Benefits, self-emplyment, "gainful employment" and "minimum income floor"?

shegirl

Not for much longer she won't! That's more like a paying hobby than a business. Does she not sell online or elsewhere during the week? If a piece of jewellery takes days to make it should sell for an expensive price btw

dktreesea wrote: »

Not true, not under the current regime at least. There are plenty of self employed businesses that declare losses year after year and get their maximum entitlement to benefits as a result.


All that you have to show for WTC is that you are trading with the expectation of making a profit and justify the hours you claim to be working each week. Do you seriously think there are no self employed people out there working for less than 50p an hour? There are plenty. In 2012/13 the median income (median, not average) for the self employed was £207 a week.


Our neighbour has a small jewellery business. She makes jewellery throughout the week, sometimes taking a couple of days to make one piece, and sells them at craft fairs once a month, twice coming up to Xmas. If she makes £200 on the day she says its a good sale. She claims her full entitlements.

dktreesea

FBaby wrote: »

That's what I mean by facing reality.


Well worth it to show a decrease in the number of people looking for employment, not well worth it from a tax perspective. If all the 4 people employed were entitled to JSA before, but now get more tax credits instead working, I can't see how there is any financial benefit in them working.

Surely the ultimate goal is for workers, all of them, to pay more in than they take out. Paying tax credits for years at the highest levels just to justify that the person is working doesn't seem very productive to me.

It's well worth it to be self employed at the moment (under HMRC) instead of on JSA (under DWP). HMRC for the most part leave you alone. There are no sanctions.

dktreesea

shegirl wrote: »

Not for much longer she won't! That's more like a paying hobby than a business. Does she not sell online or elsewhere during the week? If a piece of jewellery takes days to make it should sell for an expensive price btw

Yes, it may well be expensive, but it's a bit like the painter and decorator who wants to only work if he gets £20 an hour when the going rate is £5 and hour or thereabouts. She prices her stuff quite high, but she doesn't have to care if she doesn't sell much at that price because she is claiming her full entitlements.


Once UC kicks in up here she plans to close the business and go back on JSA so she can maintain her entitlements. Will she be able to get a job? Possibly not. She hasn't been in the working for someone else workforce for years, and is getting on for 60.


Will she get sanctioned if she doesn't eventually get a job? It will be interesting to see. I doubt if the DWP would get away with it. She says if they dare she'll get her MP involved.

tomtontom

dktreesea wrote: »

Yes, it may well be expensive, but it's a bit like the painter and decorator who wants to only work if he gets £20 an hour when the going rate is £5 and hour or thereabouts. She prices her stuff quite high, but she doesn't have to care if she doesn't sell much at that price because she is claiming her full entitlements.


Once UC kicks in up here she plans to close the business and go back on JSA so she can maintain her entitlements. Will she be able to get a job? Possibly not. She hasn't been in the working for someone else workforce for years, and is getting on for 60.


Will she get sanctioned if she doesn't eventually get a job? It will be interesting to see. I doubt if the DWP would get away with it. She says if they dare she'll get her MP involved.

Claiming her full entitlements AKA playing the system?

shegirl

She won't have to wait for universal credits. Working Tax Credits are changing and she'll be booted off them when they do,possibly even have money to pay back.

She is playing the system and claiming working tax credits for a hobby...

dktreesea wrote: »

Yes, it may well be expensive, but it's a bit like the painter and decorator who wants to only work if he gets £20 an hour when the going rate is £5 and hour or thereabouts. She prices her stuff quite high, but she doesn't have to care if she doesn't sell much at that price because she is claiming her full entitlements.


Once UC kicks in up here she plans to close the business and go back on JSA so she can maintain her entitlements. Will she be able to get a job? Possibly not. She hasn't been in the working for someone else workforce for years, and is getting on for 60.


Will she get sanctioned if she doesn't eventually get a job? It will be interesting to see. I doubt if the DWP would get away with it. She says if they dare she'll get her MP involved.

dktreesea

tomtontom wrote: »

Claiming her full entitlements AKA playing the system?

To me, she is playing the system, because it would be possible to work a lot more craft and Christmas markets, sell the items online as well and make more stock. Maybe even have some of it in an antiques style place, where you pay a commission of they sell the item for you.


But here where the capital poor part comes in. She can't afford to do that because she doesn't have the money to invest in that much materials, much less the fees for renting a table at several craft events.


This is what the government just don't seem to get. If you enable people without much capital to go into business, it is going to take a lot longer for them to establish their business such that it is giving them a proper wage than it would for someone who was doing the same business - making jewellery - but had, say, £50k behind them. Everything changes, the quality of the materials you can buy, the potential number of outlets, the interest in your items online. Now you are using precious stones and gold, as opposed to semi precious stones and silver. That has the potential to interest art galleries.


Creating a business when you have money behind you, even a bank loan, is a different world to creating a business with a £10 note in your pocket.

shegirl wrote: »

She won't have to wait for universal credits. Working Tax Credits are changing and she'll be booted off them when they do,possibly even have money to pay back.

She is playing the system and claiming working tax credits for a hobby...

Again, it will be interesting to see. If she is deemed to be gainfully employed (and she may be - there are financial incentives for the government to find all self employed people gainfully employed and therefore subject to the MIF, rather than allowing them to go back to claiming as an unemployed person), the DWP could just say to her "You earned £20 a week profit last year. Your work conditionality if you were not self employed is full time, therefore your deemed income is 35 hours * the NMW less something for NI each week. So we are going to pay you as if you were earning the FT NMW."

shegirl

dktreesea wrote: »

To me, she is playing the system, because it would be possible to work a lot more craft and Christmas markets, sell the items online as well and make more stock. Maybe even have some of it in an antiques style place, where you pay a commission of they sell the item for you.


