Limited Company While Receiving LCWRA – Will It Affect My Universal Credit?

fifa_world_class7

Hi everyone,

I’m currently receiving Universal Credit and have been assessed as having Limited Capability for Work and Work-Related Activity (LCWRA).

I'm planning to set up my own limited company (LTD) through Companies House to start working for myself, possibly at my own pace. I'm wondering:

Will setting up a LTD company affect my Universal Credit payments, especially my LCWRA element?

I’m not sure how UC treats people who start a business but still have LCWRA. Would they expect me to meet work requirements or assume I’m fit to work just because I registered a company—even if I’m not earning anything yet?

I’d really appreciate hearing from anyone with experience or advice.

Thanks so much!

Rosie_Scope

Hi @fifa_world_class7, it's unlikely that they'd find you fit for work just because you registered a company, especially if you aren't trading in any way yet. But they may wish to know more about what you're planning to do.

You can still work while in the LCWRA group, but one thing worth considering is whether the work you'll be doing contradicts the reasons you're claiming LCWRA. That can sometimes cause issues should they review your claim in the future.

If you're not already registered as self employed with Universal Credit, you will need to tell them once you are. They may contact you to talk about your business and what you'll be doing.

Once you're self employed, they'll likely ask you to record your income each month, even if it is zero. As you're in the LCWRA group, you won't be subject to the 'minimum income floor', so you won't be expected to earn any specific amount. You'll also have the work allowance, so you can earn up to a specific amount before your payments begin to be reduced.

There's some information here on reporting your income and keeping business records in case that's useful to you 😊:

Report business income and expenses to Universal Credit if you are self-employed - GOV.UK

fifa_world_class7

Hi,

Thanks so much for the helpful advice and support here , it really means a lot.

Just to share a quick update on my situation for anyone in a similar boat:

I'm currently receiving LCWRA (Limited Capability for Work and Work-Related Activity) through Universal Credit due to my deafness and disability, and I’ve recently set up my own limited company e.g. Property Investment LTD.

I checked carefully, and I’ve confirmed that:

-It is completely legal to run or start a business while receiving LCWRA,
- Simply registering a company (before trading or earning anything) does not affect my UC claim,
- Because I’m in the LCWRA group, I’m protected from the Minimum Income Floor, and
- I can earn money through my company without losing LCWRA — as long as I report income honestly and stay within the limits of my health and condition.

Since I’m deaf, I rely on BSL interpreters and accessible communication tools to manage any meetings or business discussions. This is an essential adjustment that makes things possible for me — but it doesn’t mean I’m suddenly “fit for work.” I still face real communication barriers and need support, which aligns with the reasons I’m receiving LCWRA in the first place.

I’ll only notify Universal Credit when the company begins trading or generating income, and I’ll keep clear records and report any earnings monthly through my journal when that time comes.

I hope this helps reassure others who are disabled and thinking about starting something for themselves. With the right support and transparency, it’s absolutely doable.

Thanks again to everyone who replied — you helped give me the confidence to take this step!