JSA whilst setting up business AND claiming startup expenses

businessquest

Hi there,

I'm new here and may have a lot of questions so please bare with me!

Something just came to my attention and am not 100% sure about it.

1. Can you claim Job seekers allowance whilst you are setting up a business as self-employed (i.e. not yet making money but getting marketing sorted and spending money towards equipment, marketing etc).

2. In regards to having to inform HMRC of being self-employed within 3 months - If you're planning your business, buying equipment and arranging marketing say 4 months in advance of getting a PAYING client and starting to make money, can you claim those expenses back? towards your tax return even though it was more than 3 months before actually starting the biz.

i.e. I start making plans for the biz January, buying equipment, paying marketing companies to market the business etc.. then get my first client May. I register as a sole trader and state 'I started my business in May'.. can I claim back the expenses from January towards the biz OR would I need to say I started my business in January before I can claim those as expenses?

Sorry if its a silly question, I'm just not 100% sure about it..

Thanks!

HappyMJ

1. You can claim JSA as long as you are working less than 16 hours on the business and also seeking full time work on the other days.

2. It it usually agreed that you should register self-employed as soon as you do your first chargeable work for a client. You would also sign off from JSA on the same day and go onto Working Tax Credits (as long as you then commit 30 hours or more to the business). Any pre-start expenses can be claimed against the income as it comes in.

businessquest

Thank you so much!

helenut

I'm going to the job center today so I can ask them for you about the JSA.
However, I thought you could only claim JSA if you are actively seeking employment - you have to fill in a booklet of what you have done each week of what you have done so far to find work and if you do not do anything then the JSA is taken off you.

businessquest

helenut thank you, that'd be appreciated. I am also looking for a short term job at the same time to help finance the future business rather than just using my personal savings.

scooby088

If you have been going to see people about equipment and or banks for loans you can put that on your jobseekers booklet, anything to with the business you are setting up is and can be classed as looking for work too..

patman99

Make sure yo pay Class 1 NIC instead of the lower class 2 NICs. That way if things go pear-shaped, you will be entitled to all the normal benefits.

themull1

If you are self employed you have to pay class 2 contributions, if you set up a limited company you pay class 1