Job Seekers to Sole Trader

kinesse · 10 May 2012 at 6:50PM

Hello all.

My question is, can I gradually work my way off Job Seekers Allowance by starting and running a sole trader type small business, if so does anyone have any guidelines that would be useful to me? Any advice would be great. I have been off work for 10 years due to ill health. I have had an operation on my spine and now I feel like working again, the problem is I am no use to an employer because I am not reliable enough, running a small business would allow me to work around the bad days and be more flexible regarding as and when I would except business from clients. My idea and skill will operate as a mobile service sector business to the domestic market in my local area.

All the very best.

Sean.

PlutoinCapricorn · 10 May 2012 at 7:21PM

This is a very topical issue. There is a lot to learn about being a sole trader in general, and even more if you are planning to claim benefits in addition to being self employed.

There is a trend for people to get away from JSA and the requirements to be continually engaged in job search activities by declaring themselves self employed and claiming Working Tax Credits to bring their income up. The problem is, when they do this just to avoid the pressure to find work, they then need to get enough paid work to satisfy HMRC/DWP and to prove that they are not just living off benefits.

https://www.businesslink.gov.uk is the starting point for anyone who is thinking about being self employed.

paulwf · 10 May 2012 at 8:35PM

I fully understand what you want to do and why you're doing it but my concern is what will actually be required to make your business work. Simply put I've never worked so hard in my life since I've been self employed. Not by a long shot. You have to work and work and work and even if you feel sick or all the work makes you sick you have to work some more.

Firstly there isn't a safety net when you're self employed, no sick pay, holiday pay or guaranteed minimum wage. Secondly a business has to always put the customer first, you can't pick and choose which days you can work, you have to fit around the customer and never let them down no mater how ill you are feeling. Even if you have staff be prepared for them to let you down on occasion.

PlutoinCapricorn · 11 May 2012 at 7:47AM

A lot depends on what you actually do. I increased productivity and efficiency and reduced stress by becoming a home based sole trader, but I work online. I also had a lot of contacts so got work via personal recommendation.

kinesse · 11 May 2012 at 8:05PM

Thank you every one, but I don't see any useful info here only the obvious run of the mill advice thats been looked into already. Imagine you have an illness that makes you pretty useless to an employer unyet you have a talent and skill to be a potential help to just about every household in the country. I don't want to tell the whole world what I have in mind save to say it's in the market of Computing a massive market as we all know. The only draw back I have is a little startup capital which I soon hope to have. I understand we can gradually work our way off JSA which I would have thought would be encouraged by government especially when it could well lead to job creation for the whole country. I know people with severe disability far worse than me who have made a good expanding business in the same field. Here is a video of one such person who I admire very, sorry I cant post a direct link here but paste this Interview with Computer Repair Inspiration Kevin Berg

into a site called technibble and you will start to understand what I am getting at, thanks.

I have worked as a Miner, Car Technician, PC Engineer, Factory worker and Warehouse Operative and other jobs many and varied now at age 45 my body is all worked out I now have Spondilitis, Artheritis and Diabetes. Unfortunately I am not ill enough to recieve disability benefit so I have no option but to claim JSA, dont get me wrong I am glad I can still walk and talk but I am caught in limbo land it seems. I went back to college in 2005 and got 4 distinctions in computer repair, service and installation, so now I feel as if I am trapped by huge reels of red tape. If the government are interested in getting more jobs of the ground surely they could help a man start up a business by replacing his benefits by starting a small business and hopefully creating a few jobs if demand came along which of course it will with advertising. I have already tried to start up once but as I was on the wrong benefit the fraud squad came knocking on my door even after the Works and Pensions Department advised me to test the business for a while. I was told I could start a business but as and when profit is made I would have to declare it and that would gradually take the place of my Income based Jobseeker Allowance all I am looking for is advice on that small subject, does any one have experience in this, has anyone done this?

Cheers every one.

Sean.

Horace · 12 May 2012 at 10:51AM

Sean you can get Access to Work to help any potential employer make reasonable adjustments so that you can become an employee. Just because you have a disability doesnt mean that you cannot work.

I actually started my business after being made redundant in 2007 and spending some time on the dole - I managed to get myself onto a New Deal for Self Employment Programme and came off the dole in 2009. I was one of the last people to do this particular New Deal Programme as I understand that it has now changed considerably since then and now goes under a different name. As I understand it people only get 6 weeks on the course as opposed to the 8 months that I had.

