cuts, which have led to a reduction in fee levels and openly-advertised paid work.

Speaking anonymously, one mid-career artist with a track record for securing public art and exhibition commissions commented: “I am sick of being asked to loan work or work for free just because someone claims they’ve got no budget.”

A guide to Universal Credits, written especially for a-n members by Darren Moynan of Dodd and Co, explains that under UC, the self-employed will be deemed to be “gainfully self-employed”, and therefore earning at least the national minimum wage for 35 hours per week. He points out: “Even if a self-employed person incurs a loss in a [monthly] assessment period, they will still be deemed to earn £873. Furthermore, any loss incurred cannot be carried forward to offset against income of future assessment periods.”

This will have a huge impact on artists with varying income from one month to the next as there will be no provision for averaging. If they have a profitable month, their actual earnings will need to be declared. However, if their profit for a month is less than £873, they will still be deemed to earn that much for UC purposes.

Phasing in Universal credits means that new applicants from now on are automatically assessed against the new criteria. Existing claimants move to the new rules if there is a significant change in their circumstances. Full implementation will be completed by April 2015.

Commenting on the issue of monthly ‘real time’ reporting, another artist, who didn’t wish to be named, said: “I find it bad enough working out my accounts once a year, to have to do it every month will probably stop me claiming, which will make it difficult to survive financially as an artist at all.”

a-n Director Susan Jones said: “We commissioned this guide because we could see that artists on low incomes with families would be badly affected. But we didn’t realise that they could end up with as little as a fifth of the amount they have been getting in the past, when claims were based on annual earnings.”

More on

A guide to Universal Credits is one of a-n’s portfolio of specialist practical guides for artists and creative freelancers. Others include:

How to claim tax credits

Licencing reproductions

Agreeing a contract

Becoming self-employed

Setting up an organisation