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Help and advice please - on benefits but want to start up new business

Hiya all, im not sure if i should post this in the benefits forum or employment forum? Anyway....

Im a single mum of a one year old. I currently claim income support, housing benefit, council tax benefit, child tax credits and child support.

I am currently in the process of starting up my own soft play group. For those of you who dont know what that is, it is basically a baby and toddler play group where parents come to a session with their children and play with the facilities i will provide such as dolls, play tents, ball pit etc. Each session will last a couple of hours and i will charge a few quid per child. My initial lay out is quite large - about £4,000 incl insurances etc - which i will be borrowing from a family member. I will take some time to see a profit but i have every belief it will work so please no negative comments. I will also hire the equipment out for parties etc...

My question is.... Do i register as a sole trader? If so, where will i stand with my benefits? I will work approx 8 hours a week for the first few months - which i hope to keep increasing as i become more popular until im doing two 2 hour sessions per day, 5 days a week.

I can only guess how many children i will get through the door but wont be nowhere near enough for me to come off benefits just yet. Will i still be entitled to help?

Also, can i claim back vat on equipment im purchasing?

Im a bit of a novice when it comes to the tax side of things and what im to register as and who to contact... Any advice would be greatly received.

Im currently waiting for an appt to see a business advisor from my local council who im sure will confirm all my questions but that may not be for some time yet

Comments

  • If you are running a business and aren't incorporating it into a company then yes you are a sole trader and have to register as such.

    You can only claim VAT back if you register for VAT which basically means you have to increase your costs by 20% or make less profit and absorb the cost yourself. It is never worth registering for VAT before you legally have to unless (a) you are selling a 0% rated product/ service, (b) are selling predominately to other VAT registered businesses or (c) think you will never turn a profit (but this has other potential issues)


    Contacting HMRC to register as a sole trader will deal with all the personal tax side of things.


    Given the high cost of potential litigation if something goes wrong then you certainly need to ensure you get good insurance and not just the cheapest. It may also be worth considering incorporating into a Ltd company to further distance yourself from any litigation but that will carry costs (both setup and ongoing)


    Cannot help you on benefits, the Benefits board here may be better place to ask. L
  • SailorSam
    SailorSam Posts: 22,754 Forumite
    10,000 Posts Combo Breaker
    Liverpool is one of the wonders of Britain,
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  • Hey, thanks! Iv already been in contact with the job centre about this and they say i will have to be working at least 16 hours a week to qualify :(

    SailorSam wrote: »
    Is anything here of any use?
  • Get yourself referred to new enterprise allowance through the job centre - loads of support available and practical advice. You'll get a mentor to meet on a 121 basis and have all your Qs answered, they'll help with everything you need to set up your business and you'll get financial help
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