Put Off Going Self Employed As A Writer

notanewuser

Truegho wrote: »

I appreciate your comments. However, I must hasten to stress that I am certainly going to plough EVERY effort I can into making my business grow. Once it has grown to the extent that it eventually brings me in a full-time income - and then, hopefully, go on to expand beyond that - then of course I won't need any additional support. It's only in the early stages, whilst I am trying to get it off the ground, that I will be needing at least SOME monetary backup. Isn't that the case with every business? You just can't expect it to make you a fortune overnight, as entrepreneurs like Alan Sugar would probably echo. It takes time, effort and dedication.

Pretty sure Lord Sugar did it without tax credits.

Icequeen99

dktreesea wrote: »

Why are only creative enterprises being targetted? Is it because they have insufficient revenue, so, e.g. failed to sell enough paintings, as opposed to sold enough but then failed to make sufficient net profit to live off?

They are not being targeted specifically, but HMRC are looking at people declaring 30+ hrs and no income. It seems to be that those sorts of trades are more common in that group. Not just artistic areas, includes people like internet marketers.

A lot of people have been doing it for a number of years, so there has been no business growth.

IQ

SwipernoSwiping

While I am a writer, (just) I wouldn't go self employed doing it. I would never support my family. There are many sorts out there exploiting the situation, making it worse, and others just wanting to get a foot on the ladder.
Setting up in business is no easy thing. As a writer or as an anything. I have been there working past midnight to meet the deadlines because there is no-one else for you turn to.
Moving away from government hand outs to support yourself is a frightening step. UC makes it terrifying.

I do not know the person behind this blog - but I wanted to share it with anyone thinking about starting up. It helps to know all you can about the future pending. http://www.permaculturehouseintotnes.co.uk/1/post/2013/04/universal-credit-and-the-self-employed.html

It takes at least eighteen months to get a business running and sometimes longer for it to start turning a profit. It takes more than 40 hours a week to get that far. The pressures of keeping a business going kill the creativity.

Anyone who is trying this, I wish the very best of luck to.

dktreesea

Icequeen99 wrote: »

They are not being targeted specifically, but HMRC are looking at people declaring 30+ hrs and no income. It seems to be that those sorts of trades are more common in that group. Not just artistic areas, includes people like internet marketers.

A lot of people have been doing it for a number of years, so there has been no business growth.

IQ

I think the lack of business growth in recent years has been because of the recession. Our own business has been lucky and stood still rather than going backwards, but there are so many people out there, shop owners, market traders, who have a lot of stock, and financial commitments around that stock, e.g. storage costs, interest payments, who tell me they just can't move it.

Icequeen99

dktreesea wrote: »

I think the lack of business growth in recent years has been because of the recession. Our own business has been lucky and stood still rather than going backwards, but there are so many people out there, shop owners, market traders, who have a lot of stock, and financial commitments around that stock, e.g. storage costs, interest payments, who tell me they just can't move it.

Sorry, yes I didn't word that well. What I meant was a lot of the cases involve people who have claimed since 2003/04 and have had nil income for the whole of that time. Obviously some people it is just for a couple but for some four or five years worth with no evidence of growth. That said, under the current tax credit rules there is no requirement that a business grow or that you earn a certain amount from it.

But you must show that each hour was for payment or in expectation of payment. So things like spending 2 years researching to write your first book doesn't count.

IQ

Truegho

notanewuser wrote: »

Pretty sure Lord Sugar did it without tax credits.

Well, obviously, he must have done. After all, there were no tax credits when he started off, were there?

CKhalvashi

antrobus wrote: »

I'd guess because in order to be eligible for WTC you need to be working for a given number of minimum working hours. For many self employed activities there is a fairly direct relationship between hours worked and income, but writers?

It would be fairly easy for some to (for example) write one book that was published and generated some income, then claim they were a writer, working 8 hours a day on their next magnum opus, whereas they were really sat at home watching reruns of Murder She Wrote whilst waiting for inspiration.

It's not as simple as this, especially when you're dealing with the arts.

I run a music venture, which whilst it's not as such writing, it's another one of those self-employed industries where some months there's not enough to pay the bills, and some months there's so much money you don't know what to do with.

Last month, we ran a 7 figure profit, whilst most months we still run a loss, depending on exactly what we're doing, how much press attention we're getting and exactly what's being released otherwise.

I've just looked at the largest company Youtube channel, and whilst we seem to be averaging a pretty steady 8m views a week over the last 8 weeks, in March this year we hit 16m views, and in Feb last year, we hit 46m. The income disparity for those two months is shocking, and it's also important to remember that 75% of that is going straight into the pockets of someone else, before any of my operating expenses, wages etc get paid.

HMRC know the issues that many in these industries face, as do the Government, and in many cases, especially in the Arts sector, things are running extremely tightly at the moment!

CK

Dunroamin

Truegho wrote: »

Well, obviously, he must have done. After all, there were no tax credits when he started off, were there?

So, would you be doing this if there were no tax credits?

poppasmurf_bewdley

When I was made redundant in 1992, and preparing to start up my own printing and publishing company, 'writing' was specifically excluded from the type of businesses which could receive help from the government.

I don't know if a similar thing exists today.

dktreesea

Dunroamin wrote: »

So, would you be doing this if there were no tax credits?

Does anyone start a business sufficiently well capitalised to not have to rely on benefits in the formative years?

According the HMRC statistics (latest figures for the 2010/11 year were publishing last December) the vast majority of self employed people earn under £30k a year, so presumably could be eligible for significant subsidies by way of tax credits and other associated benefits, like HB and CTB.

Of the 5.370 million people who were self employed, 858,000 made a loss, and a further 725,000 people made less than £2,000 a year.

(source: www.hmrc.gov.uk/statistics/personal-incomes/tables3-1_3-10.pdf)‎

So if the OP wants to try out self employment and give it a go, he certainly won't be short of company in the established self employed community if he only makes a modest profit and needs to resort to benefits to survive.

Once UC kicks in, I wonder how many self employed people will shut up shop, given that, of the 5.37 million total self employed, 3.6 million of them had incomes of less than £10k a year, i.e. below the NMW.