Put Off Going Self Employed As A Writer

Truegho

I have been put off from going self employed as a writer, simply because when I phoned the Working Tax Credit Office and explained to them the nature of my business, they gave me the impression that it would not be a wise step, as when I told them my initial anticipated earnings would be just over £200 per month (from book sales) and that I would be working 30hrs pwk on my business, the lady who took me call couldn't seem to understand how I would only be making this amount, despite working all those hours on my business. She them said when I registered with HMRC, I would have to keep a note of EVERY single thing per hour (e.g. invoices, customer assignments etc.) whilst working on the business. Not surprisingly, this has put me off making a claim as a self employed person.

Are there any other writers who have experienced this? If so, did it put you off starting your own business and resigning yourself to claiming dole?

The whole thing has not only dissuaded me, but depressed me, as I really wanted to start my own business.

Wicked_witch

Build it up while on JSA, declaring profits of course, then come off it when profits are at a reasonable level? I'm in much the same position, but I'm not relying on getting tax credits or any kind of extra help with UC coming in soon.

sammyjammy

Do you mean write a book? Could you not do this in your spare time until it becomes viable? Tax credits and HMRC are really cracking down on self employed people working lots of hours for mimimal pay and then topping it up with WTC. On your estimates even if that whole £200 was profit you would be working for less than £1.65 an hour. When universal credit comes in you would be treated as if you were earning minimum wage even if you weren't.

Truegho

sammyjammy wrote: »

Do you mean write a book? Could you not do this in your spare time until it becomes viable? Tax credits and HMRC are really cracking down on self employed people working lots of hours for mimimal pay and then topping it up with WTC. On your estimates even if that whole £200 was profit you would be working for less than £1.65 an hour. When universal credit comes in you would be treated as if you were earning minimum wage even if you weren't.

This really is an horrendous situation to be in for people like myself, who want to go self employed as a writer. It's Catch 22, and by all accounts this new Universal Credit system is only going to exacerbate the problems low-income self-employed people are encountering. It is madness to insist on the precondition that you need to be earning at least the MINIMUM WAGE before they will even consider helping you financially. What about these businesses that struggle to make a profit in their early years of trading?

All this has left me feeling really depressed, as I now have to get back in touch with my business advisor at The Work Programme and explain to him that after the rather dissuading manner I encountered from the lady at Working Tax Credit this morning, it really has made me want to scrap the idea of starting my own business as a published writer.

Truegho

Wicked_witch wrote: »

Build it up while on JSA, declaring profits of course, then come off it when profits are at a reasonable level? I'm in much the same position, but I'm not relying on getting tax credits or any kind of extra help with UC coming in soon.

So you mean when I go to sign on, I just tell my advisor that I have earned, say, £200 this month from self published books, and then they just deduct it from my JSA accordingly, as if I were working part-time at Tesco and earning around £80 pwk?

sammyjammy

Truegho wrote: »

So you mean when I go to sign on, I just tell my advisor that I have earned, say, £200 this month from self published books, and then they just deduct it from my JSA accordingly, as if I were working part-time at Tesco and earning around £80 pwk?

You cannot claim JSA if you are working 16 hours per week or more so this is not an option.

There is a certain period of time given under UC to build up a business, I can't recall if its six or 12 months. This is reasonable, you cannot expect the tax payer to supplement your income whilst running a business which is not viable on an ongoing basis.

Truegho

Yes, I understand about the Universal Credit rule. What I am saying is that I really wanted to make a go of my writing business, but how can I do that if, during the first year or so of my business, it is not really considered a viable business if it is not earning at least the minimum wage right away???

Truegho

sammyjammy wrote: »

You cannot claim JSA if you are working 16 hours per week or more so this is not an option.

There is a certain period of time given under UC to build up a business, I can't recall if its six or 12 months. This is reasonable, you cannot expect the tax payer to supplement your income whilst running a business which is not viable on an ongoing basis.

But if I only spent a few hours a week working on my business, as long as it didn't transcend the 16hrs, I would just tell the jobcentre how much I had earned for that month, and they would deduct it accordingly from my JSA?

sammyjammy

Truegho wrote: »

But if I only spent a few hours a week working on my business, as long as it didn't transcend the 16hrs, I would just tell the jobcentre how much I had earned for that month, and they would deduct it accordingly from my JSA?

Yes that is correct, as long as it was under 16 hours you could declare it as you go and tell them about earnings as you recieve them. You would have transitional protection under UC as well until there was a change if circumstances.

Truegho

sammyjammy wrote: »

Yes that is correct, as long as it was under 16 hours you could declare it as you go and tell them about earnings as you recieve them. You would have transitional protection under UC as well until there was a change if circumstances.

Thanks for your advice, Sammy. One question, though: when you say "protection under UC", what exactly does that protection entail?

sammyjammy

It basically means that under JSA you could declare the work and receive your JSA, if you started declaring it under UC then they would assess the hours you work as you receiving minimum wage even if you weren't. If you were already declaring under JSA there would be a period of time when the JSA rules would still apply to you. This TP is broken if you declare a change of circumstances. It's all quite complicated and we don't know how it will work in practice but it will be some time before you would be transferred over to UC anyway.