To be or not to be self employed....

a_very_poor_fluffy

Hi i m new to this forum, please be gentle with me! I am deaf so its possible that I am missing too many information before becoming self employed two years ago. For example i was never notified i should apply for 'tax exception from liability for class 2 contributions' because for the last two tax years my net profit is only £300, and yet i paid NI contributions of about £30 a month! and i also have no other employment.

Now the question i wanted to ask, is it worth to carry on being self employed when i would have similar net profit for this tax year (or maybe not), and STILL having to have to pay for all the NI contributions? (i know they should be lower this time after my application)

Its just that I m starting to feel I might be better off stop being self employed and go and claim for Ni contribution based JSA? Sorry to whinge.... I have no job coming up, apart from being approached by people who know i m SE and saying they ll give me some work, but same time i personally would prefer regular work not one off work.

I personally would prefer to get a proper job and be on a payroll, remember i am deaf therefore jobs are doubly scarce for people like me :-P

nzmegs

There are advantages to being self employed - particularly for people with disabilities. But you need to weigh up if these are worthwhile for you. I assume you are on some sort of benefit as well, as your earning are not enough to sustain you.
The point of a business is to build it up, so you need to puit your efforts into getting more work or clients and earning more. if you can see no way of making your business pay more, then wind it up. But only if you have a job to go to. Otherwise, some income is better than none.
So my best advice is to really put some effort into making your business work and begin to become more profitable. then decide.

a_very_poor_fluffy

Yes it makes sense. I m a freelance teacher, and am claiming tax credits as am living with a working partner and we have a kid.

Hammyman

I became self employed because, like you, I'm disabled so I can no longer do my previous job. I set up a business selling used laptops to stop me going insane more than anything else. I'd been on ESA for about 4 months and was going barking mad.

My turnover in my first year of trading (9 month period) was just short of £40k. On paper I made a loss of £80 but I never made a loss on anything I sold. This was without any book cooking but merely claiming everything possible.

Apart from it keeping you sane, remember that if you decide to go onto JSA, unless you have a partner working more than 16hrs a week if you've kids or 30hrs if not, you lose Working Tax Credit plus the Disability Component of it. For me, that'd cost me about £7k.

Regarding the Class 2 NIC opt-out. I didn't. Why? Because it affects things further down the line and reduces your ability to qualify for ESA. Your NI contributions are approx £30 per QUARTER, not monthly.

Customers will not magically appear out of thin air. You need to do some advertising. The most effective I've found is business cards or postcards on supermarket message boards, the local newsagents and takeaways where there is a captive audience I advertised in the newspaper but it didn't get me anything. Also, in your emails, add your company name to your email signature so it looks something like:

John Smith
JS Landscape Gardening
01234 567890

That will go out with every email you send.

Horace

I have been self employed for a smidgen over 12 months now, thankfully I had been advised about the Class 2 NI exemption. Finding customers is hard so I have a website (in fact I have two as one contains a blog), I network, I use twitter and have a facebook page as well as being on LinkedIn. I work as a wedding & corporate event planner but have diversified a bit and undertake mystery shopping to fund my business insurances. I recently joined a business club and am now on their committee as the events organiser, although the time used to fulfil this role is unpaid it raises my profile and proves to people that I can organise events and therefore they are likely to use me because they will have experienced the work that I can do.

Customers will not come to you if you sit at home and make no effort.

I would have thought that after 2 years your business would be providing an income but if not then maybe you should think of winding it up when you have found alternative employment. One thing that I do know is that the new government are actively discouraging people from claiming incapacity benefit (or whatever it is called these days) and getting people off benefits and into work.

Use free services such as Business Link - for courses and advice.

Good luck.