Permitted work - self employment income fluctuation?

MEsteve

Can anyone advise me on this issue:

Im considering trying some permitted work - Im on ESA having had Chronic Fatigue Syndrome for 10 years. I understand the limitations of PW - has to be less than 16 hr and £104 a week max.

The idea I have as a musician is to create and then sell some 'sounds' online. The issue I have is if I do a good job - I will get an influx of sales and then naturally it will decline. I doubt over the period of time it takes me to make them divided by the sales it will amount to over £104 pw and I will be doing much less than 16 hours. My question is - how does this variable income stream work in the eyes of the DWP? Is it ok for it to be worked out in retrospect?

rogerblack

MEsteve wrote: »

The idea I have as a musician is to create and then sell some 'sounds' online. The issue I have is if I do a good job - I will get an influx of sales and then naturally it will decline. I doubt over the period of time it takes me to make them divided by the sales it will amount to over £104 pw and I will be doing much less than 16 hours. My question is - how does this variable income stream work in the eyes of the DWP? Is it ok for it to be worked out in retrospect?

In principle income for self-employed work can be averaged.
This is usually applied for the startup period of a buisness, but can be extended if reasonable.
In addition, if in the work-related group, you can do this only for a period of 52 weeks. Once you earn more than 20 pounds in one week, from the 53-105th week, you can't earn more than 20 pounds again.


Quoting from an earlier post, so not all directly applies.
'20 pounds' refers to the lower limit - the upper limit is ismilar.

Unfortunately, there is no handbook or leaflet on this, and the guidance to decision makers in internally contradictory.

See https://www.gov.uk/government/publications/decision-makers-guide-vols-8-and-9-employment-and-support-allowance-staff-guide - for the whole lot.

You specifically want to read the 'self employed earners' and 'general rules on income' parts.

In short - it's not 20 pounds, it's 20 income, after tax, certain NI conts, (probably not applicable unless you set up a company so you're actually employed not self-employed), half the amount you contribute to a personal pension, and expenses wholey and unavoidably due to running the business.

They may average it, but it depends on their interpretation of the guidance.
One bit says 'the period of averaging should be extended as time goes on up to the first 12 months' - which implies you can earn 40 pounds in week 1, then 140 in week 2, ...

But the examples are all averaging over a shorter period.

Then there are 'bushiness cycles' rules - if you earn once every 4 weeks, for example this may be a appropriate.

In short - it's horribly confusing.
Try to understand the above guidance, and then submit your PWK form, register with HMRC, and then negotiate with your personal adviser, or whatever they call them.
Get their direct phone number first time they contact you.

Be careful.
If you earn too much, then your money is not reduced, your claim ends, it is not suspended, and you need to reapply.
This is why you need to get it really clear, ideally in writing, what the averaging rules are.

A personal pension you can flexibly put excess money in would be useful.
I'm unsure how that works, but from an ESA point-of-view, if you put in 100 pounds a week, then you can earn the earnings limit + 50.

You absolutely need to register - they don't have to treat any work as permitted work, and as I understand it any work done outside the permitted work rules has no allowance. That is - earn 20 pounds, and your benefit is reduced by 20 pounds.
In addition, permitted work is to be ignored when assessing capability of work.
Other work is not ignored.