Self Employment and Working Tax Credits

Simon7685

Apologies for the long post in advance.........

I am going through the process of being migrated to ESA from Income Support on disability grounds. I have been on this for 6 years now, I also get CTC, CHB and DLA.

I have been worried sick about this transition partly because I know that most people are found fit for work and also because the thought of being forced onto JSA on the say so of someone that knows nothing about my problems is worrying to say the least.

Before anyone jumps on any bandwagon ans wants to call me a scrounger or anything else, I worked all my life until 7 years ago, when I became ill. Even then I spent 12 months living off savings before claiming anything, so I do not a lecture thank you.

During the last few years I have found something I can do, in my own time, at my own pace and have been thinking if I could make a go of it, going self employed and getting some support from working benefits.

I know that I can claim WTC and due to being disabled only have to work 16 hours a week, which to be fair is slightly under what I think I could manage. I would hope to put around 20 hours a week into my venture. As I will be doing this from home, I have the advantage of being able to work at obscure hours, sometimes I am up most of the night due to health problems and could even do some things during this time.

I have been trying to put a business plan of sorts together to see whether or not I could make any money from what I can do. The bottom line is over time, I think I could.

At this stage I do not want to divulge what I would do, as I think doing so isn't necessary. For the first 6 months at least I would not expect to make a penny, in the next 6 months I would expect to be able to sell between £2000 to £2500 worth of stock. this would go straight back into the venture, so the first year would probably end up with a small loss overall. The second year I would expect to at least break even and hopefully turn a profit although small. In several years time I would expect to be earning at least the minimum wage for the hours put in and who knows even more but it takes time to establish and make money.

I have looked into this in some detail and know there is a market there and money can be made. I would want to do it properly, registering as self employed, paying NI contributions and taking the whole thing completely seriously.

the problem I have come accross that is now putting all this into doubt, is the changes to the benefit system, specifically the introduction of Universal Credit. According to what I have read if I cannot earn at least the minimum wage for the hours I work, then my business will not be deemed a business and my tax credits either severely reduced or withdrawn. Also my housing benefit and council tax beneift would be affected.

Now I understand having researched this that some people have used this system as a loophole to get out of working and living off their WTC without ever doing anything, then submitting they have made a loss, year on year. That is not what I am intending to do.

I want to do something that I can do, from home, within my capabilities but at my own pace and in the hours that my health problems will allow. I will need the support of WTC, HB, CTB etc, I may take sometime to make any money but I know I can. If I could find a job with an employer willing to accommodate me and my problems, that would be fine but in realism it is highly doubtfull. If I did though and worked for up to 20 hours, they would give me the same level of support financially as this venture proposes, so why should it be any different?

I have seen for myself on these forums where disabled people have been declared as not running a business but carrying out a hobby by HMRC already and have had their WTC stopped and even had to pay it back. Can anyone offer any advice on how I can get this idea off the ground without succumbing to the same fate?

Any advice appreciated.