Self Employed but no work; what benefits are available?

Myusername_3

Hi, My little printing business has shrunk to the point where I'm making no money from it. Any work that comes in is swallowed by overheads leaving no room for me to draw anything.

It's our only source of income so I need to know what to expect when I sign on; I've never had to do that before!

My wife and I used to run it as a Limited company paying ourselves through PAYE so our NI is up to date until Aug 11 when we delimited and tried to continue as a partnership to save costs.

I'm not sure what info other posters will need to help, so I'll leave it there and wait for a reply.

Tia

HappyMJ

Working tax credits if you are putting in enough hours.

JSA if the hours you put into the business are under 16 and you are looking for employment. You really should shut down the business to avoid confusing the jobcentre. Profit would then need to be declared every two weeks.

Myusername_3

I'm in the process of shutting down and have a tab open with the directgov page for signing on.

We already get WTC and CTC as we haven't been able to draw much over the past year.

I've been applying for jobs for the past couple of months so 'actively seeking work' for sure. Can I expect any money from JSA? We've a p45s from Aug 11 and self assessed since.

HappyMJ

Myusername wrote: »

I'm in the process of shutting down and have a tab open with the directgov page for signing on.

We already get WTC and CTC as we haven't been able to draw much over the past year.

I've been applying for jobs for the past couple of months so 'actively seeking work' for sure. Can I expect any money from JSA? We've a p45s from Aug 11 and self assessed since.

JSA contributions based is based on the past 2 tax years before the calendar year in which you claim so 09-10 and 10-11. Income based JSA is based on what income and assets you have now.

WTC's (£89.37 a week 30+ hours couple rate) aren't that much different to JSA (£111.45 a week (couple rate income based) or £71.00 a week (contributions based or £142.00 a week if you are both looking for work, signing on and are both entitled to JSA-CB)) so you could keep working on the business even if no or small profit (under £6,420 per year) and still claim full WTC's.

aggypanthus

Happy MJ, we are in same position, but our accountant told us that the tax office will be very suspicious of a business continuing at loss, and may choose a random investigation, as an ex tax inspector maybe he was giving the worst scenario.
are you saying its acceptable to show very low profit and claim WTC, wont the eventually wonder why the business is continuing?

I do agee that OP should do as you suggest , but just puzzled after accountans advice this week

HappyMJ

aggypanthus wrote: »

Happy MJ, we are in same position, but our accountant told us that the tax office will be very suspicious of a business continuing at loss, and may choose a random investigation, as an ex tax inspector maybe he was giving the worst scenario.
are you saying its acceptable to show very low profit and claim WTC, wont the eventually wonder why the business is continuing?

I do agee that OP should do as you suggest , but just puzzled after accountans advice this week

I don't personally show a loss...Unless you want to carry a loss forward I would try and show a profit in the books by not claiming expenses that you otherwise could such as a share of household expenses...just make the expense less. You can have profit of £6,420 without it affecting WTC's. This will all change with universal credits where your profit is assumed to be Minimum wage multiplied by the number of hours you declare. Anything less will be the same as being unemployed and you'll be subject to conditionalty i.e looking for a job or to increase income.

aggypanthus

MJ, yes we too have a small profit, I was a bit annoyed at the accountans advice - he made an adjustment to expenses to increse our profit, as I explained his reasons above,but it means a drop of £40 month in TC.

Myusername_3

Sorry for the late follow up but I've been mulling over your sensible advice. TBH it hadn't occurred to me to go down this route. The bulk of my work entails using a rented workshop which will have to go but I may be able to still do some work from home.
How dynamic is the TC award? I.E. if I inform of a change of circs how quickly will my payments be adjusted?
Cheers!

Notmyrealname

aggypanthus wrote: »

Happy MJ, we are in same position, but our accountant told us that the tax office will be very suspicious of a business continuing at loss, and may choose a random investigation, as an ex tax inspector maybe he was giving the worst scenario.

Your accountant is talking out of his proverbial rear end.

If a business has been running for several years in profit, it can continue to trade for a couple of years or more at a loss ON PAPER.

My friend's shop is in its third year of trading at a loss on paper. Prior to the recession it was making a fair whack of money so is cash rich.

My wife and I used to run it as a Limited company paying ourselves through PAYE so our NI is up to date until Aug 11 when we delimited and tried to continue as a partnership to save costs.

Who told you doing this would save you money, your former tax inspecting accountant? If it was, the only thing this accountant has done for you is drop you in the crap. When you were a Ltd company, you were protected from company debts so if it folded, you basically were able to walk away. As a partnership you are now liable for 100% of them split between you along the terms of the share of the partnership so if the business folds owing money, you're going to be paying its debts from your own pockets. Your creditors can chase you personally and issue bankruptcy proceedings against YOU PERSONALLY as an end game move if you don't pay or pay to their satisfaction. Prior to that they could only apply for winding up of the Ltd company.

You've made the biggest mistake possible when a business is looking like going down the pan.

If I were you, I'd find a different accountant. A former tax inspector doesn't automatically make a good accountant.

aggypanthus

It was me who has the former tax inspector , not the other person you quoted.

I kinda agree, he seems to be giving the worst case, from his experience of how they try tocatch people out!

OP I hope you find a solution soon

Mersey_2

Claiming JSA for the first time (I know as I had to in 2009 and 2011):

It says it can be done online, but it's not very user friendly to those who have never claimed for.

Ring up and they'll give you a call back appointment time. This will take 15-20 mins going through Qs.

This will be printed out and sent to yourself to sign and take to the JobCentre, who will also have been sent a copy.

You'll need to take along photo ID, bank account details and they'll ask if you wish to also claim for Housing Benefit and Council Tax Benefit (these are administered by your local council, but JCP will inform them). As a first time claimant you may need to take along last month's bank statement, as well as Tenancy Agreement (if you rent).

In terms of what to expect: that first appointment may take upto an hour; but, after that you're required to attend a JobCentre in person, once a fortnight at the same time, to sign and also provide jobsearch evidence - but they'll explain all of this to you.

They'll also ask whether you wish to make a joint claim for JSA.