Self Employment no profit

ijrwe

PlutoinCapricorn wrote: »

Perhaps people at the JobCentre encouraged some of them to 'start their own business' and it sounded good.

One of my friends was on JSA a couple of years ago and reportedly was told this in no uncertain terms by her chap at the Job Centre - she was encouraged to think of ways to become self employed and told about WTC as being roughly equivalent to JSA in £ terms. I've no doubt that there's been an intentional push to get people onto WTC.

Hell, it even sounds better for the recipient. If I had to admit to one or the other then I'd much rather talk to people about receiving "tax credits" rather than JSA, it feels a lot more legitimate and less scroungey. Very appealing.

PlutoinCapricorn

Ijrwe, this is the point I was trying to make. I am sure that many brazen people do deliberately exploit the system and want to evade the responsibilities that come with JSA, but I think that others are given false hope about their prospects.

dori2o

dktreesea wrote: »

The whole point of working isn't just to have a viable business; it's to be able to support yourself, from your own efforts, at least to the extent of hours worked * the NMW. Surely that should hold true for those who choose to support themselves and rely on the state for a top up as it does for low income employees?


Yes, it may well be that a lot of people who currently are opting to work for less than the NMW will be out of pocket with the new policy, but what's to stop the one man bands working harder? If a market trader needs to work 7 days a week in order to make a profit equivalent to "4 hours a week at the NMW, so £156 a week, then why shouldn't he do just that?

It's nothing to do with many of these businesses not working hard enough. Our local greengrocer is self employed. He's closing his shop on 30 Jan because he isn't making a profit large enough to support himself. One thing he is though is very hardworking.

Every morning I see him at 6:30 opening the shop, then he has to cart all the display equipment, the fruit and veg etc outside which is being displayed the shop, then gets the inside of the shop ready for 8am when he receives a daily delivery, then he opens at 9.

The shop is open 5 days and he does a market stall on Saturday.

Just because he's not earning at the NMW rate doesn't mean he's not hardworking, and in a majority of cases I believe this to be the case.

We've just come out of the largest downturn in 40 years and whilst larger companies are making money it's even harder for the (genuine) one man bands to compete. Making them financially wrse off.isn't going to make the country any better off. It will also act as a barrier to these people taking their business forwards as they won't have the money to invest.

It's bad enough that self employed people are disadvantaged when it comes to claiming benefits, but to treat them as 2nd class citizens for tax credits/UC is a disgrace.

I'm still yet to receive an answer to my question I psted earlier.

When these people have to stop being self employed where exactly are they going to work, especially those in the north where the economy is contracting.

There's not enough jobs available now to those already claiming JSA.

dktreesea

dori2o wrote: »

It's nothing to do with many of these businesses not working hard enough. Our local greengrocer is self employed. He's closing his shop on 30 Jan because he isn't making a profit large enough to support himself. One thing he is though is very hardworking.

Every morning I see him at 6:30 opening the shop, then he has to cart all the display equipment, the fruit and veg etc outside which is being displayed the shop, then gets the inside of the shop ready for 8am when he receives a daily delivery, then he opens at 9.

The shop is open 5 days and he does a market stall on Saturday.

Just because he's not earning at the NMW rate doesn't mean he's not hardworking, and in a majority of cases I believe this to be the case.

We've just come out of the largest downturn in 40 years and whilst larger companies are making money it's even harder for the (genuine) one man bands to compete. Making them financially wrse off.isn't going to make the country any better off. It will also act as a barrier to these people taking their business forwards as they won't have the money to invest.

It's bad enough that self employed people are disadvantaged when it comes to claiming benefits, but to treat them as 2nd class citizens for tax credits/UC is a disgrace.

I'm still yet to receive an answer to my question I psted earlier.

When these people have to stop being self employed where exactly are they going to work, especially those in the north where the economy is contracting.

There's not enough jobs available now to those already claiming JSA.

If people who are self employed have their benefits cut because they are not making a certain amount of profit, i.e. the NMW times however many hours is applicable for their particular circumstances, then how does that make them second class citizens? At the moment the playing field, when it comes to accountability, is hugely in their favour.


For example, people working as employees can have to work 30 hours a week to even be eligible for WTC. That will greatly affect the amount of their award for a myriad of benefits, including housing and council tax benefits. A self employed person with similar circumstances may have to work 30 hours a week, but they don't have to earn any profit at all, just be running a business in the hope/expectation of making a profit.


An employee has to provide proof from a third party, via a payslip, showing the number of hours worked. The self employed person just has to self certify how they spent their 30 hours. If indeed they are even asked. HMRC isn't exactly overflowing with investigators these days.


Yes, someone could be long term unemployed, on job seekers allowance for 10 years, with no job to show for it. Does that mean a self employed person should enjoy the same uninterrupted cash flow for their marginal/zombie business for the same time span?


Maybe some self employed people do work quite hard for not much reward. I certainly wouldn't like to be a dairy farmer indentured to the likes of Asda and Tesco. Nor a corner store owner, nor a greengrocer for that matter. But why should benefits for the self employed be provided indefinitely regardless of how hard a person works, and at the maximum rate? They certainly aren't for people who work as employees.

dktreesea

dori2o wrote: »

I'm still yet to receive an answer to my question I psted earlier.

When these people have to stop being self employed where exactly are they going to work, especially those in the north where the economy is contracting.

There's not enough jobs available now to those already claiming JSA.

Not having sufficient income to live on could happen to anyone. People on zero hours contracts, people laid off/sacked/made redundant. School leavers who can't get taken on in the workforce. People going back into work after many years out of work, say due to caring responsibilities or bringing up a family.


