Single Parent on Benefits going Self Employed...

crawfy

Hi Guys,
I'm a single parent to a 4year old boy and am currently receiving Income Support, Child Tax credits and Child Benefit. I finished a college course in July and now ready to set up a small business from home providing Acrylic and Gel Nail Extensions.
I'm only initally charging £10 for this service and have worked out it prob costs me around £6 in products. I know this is very little earnings but whilst i'm setting up i want to gain experience and build on my skills. Eventually i will be charging £20 for them.

Can anyone advice me what i need to do now in regarding to the benefits i'm currently receiving? will i lose money? do i need to declare this at the moment? I'm completley new to this and have no clue where to start so any help would be fantastic - i'm really don't want to get in to trouble and do things wrong!

Thanks guys x

karenx

You first need to register as self employed. If working 16 hours plus you can claim working tax credits instead of income support. If you want to stay on income support there is a £20 disregard so anything over this that you earn is taken off income support.
With working tax credits you just estimate your income for the year and tell them this. Then tell housing benefit you are now working and they will want to see copies of your profit/loss accounts every few months to make sure you are getting the right amount.

crawfy

karenx wrote: »

You first need to register as self employed. If working 16 hours plus you can claim working tax credits instead of income support. If you want to stay on income support there is a £20 disregard so anything over this that you earn is taken off income support.
With working tax credits you just estimate your income for the year and tell them this. Then tell housing benefit you are now working and they will want to see copies of your profit/loss accounts every few months to make sure you are getting the right amount.

do i register through the job centre?
I don't think it'll be quite 16hours a week at the moment as my son will be going to nursery 2 days a week but only gets 12hours a week due to the nursery being full. How do i show them my earnings? Is it done with a week owing?
Will the housing people being happy just looking at a spreadsheet with profit/loss? i want to keep everything simple at the moment whilst i find my feet!

karenx

No you do it with the inland revenue, and as your self employed you also need to complete a tax return at the end of the tax year to see if you owe any tax.
Ok if your working 12 hours keep with the income support for now. And you only get to keep £20 a week of your earnings and anything else is taken of your income support. So if you made £50 one week you keep £20 and £30 is deducted from your IS.
Yes a spreadsheet would be fine but they might also want to see your receipts

merlin68

Rule no.1 Have you got public liability insurance? Have you checked with your mortgage provider or landlord that you can do this at home?

peainapod

You'll lose income support if you work 16 hours or more a week. If you work under 16 hours they'll disregard the first £20 of every week and pay you the rest, for example you get £60 week income support, you start work and work 10 hours a week and earn £40 a week. They'll ignore the first £20 but the other £20 they'll deduct from your income support, so you'd get your wages plus £40 income support.
You will lose housing benefit but you can get an extension for the 4 weeks you're in work though, and after that you provide them with 3 months projected figures for your business and based on that they will pay you housing benefit if you're earnings are low (housing benefit on low income grounds).
Child tax credit will change again depending on your income, child benefit will remain the same. Council tax will be affected in the same way as housing benefit.
How long have you been on benefits ? If you've been on them long enough you'll get £40 a week in work credit for the first 12 months and you can also have £250 back to work grant for buying things like uniform etc.
I got all this the other week after I asked the lady in job centre the same question
Good luck with everything and I hope it all works out for you

Sam____2

Remember too OP that it won't just be the time you spend with clients that counts towards your working hours, any paper work, marketing, collecting stock etc will also count