Claiming Housing benefit while being self employed... is it going to be a headache?

Adele_Levy

hiya,

i am in a wheelchair and have some other medical issues, at present i work 5 - 7 hours a week in a school helping the kiddies with things - nothing exciting but it stops me going mental.

im thinking of setting up a little business, nothing huge just designing little keepsakes and cards.

if i do this how will it affect my housing benefit? i been researching and it seems a bit of a nightmare. as it will be a new business i will have no income only estimates.I only will be working a few hours a week.

can the council deny me any benefit? i been reading some horror stories about all benefits being cut or the council needed audited accounts?!

will the council believe im only doing a tiny business? my doctor already has given me a certificate stating i can only do 14 hours a week, can i use this as proof? if not it wouldn't be worth getting an audit accountant, the money i spend on that will destroy any profit i make?

thanks

adele

rogerblack

You can claim - however you will need to submit frequent basic accounts.
These will be different from what you will eventually need to hand to HMRC (you have to register as self employed before doing anything), as there are different allowed expenses for HB/CTB.
Are you currently in reciept of ESA?

Adele_Levy

Yea I already looked at HMRC. Will register as a sole trader.

I think alot of the expenses are not applicable to me. I mean I'm only gonna do a few hours a week I won't be doing some the expenses the council are on about.

I am not suitable for esa. I lost my appeal. They say I can still do some work. I can claim again but I don't see the point. I won't win.

So I just wanna earn a bit more and enjoy what I do.
I just don't want the housing benefit to be a headache.

Adele_Levy

regular accounts won't be a prob.

coffeelover65

LA's aren't able to accepted projections/estimates for self employed cases. What usually happens is you'll provide your income and expenses for the first 1-2 weeks and your claim will be assessed on this. Then later on (it differs with each LA) you'll need to provide accounts covering a set period, maybe 2-3 months worth.

List all the expenses you have when you claim and they'll decide which are allowed (note allowable expenses for CTB differ to those allowed for income tax purposes).

Also summarise your accounts, a lot of people try to submit all their invoices and expense receipts and expect the LA to do their accounts for them and then complain when they're returned and told to summarise them themselves or hire an accountant.

Adele_Levy

coffeelover65 wrote: »

LA's aren't able to accepted projections/estimates for self employed cases. What usually happens is you'll provide your income and expenses for the first 1-2 weeks and your claim will be assessed on this. Then later on (it differs with each LA) you'll need to provide accounts covering a set period, maybe 2-3 months worth.

List all the expenses you have when you claim and they'll decide which are allowed (note allowable expenses for CTB differ to those allowed for income tax purposes).

Also summarise your accounts, a lot of people try to submit all their invoices and expense receipts and expect the LA to do their accounts for them and then complain when they're returned and told to summarise them themselves or hire an accountant.

Thanks that's not a prob ill make sure my excel spreadsheet is updated along with all invoices generated as well. I will also save any info about purchases.

One q for you coffeelover65 will the council have any probs believing I'm running a small business and only generating a tiny income? I mean I can provide bank accounts and also show my tax return. Is that ok?

coffeelover65

Adele_Levy wrote: »

Thanks that's not a prob ill make sure my excel spreadsheet is updated along with all invoices generated as well. I will also save any info about purchases.

One q for you coffeelover65 will the council have any probs believing I'm running a small business and only generating a tiny income? I mean I can provide bank accounts and also show my tax return. Is that ok?

No, they'll accept whatever you provide in writing, also your tax return is irrelevant when assessing CTB as the allowable expenses differ so there's no point in submitting this. Additionally nobody expects new businesses to make much money when they first start. All they'll ask for is the period your accounts cover, the income, and a list of expenses.

Adele_Levy

coffeelover65 wrote: »

No, they'll accept whatever you provide in writing, also your tax return is irrelevant when assessing CTB as the allowable expenses differ so there's no point in submitting this. Additionally nobody expects new businesses to make much money when they first start. All they'll ask for is the period your accounts cover, the income, and a list of expenses.

Thanks ever so much. It's great having a housing benefit advisor - advise me lol.

I think I'll give it a go. The council def won't cut off my housing benefit though? If I tell them as soon as I'm registered with HMRC and stuff I'm being totally legit. And hiding nothing so they can't yea?

306chris

I have claimed HB while SE in the past and my council were a right royal pain. In the first two years of being self employed I was earning enough to not need claim any benefit however in the last year (I did three nad a bit years) the income dropped to silly amounts.

Now my local council would only accept the last twelve months bank statements as proof of income. So I had to wait for nearly a year for my last twelve months income to be a reflection of the downturn in trade. Worst year in my working life ever.

Adele_Levy

306chris wrote: »

I have claimed HB while SE in the past and my council were a right royal pain. In the first two years of being self employed I was earning enough to not need claim any benefit however in the last year (I did three nad a bit years) the income dropped to silly amounts.

Now my local council would only accept the last twelve months bank statements as proof of income. So I had to wait for nearly a year for my last twelve months income to be a reflection of the downturn in trade. Worst year in my working life ever.

Ouch. That sounds nasty.

I guess I'm a bit different cos I'm starting with nothing. But sounds nasty and shows it can be a pain. .

osdset

The OP might well want to consider that under the new regulations which come into force with the implementation of Universal Credit HMRC will be calculating income tax on the basis that the self employed person is earning the equivalent of 35 hrs per week at National Minimum Wage = £216.65 (gross).