The fate of the formerly self employed will be as for the rest of the people out of work. They'll presumably go on the dole while they look for a job - any job. The formerly self employed person may well regard that a poor outcome from their perspective, but the taxpayer might regard it as an improvement. At least there would be a job centre jobsworth looking over their shoulder and checking up on them, making sure they are putting a genuine effort into looking for work.

dori2o

dktreesea wrote: »

Not having sufficient income to live on could happen to anyone. People on zero hours contracts, people laid off/sacked/made redundant. School leavers who can't get taken on in the workforce. People going back into work after many years out of work, say due to caring responsibilities or bringing up a family.


The fate of the formerly self employed will be as for the rest of the people out of work. They'll presumably go on the dole while they look for a job - any job. The formerly self employed person may well regard that a poor outcome from their perspective, but the taxpayer might regard it as an improvement. At least there would be a job center jobsworth looking over their shoulder and checking up on them, making sure they are putting a genuine effort into looking for work.

So you would rather a hardworking person who is fighting to make their business profitable be left to rot on JSA just because they will have to have a meeting every other week with a JCP adviser?

Any business that just breaks even in it's first few years of trading is actually doing well atm such is the state of the economy, despite what the Goovt would have you belive, and yet these people are to be given only 1 year to build a profitable business that provides a net profit in excess of NMW.

It takes no account of the set up costs for businesses, it takes no account of the need to build a reputation and a customer base. It gives no relief fr those businesses who for whatever reason may have a blip and have a couple of bad years, possibly due to investment etc..

IF the policy was to allow a start up business a longer period of time in order to get to the levels of profit which match/exceed NMW (say 5 years) then I wouldn't have a problem with it, but that isn't the case, it gives these businesses 1 year in which to build the business, gain the reputation and build a customer base which is a complete joke.

The danger of this policy is that it will eventually be extended to include employed people.

Those who work part time will under UC's claimant commitment already be required to look for additional hours/alternative work with more hours of face a sanction on their benefit. However, it is extremely likely that the policy will soon extend to those people in FT work but only wrking for NMW. These people will be forced to look for higher paying work/additional work, and it will be part of the claimant promise.

This is despite the fact that many people simply will never have the necessary skills to earn more than 10% above NMW.

It's just another in a long line of policies designed to hit the most vulnerable and take peoples attention away from the fact that the economy outside of London is at best flat lining.

Investment is what is needed to improve the economy, especially in the North which is contracting, with 1 job lost here for every 12 gained in London.

Rather than focussing on those people on benefits which is doing nothing to improve the economy the Gov should be doing whatever is necessary to get businesses to invest north of Watford Gap. Whether it be tax breaks, subsidy, relaxed planning regulations etc etc, effectively the Gov should close London to new investment and insist that new businesses invest across the whole country for the benefit of everyone, rather than just benefiting the few.

dktreesea

I would expect anyone earning the FT NMW will be left alone regarding any benefits they may therefore qualify for.


If the latest Dispatches programme, called Low Pay Britain (Link; http://www.channel4.com/programmes/dispatches/)
is anything to go by, anyone earning less than that, be they employees or self employed, are in dire straits when it comes to getting paid. From well known high street names, like Tesco, down to large employers that no one has ever heard of, like online fashion retailer Asos, ...well, some of the practices are so dodgy, words don't do them justice.


This makes me think the only rational decision for the self employed is to knuckle down, or smarten up their business practices and make sure they are earning at least the FT NMW. Because for sure, if they are hoping the working for someone else world will provide them a better chance of a good income, they're dreaming.

londonTiger

NorthFin wrote: »

Just wondering if there are any rules about what you can do for a self employment business for working tax credit claims.

Talking to someone who said there are stupid buinesses starting up who make no profit every year, they just live off WTC.

Someone said they were a full time treasure hunter, they spent 40hrs a week out with their metal detector. Loads of expensies but never finds anything (that they report)

Another was a full time gardener, who spend all the working week at his allotment. He is supposed to sell the produce but eats most of it himslef and never makes a profit, just has loads of expenses.

So are there any rules governing what someone can do? Could somethings be not accepted as genuine businesses?

I keep hearing about you have to make min wage after the first years trading, but it all seems to be just talk, some of these bogus businesses are making a loss year after year. They just live off WTC, or soon to be UC.

Are any of these actually true stories or completely made up? I find it difficult to get to grips with how 3 people will share their income situation with you. Unless of course you live in that neck of the woods were everyone around you is a scrounger and lives of benefits.

A single person aged 25 or over gets a slight topup if their income is between 10K and 13k. Couples are assessed jointly and get a small top up from 10k to 17K combined income.

The amounts are so small that nobody can live off working tax credit alone - they'll need a real viable income. Also the rules are you need to be earning at least minimum wage and working 30hrs individually or 16hrs as a couple.

These will automatically disqualify the "cases" you have indentified above.

pinpin

is it means tested?
One couldn't claim income based jobseekers if they have a certain amount of savings, but can they claim self employed working tax credits for their new business idea if they have lots of savings?

tomtontom

londonTiger wrote: »

Are any of these actually true stories or completely made up? I find it difficult to get to grips with how 3 people will share their income situation with you. Unless of course you live in that neck of the woods were everyone around you is a scrounger and lives of benefits.

A single person aged 25 or over gets a slight topup if their income is between 10K and 13k. Couples are assessed jointly and get a small top up from 10k to 17K combined income.

The amounts are so small that nobody can live off working tax credit alone - they'll need a real viable income. Also the rules are you need to be earning at least minimum wage and working 30hrs individually or 16hrs as a couple.

These will automatically disqualify the "cases" you have indentified above.

That 'rule' does not exist under WTC. Something similar will eventually be brought in with UC, but your figures are wrong for that too.