You would have to register your self employment with the HMRC and arrange to pay Class 2 NI - although you can apply for an excemption. You would then submit a self assessment tax return every year and pay tax on your profits.

I have hidden disabilities and at the moment I am claiming JSA and looking for work, using Remploy to help me as I think that my disabilities are holding me back judging by the number of knockbacks I have had.

I was and suppose I still am self employed, however, my self employment has had to go on the back burner whilst I find a job that pays a wage so that at least I have regular money coming in. I was told by the HMRC to claim JSA because I had to be working more than 30hrs a week to get Working Tax Credits (last year to the tune of £51 a week with no disability element as I am not considered disabled enough to claim DLA). If I get any money from self employment then I have to notify the jobcentre - unfortunately for me I haven't worked as nobody is spending money on entertainment or events at the moment.

You can also get Access to Work when you are self employed and the whole cost is met by the government. However, whilst self employment can be good you need to remember that there are drawbacks e.g. no holiday pay, no sick pay, working longer hours - typically 60-80hrs a week, you often work for less than the minimum wage too certainly when starting off. You have to factor in the cost of insurance because dependent on what you plan to do you would need public liability and professional indemnity. You also have to consider the costs of marketing your business and this can be quite expensive as you go networking to meet other businesses who may buy your services etc.

I must admit that I am currently finding Remploy to be very useful, they assist me with my job search and I shall be attending a workshop prior to a 2 week work trial with M&S in a few weeks. Remploy has links with lots of companies who are disability friendly. I have also registered on the Evenbreak website (https://www.evenbreak.co.uk) which was set up by a disabled person to help other disabled people find work.

I am not trying to put you off self employment but I am trying to be realistic by showing the pitfalls.

paulwf · 12 May 2012 at 9:09PM

OP understandably you don't want to give too much away at this stage but it sounds like you will be setting up in the field of mobile computer repair or something similar. If that's correct please do a search of this forum, every man and his dog seems to be doing the same and from previous threads it appears to be a very hard way of making money.

It sounds like you'll be dealing with customers, and at the risk of repeating myself you have to fit around the schedule of the customer not yours. It doesn't matter what is right, fair or admirable, most customers won't care about that sadly.

kinesse · 14 May 2012 at 12:32AM

Thanks every one. Some one said once life is like a bucket of Crabs. One Crab said to the others lets get out of hear the others said don't be silly it's safe in here and look it's getting nice and warm. But the 1st Crab got out of the bucket despite all the others trying to persuade him that it was best to stay in the bucket. Later that day there was a nice meal of Crab served at the Hotel.

All the best Sean.

Horace · 14 May 2012 at 12:09PM

Why not approach the jobcentre and ask for their help to set up a business? They do have other schemes since the New Deal programme ended.

You could also approach the Disabled Entrepreneurs (sorry unsure of the web address) as they can give some practical advice.

Personally, I would look for paid employment and then set up the business on the side and see how you get on.

Victoriajayne · 16 May 2012 at 10:08PM

Sean, you have a couple of options.
If you are working self employed for less than 16 hours a week, and continue to sign on and actively look for full time work, you can continue to claim JSA - every time you sign on you will have to declare your hours and your earnings for the previous two weeks, in the same way that people who work part time for an employer do. Depending on your circumstances, the first £5 or £10 is disregarded, the rest gets deucted penny for penny from the benefits due to you. The amount you will get in benefits ends up changing every two weeks - personally I wouldn't recommend it.

Alternatively, if you've been claiming JSA for over 6 months, you may be able to get New Enterprise Allowance if you leave JSA to begin self employment. There's a small amount of info about it here on the Directgov website - speak to your jobcentreplus adviser and see if they can tell you more.

Also remember that you may be able to claim Working Tax Credit if you work over 30 hours a week - this will initially be based on your income from last year.

I am in a similar situation to yourself - due to a long term lower back injury I will never be able to do a full time permanent job again, but I'm not bad enough to go down the disability route - I get by with self employment and a casual part time job, and a small amount of working tax credit.

Good luck in whatever you decide to do :-)

Victoriajayne · 16 May 2012 at 10:19PM

And to correct those that say there's no sick pay - it is possible for self employed people can claim ESA - complicated, but possible !!!

Job Seekers to Sole Trader

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