Benefits entitlement when self-employed?

xs11ax

Oldernotwiser wrote: »

Mmmm.

She could, of course, claim JSA.

Yes, but she would rather try her hand at running her own business. I think that she will do ok with her business. She is just worried about the first few months when business will most likely be slow. Thats why she wants to know what benefits she can claim and how much she will receive.

bestpud

xs11ax wrote: »

Am i right in thinking that she can either carry on claiming income support and child tax credits if she works less than 16 hours a week, and both of these benefits will be adjusted according to how much she earns?

...and if she works more than 16 hours a week she can claim working tax credits and child tax credits, and the amount will depend on how much she has earned in the previous tax year?

Child tax credit is adjusted annually, along with working tax credit.

It is tapered but the thresholds are higher than for working tax credit.

She won't be able to claim income support after her child turns 7, as she already knows, but she may be able to until then if she works less than 16 hours a week. The first £20 of income is disregarded and then any income taken pound for pound from the income support.

Oldernotwiser

xs11ax wrote: »

Yes, but she would rather try her hand at running her own business. I think that she will do ok with her business. She is just worried about the first few months when business will most likely be slow. Thats why she wants to know what benefits she can claim and how much she will receive.

If she's worried about having little income at the start, why doesn't she start it now while she's still on IS? There's no good reason to wait until she's unable to claim it anymore.

Dognobs

xs11ax wrote: »

Yes, but she would rather try her hand at running her own business. I think that she will do ok with her business. She is just worried about the first few months when business will most likely be slow. Thats why she wants to know what benefits she can claim and how much she will receive.

So you are saying she can work but in the eyes of the law she can't?

Sixer

If your friend starts up a business as a graphic designer, then she will need to meet the "remunerative work" and "expectation of payment" requirements to be eligible for WTC. In particular, she will need to secure at least one client/job before claiming. See www.hmrc.gov.uk/manuals/ccmmanual/CCM6750.htm. Also www.hmrc.gov.uk/manuals/tcmanual/TCM0126260.htm, www.hmrc.gov.uk/manuals/ccmmanual/ccm6745.htm and https://www.hmrc.gov.uk/manuals/ccmmanual/CCM6760.htm.

If she meets these definitions, then she can claim WTC for 16+ hours or 30+ hours depending on the number of hours she works. She will need to keep an accurate diary and copies of all quotes, invoices, emails, etc. HMRC are more likely to check this type of claimant (low-income self-employed) than many others.

If she doesn't meet these definitions, then she will need to find a PAYE job or claim JSA.