Starting a business on benefits

jessi_t

Hi all,

This is my first post so please be kind

I have been receiving incapacity benefit since the year 2000 after developing mental illness (bipolar/schizophrenia), I have attended numerous medical assessments and been deemed as unfit to work during this time.

Having been doing affiliate marketing online to supplement my income within the permitted work and earnings rules while on incapacity benefit, I realised it was the only realistic opportunity of me ever having any employment due to been able to work around my illness, so having gained some experience online as an affiliate, I decided at the end of 2012 to start my own online store and registered a business with company house and registered with HMRC for my business to start trading January 2013.

My business is currently not making any profit after 1 month of trading, in fact I made a £10 loss due to setup costs, but I anticipate that after 6-12 month the business will earn enough to support me and help me move off benefits.

But as the government is changing incapacity benefit to employment support allowance and I am due to have an interview shortly to determine my eligibility to continue to receive benefit and expect my current circumstance to be treat unfairly.

Is their any assistance or advice anyone can offer for people in my position?

Thank you for any help.

Horseunderwater

For now all you can do is go through with the ESA transfer concetrating on which descriptors fit you MH illnesses and if there are any physical problems caused by any of the medicines that you take to help you control the problems. That is the way ESA works - it is descriptor based.
http://pseudo-living.blogspot.co.uk/2012/03/esa-descriptors-and-points.html
That link takes you to a list of them - so read them through and find which ones will apply.
You need 15 points to get into the WRAG group and then the ATOS HCP will either further recommend that you stay there for 365 days or if you meet the support group descriptors, they will recommend that you be placed in there. The DWP descision maker then looks at their advice and they will either agree with them or not. You should then be given that decision within about 4 weeks of the medical. Mine came inside of 2 weeks and I was told 4. Once you know what is happening with that, then you can continue to build up your business. And you can also appeal within one month if you fail the medical with form GL24.

Teahfc

Cannot offer you any guidance but wish you all the very best in your venture and determination to better yourself

jessi_t

Thank you very much Horseunderwater for you advice

I have all the information in terms of incapacity benefit moving to ESA and the interviews and what not, having attended numerous medical assessments in the past and even going through the long-winded appeals process I am pretty well aware of how it all works.

So any advice advice more focussed to those have done a similar thing, moving from benefits, particularly incapacity benefit, to running a business would be greatly much appreciated.

Thanks again.

jessi_t

Thank you very much Teahfc for your kind words.

osdset

I don't know just how current legislation will deal with this but......It's generally accepted by HMRC and the banks that any new business will not be in profit for at least three years, that is the calculation and forecast period expected from a business plan.
The reality in a lot of cases is that the small business owner fails to even achieve a wage for the first three years, hence the need for some (hefty) start up capital.

AFAIK this new 35 hour rule under UC is totally at odds with accepted practice as no one who is self employed can guarantee a 35 hour working week, some weeks will be manic and others as quiet as the grave.

sammyjammy

osdset wrote: »

AFAIK this new 35 hour rule under UC is totally at odds with accepted practice as no one who is self employed can guarantee a 35 hour working week, some weeks will be manic and others as quiet as the grave.

Surely that depends on the nature of the business. There will be certain rules for the self employed within their first 12 months of trading I believe.

The 35 hours isn't supposed to be around accepted practice for the s/e but rather around the hours one is expected to work to claim UC, if this cannot be met with s/e work then paid employment should be sought.

BigAunty

osdset wrote: »

...It's generally accepted by HMRC and the banks that any new business will not be in profit for at least three years, that is the calculation and forecast period expected from a business plan.
The reality in a lot of cases is that the small business owner fails to even achieve a wage for the first three years, hence the need for some (hefty) start up capital.

....

Is it the convention that most businesses don't turn a profit for the first 3 years? That's news to me.

BigAunty

To the OP - if you are under 30, the Princes Trust runs an enterprise programme, helping people into self employment. Business Link is another site that gets recommended to help with business set-up and planning.