Very disappointed with benefits for self employed

aughermon

I was employed and self employed as I was trying to build up my business and so needed the employment to pay the rent etc. Unfortunately I was made redundant from the employment as it was sold and the person that bought it had their own employees.

So I decided since I am receiving no income from my self employment presently to seek help from benefits. I wasn't entitled to jobseekers even though I had been working, and was advised to go for tax credits, I did this and they awarded me £95 per month, then spoke to housing benefit who will give me £90 a week and take off the amount the tax credits from the amount the are giving me as income. So therefore taking off the £95.

Im in total shock, I have worked all my life and never claimed benefits, I have a £680 a month rent to pay, this is also required for my business as well as having to live.

If you work it out basically I have to find £300 plus rent a month and also money to live on.

I would be better off giving up my business and going onto jobseekers which I really dont want to do.

How can this be the case when there are so many people out there who are not trying to work and when you do you are penalised and not given help when you most need it. Im not looking for a long term benefit situation, just a few months so I can get myself on my feet. Presently I am really struggling and finding it so hard to comprehend.

Have I missed something here?

KimYeovil

Why should benefits support a non-viable business? Why should benefits provide a seed fund for your business? If you have a viable model contact a bank for a start-up loan. Or save up the capital from when you were an employee (too late for that now, though.)

pipscot

aughermon wrote: »

I was employed and self employed as I was trying to build up my business and so needed the employment to pay the rent etc. Unfortunately I was made redundant from the employment as it was sold and the person that bought it had their own employees.

So I decided since I am receiving no income from my self employment presently to seek help from benefits. I wasn't entitled to jobseekers even though I had been working, and was advised to go for tax credits, I did this and they awarded me £95 per month, then spoke to housing benefit who will give me £90 a week and take off the amount the tax credits from the amount the are giving me as income. So therefore taking off the £95.

Im in total shock, I have worked all my life and never claimed benefits, I have a £680 a month rent to pay, this is also required for my business as well as having to live.

If you work it out basically I have to find £300 plus rent a month and also money to live on.

I would be better off giving up my business and going onto jobseekers which I really dont want to do.

How can this be the case when there are so many people out there who are not trying to work and when you do you are penalised and not given help when you most need it. Im not looking for a long term benefit situation, just a few months so I can get myself on my feet. Presently I am really struggling and finding it so hard to comprehend.

Have I missed something here?

The in-work benefits for a self-employed person are the same as those for an employed person: namely tax credits, housing benefit, council tax benefit. However, in-work benefits do assume you are also drawing an income (employed or self-employed) and are simply not designed to support a self-employed business that is running at a loss/low profit.
Have another think about going onto JSA - maybe this is not the right time for you to be running a business - you need money right now for food and rent. This is not a time to be chasing your business dreams - you need to get your priorities right.

Caz3121

Also sounds like your rent is far higher than the LHA for your area/circumstances - can you move somewhere cheaper

Sixer

OP: I feel your pain, but I do think you should listen to what others have said. You're working for nothing in the hopes of profit in the future. That is a capitalist system risk and it needs to be funded by capital (banks, venture capital, etc) not the welfare system. If someone decided to volunteer instead of working at paid employment, would you be happy for welfare benefits to pay their rent and living expenses due to their nil income? Where is the difference?

Is your rent high because it doubles as business premises? Can you find somewhere cheaper? Have you investigated sources of capital - eg banks or third sector small business support organisations?

merlin68

From what
I can gather on the new universal credit coming in, in 2013, self employed people will not get any tax credits.

pipscot

merlin68 wrote: »

From what
I can gather on the new universal credit coming in, in 2013, self employed people will not get any tax credits.

That's not strictly true - universal credit will assume earnings of at least the national minimum wage for the hours claimed. In other words, if a person claims they work 30 hours, then they are assumed to have a profit of at least (30 x £5.93) per week which is about £9k
i.e. they can't receive benefits based on a lower income than this

HappyMJ

aughermon wrote: »

I would be better off giving up my business and going onto jobseekers which I really dont want to do.

Have I missed something here?

Yes you have..You wouldn't be better off on JSA. It sounds like you are making a profit which is good. JSA is only £67.50 per week. If you weren't making a profit at all you would get maximum housing benefits. Are you claiming all the expenses against income that you can to minimize your profit. If you work from home you can claim a portion of the expenses of the house such as gas/electric and telephone bills.

michelle1506

What does the 30*5.93 mean? Could you explain the calculation a bit clearer? Having a blonde moment here!

Thanks

pipscot wrote: »

That's not strictly true - universal credit will assume earnings of at least the national minimum wage for the hours claimed. In other words, if a person claims they work 30 hours, then they are assumed to have a profit of (30*5.93) per week which is about £9k
They will then receive benefits based on this assumed income of £9k

pipscot

michelle1506 wrote: »

What does the 30*5.93 mean? Could you explain the calculation a bit clearer? Having a blonde moment here!

Thanks

Under universal credit rules:
if you are claiming you work 30 hours, then you multiply 30 by the national minimum wage (£5.93 at today's rate but probably more when universal credit comes in). This is your assumed (minimum) weekly profit from self employment.:):)

aughermon

Thanks for your replies, I am not expecting the welfare system to fund my business in the slightest, just help me out over the next few months (given the fact that I have worked for the past 26 years and paid tax at the highest rate) as for claiming jsa, in 3 months time I won't require any benefits at all, have a very viable business with no loans or grants I have funded this myself through my employment which unfortunately ceased just at the wrong time. I have contracts in the pipeline that will give me the monetary income that I need to survive and further the business and not require any benefits. Can't move due to the business that I am in, I need the land/outbuildings that come with the property and did look for somewhere cheaper but no chance for a place like this they are in excess of £1000 per month. I live very frugally and grow my own food both vegetable and meat so to speak, live on very little so the rent is the main issue. And obviously the fuel as I am very rural.

HappyMJ, yes I am claiming all my expenditure and the use of the house for the business as well as the rental of the fields etc, my expenses are quite high at the moment (gradually getting lower) and I am trying to mimimise these even further without being detrimental to the business. Had quite a lot of start up costs last year as well.

Sixer, I didn't want to go down the road of bank financing as I basically want to try and have no debt as I dont have any otherwise, I have tried to look for grants and funding but so far have come up with nothing.

Just a bit miffed that the tax credits I get are then taken off my housing benefit as an income. Was not expecting to have my full rent paid, that wasn't what I was looking for, just some help but you get the credits for the work you are doing and then housing take this off the amount they give you, if I had the both even the extra £95 a month this would make so much difference.