esa + ungainful self employment + p&l a/cs

If you are self employed, you must register as doing permitted work.
Not doing so in principle may lead to everything from your ESA being stopped to prosecution for benefit fraud.

The rules as to what information is required to confirm that what you are doing is permitted work are unfortunately vague.
Just comply with whatever they ask.

My understanding.
From a HB perspective - as long as you're getting income-related ESA - you are entitled to full HB.
Permitted work has no impact on HB.

As above, there are few regulations as to when the decisionmaker must collect information.

I linked to all relevant information I have found in http://forums.moneysavingexpert.com/showpost.php?p=64173298&postcount=2 - I would welcome more.
It is depressing how little information there is on permitted work past the two or three page booklet they offer.

sh1981 wrote: »

Yes roger but the thing that I'm trying to say is that I'm not working. Therefore I'm making a loss. There is NO BUSINESS ACTIVITY.

In such a scenario my P&L would show a loss, or since a few months no profit / no loss.

I did send PW1 they said they cant accept it until I get paid work.

All I wanted to know was do I need to send them these P&L A/cs that are showing loss.

Making a loss does not mean there is no business activity.

My understanding is that loss-making businesses (and how a loss is defined is complex, because ESA income rules mean that there are different disregards, and some legitimate business expenses may not count) may still count as permitted work, if the DM chooses for them to do so.

Unfortunately, all I've found indicates that absolutely the only way to get 100% clarification on this that can't be backed out of later by them is to get a written decision that what you are doing is allowed, and under what circumstances you need to formally start permitted work.

Not being in the permitted work framework makes you much less protected.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/252040/dmg-vol8-consolidated-version.pdf

41186 - this says that 'exempt work' - of which permitted work is a sort - does not count as work under the general rule.

41122 - the general rule - you're not entitled to ESA in any week in which you work.

'Work is any work which a claimant does, whether or not it is undertaken in expectation of payment'.

41147 - on when work done for a business can be negligible.
'The question of negligible work can arise in self employment when a sick person can still attend to some aspects of the business. Work cannot be considered negligible if it contributes materially to the running of the business, or involves a significant amount of supervisory or administrative work. For example, if the person occasionally does small jobs, such as signing cheques, the contribution to the business can be disregarded as negligible'.

There is a second exclusion - the remunerative work exclusion.

41274 'Remunerative does not mean profitable'.

Doing any work - other than truly negligible work - even if not for profit, outside the protection of the permitted work scheme without some concrete proof in writing that you had the OK for this work risks them coming back at a later date, and deciding that the work you were doing was either work under the general rule, or remunerative work, and that you were not entitled to ESA for the period you were claiming.

(remunerative work does not affect conts-based ESA, though the general rule does).

Read also 41327 and on - the definition of what remunerative work is for the claimants partner - this is referred to in 41275 as should be looked at as well for claimants where they are not in work, but may be in remunerative work.
Specifically for example 41330 - 'over 24 hours a week is remunerative work nomatter the profit or loss'.



If you have simply been advised by a front-line telephone operator that you are not required to send in a PWK form - and you have nothing in writing, I would recommend trying to get something, for the reasons outlined above.
If you've got it down in writing that they can't accept the PWK1 until you make any profit - your position is much stronger.

This is entirely at the whim of the DWP though - they are treating you more generously than a strict interpretation of the law allows.
They can change their interpretation at any time.


I would be _overjoyed_ to find a nice simple document explaining the DWPs general position with self employed earners and PWK.
I don't however believe there is one.
My understanding is that this is entirely up to individual decisionmakers.

There is certainly no public information on how often you must supply statements to them.

sh1981 wrote: »

Roger, thanks for the copious reply. I do appreciate it, but however I'll say again, when I say NO BUSINESS ACTIVITY, it means exactly that.

This means there is no loss, and there is no profit. This means I'm doing absolutely nothing or even striving to make an effort.

HMRC is irrelevant.
Other than you probably need to at some point either withdraw from self-assessment, or complete a return.

If you're actually doing nothing, and getting no income, then ESA are correct - whether you call yourself self employed or not, if you've told HMRC you're self employed or not doesn't matter.

You're not doing work, remunerative work, or even exempt work of any sort.