Avoiding Claiming JSA and Starting My Own Business

Truegho

Rather than make a fresh claim for dole (my temp job has just finished, but I don't want to go back to the depressing ritual of signing on), I want to start my own business, will be a writing website as I have had some of my books and articles published and am starting to make around £300 per month from my book sales. However, before I register my business website with HMRC, I need to be absolutely sure that I won't mess up my money.

For instance, if I say to the Jobcentre that I have just started my own business and want to claim the New Enterprise Allowance payments, do you think I would be eligible? Also, as my writing has already proved that it is a viable business, would I still have to go through the procedure of drawing up a business plan for the Jobcentre, attend their meetings etc? And what about Tax Credits? As they are introducing this new Universal Credit system, how will this affect my claim for WTC as a self employed writer working 30hrs pwk?

I really want to start my own business, so obviously any help any of you could give me here really would be greatly appreciated.

Thanks

Caz3121

looks like you need to be in receipt of JSA to apply and have your business plan approved before you qualify
https://www.gov.uk/moving-from-benefits-to-work/starting-your-own-business

Truegho

Oh Nooooo. So that means I will STILL have to make a fresh claim with the Jobcentre, go through all the ritual of signing on, job search recording etc. etc., even though I am showing great initiative and ambition in wanting to start my own business?

Do I HAVE to apply for the NEA? Can't I just register as a sole trader with HMRC and claim Working Tax Credits as a self employed writer??

Caz3121 wrote: »

looks like you need to be in receipt of JSA to apply and have your business plan approved before you qualify
https://www.gov.uk/moving-from-benefits-to-work/starting-your-own-business

Truegho

And look at THIS:

http://www.mybusinessadviser.org.uk/new-enterprise-allowance/#

It seems that you have to be on JSA for 13 WEEKS before you can even consider applying for the NEA scheme!

As my job officially ended today, can't I just register with HMRC as a sole trader, update my claim for Working Tax Credits, and start promoting my business website without even going near the jobcentre?

Caz3121 wrote: »

looks like you need to be in receipt of JSA to apply and have your business plan approved before you qualify
https://www.gov.uk/moving-from-benefits-to-work/starting-your-own-business

pmlindyloo

Truegho wrote: »

Oh Nooooo. So that means I will STILL have to make a fresh claim with the Jobcentre, go through all the ritual of signing on, job search recording etc. etc., even though I am showing great initiative and ambition in wanting to start my own business?

Do I HAVE to apply for the NEA? Can't I just register as a sole trader with HMRC and claim Working Tax Credits as a self employed writer??

It's your choice really.

Your previous thread about working tax credit was answered with information about the 'toughening up' with the self employed so I won't repeat all that.

No one can predict how well your self employment will go although it sounds as if you have made a good start.:)

I'm sorry but I don't know your age (are you eligible for tax credits?) or personal circumstances.

If you are over 25 and single then you may want to 'go for it'.

If you have a family to support, or may have in the near future, then you might want to compromise and work during the day and do your writing in the evenings/weekend until you are absolutely certain that it is going to be 'profitable'.

I wouldn't want to be relying on tax credits under Unversal credit as a self employed person if my 'business' wasn't secure but I wouldn't want to stifle any creativity and the possibility of making loads of 'dosh' in return for a few years of being on the breadline.

Good luck with it all.

Truegho

Hi. Thanks for your advice, and your points have been taken on board.

I am 52 and live at home with my mum, who is a pensioner and gets her rent paid for her, although I do have to contribute something towards this as a non-dependant.

As I said, my writing business HAS proved to be a viable one, and so I really do think I could make a go of this. However, as I say, I really need to know for definite if I could avoid signing on and just go straight into being self employed. I don't want to go back on JSA, and with the lack of paid jobs in my area of the UK, starting my own business has become an increasingly attractive option.

Would love to hear other people's stories of getting off the dole and starting their own business.

pmlindyloo wrote: »

It's your choice really.

Your previous thread about working tax credit was answered with information about the 'toughening up' with the self employed so I won't repeat all that.

No one can predict how well your self employment will go although it sounds as if you have made a good start.:)

I'm sorry but I don't know your age (are you eligible for tax credits?) or personal circumstances.

If you are over 25 and single then you may want to 'go for it'.

If you have a family to support, or may have in the near future, then you might want to compromise and work during the day and do your writing in the evenings/weekend until you are absolutely certain that it is going to be 'profitable'.

I wouldn't want to be relying on tax credits under Unversal credit as a self employed person if my 'business' wasn't secure but I wouldn't want to stifle any creativity and the possibility of making loads of 'dosh' in return for a few years of being on the breadline.

Good luck with it all.

munchings-n-crunchings

I think you need to be careful with the working credits aspect, as well.
HMRC will want to see that that your business is earning you at least the minimum wage, for the numbers of hours worked, else you may find you do not satisfy the criteria.

Truegho

But how will I be able to prove to HMRC that I AM working 30hrs pwk on my writing business? Will I need to break down, hour by hour, what my business duties entail (e.g. writing, researching etc. etc.)

munchings-n-crunchings wrote: »

I think you need to be careful with the working credits aspect, as well.
HMRC will want to see that that your business is earning you at least the minimum wage, for the numbers of hours worked, else you may find you do not satisfy the criteria.

paulineb_2

I get working tax credits and Im self employed. I got them in 2010 when I was first self employed and had a gap of a couple of years before starting up again. HMRC have never asked that Im earning the minimum wage for the number of hours worked. All HMRC ask is that you submit a tax return. The working tax credits people also have never asked to see that Im earning a minimum wage for the work I do. Some months I will and some I wont and thats the same for a lot of people in self employment.

It will be harder to claim universal credit for people who are self employed because it will be assumed that if you work 30 hours a week you'll get at least the minimum wage, but Ive never been asked to do anything apart from submit a tax return, which Ive done twice now, obviously keep financial records and submit my previous years earnings to the working tax credit people to get an award of working tax credits.

The criteria is that you work 30 hours a week on the business. Some of the work I do in my business is admin and publicity to try and get bigger numbers in the work I do. There will be hours I work during the week that pay me more than the minimum wage per hour and hours I work that pay me less.

Getting working tax credits has always been quite simple for me and I am aware that things may be much different when UC comes in and what I would say is, be aware that you will need to factor in a change from WTC to UC and that if you get a WTC award and then lost it under the new UC system, that you would be able to manage financially.

paulineb_2

If you're self-employed


Put down the number of hours you normally spend working in your business, either on work billed to the client or related activity, for example:

• trips to wholesalers and retailers
• visits to potential clients
• time spent on advertising
• cleaning the business premises
• cleaning a vehicle used as part of the business, for example a taxi
• book-keeping
• research work

If you work from home, include time spent travelling to see customers.
If you have only just become self-employed, use the number of hours you normally expect to work in a week.

Theres information on the HMRC website, the above might help. It is possible to get a self employed credit from the DWP if you are starting a new business, but you have to be on JSA for I think 26 weeks before claiming it, its around £50 a week.

The above list was taken from HMRCs website, they have guidance on WTC and the self employed.

Also, I believe you would register as a sole trader with HMRC, not your website.

munchings-n-crunchings

Your missing the point. It's not about showing to HMRC that you have duties or workload to cover the minimum requirements for claiming working tax credits, but that you are being financially remunerated, at least at the National Minimum Wage level, for those number of hours.

Many business idea's can stem from a hobby, but some should stay at just that, and are not viable as a stand alone venture.