Going Self Employed Advice

NewBeginnings_2

Hello i'm new here and could do with some advice.

I am due to go self employed soon.
I will be doing a few different roles. All commission based and an online retailer of a certain brand. Money is there to be made, but as we know at times business can be quiet and some weeks i may not make any money or very little.

I am aware you can claim Job Seekers Allowance when self employed if you are willing to seek other work/more work. However i know this can be quite complicated having to provide proof at every meeting of what i have earned in the weeks before etc.
Also as i will be spending a lot of time building my new business, all my time really needs to be put into this.

I also believe i can claim working tax credits of around £50 a week as i have done an online benefits assessment , but would have to prove what i am doing in my time to make up the 30 hours. I know for a fact i will be working these hours if not more.
What sort of proof will they ask for when claiming? Also estimating my income will be difficult at first.

I have recently returned to my parents home so do not need to claim housing benefit or council tax benefit.
The reason i am giving this a go is because i have the security of my parents whilst i build upon what i am about to start. As my outgoings are minimal now.

Are there any other forms of new business funding? I will be moving off Employment and Support Allowance into self employment.

I hope the above makes sense and someone could point me in the right direction?

Thanks in advance :j

pmlindyloo

This may be helpful:

http://www.revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/self-employed/

arcon5

Self employed pay class 2 & 4 NICs.
Under PAYE you pay class 1 and the employer pay class 1B (or something).

JSA is split in to two:
contribution based
income based

So once you stop paying class 1 for a period you will then need to build up 2 years continuous contributions under class 1 (PAYE) to get the former.
The latter has really !!!! thresholds. Don't know what they are but a couple years ago my OH was earning about £150/week and I become unemployed and got declined for the latter as well as the former (having been SEd for a few years at this point).

My advice:
DON'T DO IT.

Register as a limited company, pay yourself a nominal salary (keep under income-tax threshold), rest as dividends. Also doing it like this will be easier proving income as you will have payslips and records of dividends.

NewBeginnings_2

Hi everyone. Thank you for the tips. Will check out those links.

Yes the JSA route doesn't sound appealing.

blondebubbles do you do like a rota style diary - a bit like being back at school?

x

leveller2911

arcon5 wrote: »

My advice:
DON'T DO IT.

Register as a limited company, pay yourself a nominal salary (keep under income-tax threshold), rest as dividends. Also doing it like this will be easier proving income as you will have payslips and records of dividends.

Very dangerous to advise someone to register as a Ltd company with so little knowledge of the persons proposed work or finances.

Being Ltd can be beneficial for tax and also if you own your home it can be protected from creditors but theres also added costs involved such as increased accountancy fees,monthly directors meeting with accountants,corporation tax, problems with accessing the companies money when winding up the company,problems with accessing mortgages in the future etc etc etc.

I believe they are going to clamp down on the one where you pay yourself NMW whilst taking up to £28k tax free in dividends each year whilst qualifying for maximum tax credits and not before time too.. Being Ltd really isn't an advantage to many sole traders...

WillowCat

If you're currently on ESA, have you considered using the permitted work arrangements, at least at the very beginning, while you are building your business?

Once you've proved it's viable, and are starting to do more than 16 hours per week, you can move onto WTC. Are you eligible for the disability element?

See here for more details http://www.disabilityrightsuk.org/work-people-living-disability-or-health-conditions

NewBeginnings_2

wilow cat not sure how that work work...... how would i keep a log of everything for them. Might be very tricky. Having to prove my income from one week to the next think id rather come off it and start as i mean to go on. Thank you for the suggestion. No not on disability element

NewBeginnings_2

Do they allow permitted work as self employed and on a commission paid role?