But here where the capital poor part comes in. She can't afford to do that because she doesn't have the money to invest in that much materials, much less the fees for renting a table at several craft events.


This is what the government just don't seem to get. If you enable people without much capital to go into business, it is going to take a lot longer for them to establish their business such that it is giving them a proper wage than it would for someone who was doing the same business - making jewellery - but had, say, £50k behind them. Everything changes, the quality of the materials you can buy, the potential number of outlets, the interest in your items online. Now you are using precious stones and gold, as opposed to semi precious stones and silver. That has the potential to interest art galleries.


Creating a business when you have money behind you, even a bank loan, is a different world to creating a business with a £10 note in your pocket.




Again, it will be interesting to see. If she is deemed to be gainfully employed (and she may be - there are financial incentives for the government to find all self employed people gainfully employed and therefore subject to the MIF, rather than allowing them to go back to claiming as an unemployed person), the DWP could just say to her "You earned £20 a week profit last year. Your work conditionality if you were not self employed is full time, therefore your deemed income is 35 hours * the NMW less something for NI each week. So we are going to pay you as if you were earning the FT NMW."

Sorry, but that's rubbish.

I'm a jewellery designer and goldsmith/silversmith. I hand cut,forge and set everything. I work with gold, sterling silver and all types of proper faceted stones (diamonds,sapphires,rubies,topaz,amethyst etc) not beads. I started my business up with an investment of less than £100 spent on silver and stones (stones I get trade price and they are much much cheaper than you would expect). Made a few pieces, put them online as made to order and bam!

I got (and still often do) paid before the customers orders were made. Most 'jewellery makers' only start making before orders in a few circumstances: 1. They are now established and can afford to do so. 2. So they have the pieces to show,one of each, but operate on a made-to-order basis. 3. When a show is coming up (which a business only uses as a supplement to income and as an additional way of getting their name out there). 4. Because it's just a hobby.

The exception being one off designs. But again, if you spend weeks making jewellery and only try to sell it once a month you aren't exactly operating as a business, but would be for tax purposes if your intention is to sell. For anything else, then no!

OhWow

FBaby wrote: »

Surely the ultimate goal is for workers, all of them, to pay more in than they take out.

The ultimate goal should be to get off benefits.

FBaby

It's well worth it to be self employed at the moment (under HMRC) instead of on JSA (under DWP). HMRC for the most part leave you alone. There are no sanctions.

You mean well worth for the lazy person who wants their benefits without having to justify what they are doing to come of it.

This is what the government just don't seem to get. If you enable people without much capital to go into business, it is going to take a lot longer for them to establish their business such that it is giving them a proper wage than it would for someone who was doing the same business - making jewelry - but had, say, £50k behind them

Why blame the government? Anyone not aiming to play the system would themselves acknowledge that they can't sustain their business because they can't access capital to do so! As I've said before, many people have great potential for becoming successful business people, but don't take that route because of the risk of the initial investment or just because they can't access it. Self-employment just isn't for everyone, and that includes those who can't raise the necessary capital, if required.

dktreesea

shegirl wrote: »

Sorry, but that's rubbish.

I'm a jewellery designer and goldsmith/silversmith. I hand cut,forge and set everything. I work with gold, sterling silver and all types of proper faceted stones (diamonds,sapphires,rubies,topaz,amethyst etc) not beads. I started my business up with an investment of less than £100 spent on silver and stones (stones I get trade price and they are much much cheaper than you would expect). Made a few pieces, put them online as made to order and bam!

I got (and still often do) paid before the customers orders were made. Most 'jewellery makers' only start making before orders in a few circumstances: 1. They are now established and can afford to do so. 2. So they have the pieces to show,one of each, but operate on a made-to-order basis. 3. When a show is coming up (which a business only uses as a supplement to income and as an additional way of getting their name out there). 4. Because it's just a hobby.

The exception being one off designs. But again, if you spend weeks making jewellery and only try to sell it once a month you aren't exactly operating as a business, but would be for tax purposes if your intention is to sell. For anything else, then no!

You misunderstood me. I didn't mean you need to have £50k to set up a jewellery design business. I meant that it's much easier to set up that kind of business if you have some money behind you.


I think too there's a difference between setting up a business with £100 if you are in a position where you have savings and/or other people are willing to support you.


My son's friend is all of 16, makes videos for youtube and has done for three or four years. He works from his bedroom, started off with a camcorder he got for his 13th birthday, and is already making around £100 a month. He's probably never going to be on the dole or need universal credit to support him.


Jewellery makers who rely on craft shows and the like to sell their wares are in a different kind of business to yourself. They have to pay for and make their stock before they go to the show. The lady I was talking about did get commissions from time to time, but not all jewellery makers are professionally trained, went to art school, have spent time working for established jewellers etc.


I agree with you about the price of gemstones. Garnets are a good case in point. Anything from USD$7.50 a carat to USD$2,500 a carat on the site my neighbour showed me.


To me though, you are looking at this from a completely professional standpoint. Presumably you are formally trained and design jewellery as your profession?


Try looking at it instead from a point of view of being unemployed, being sick of going for jobs you know you are never going to get, and being constantly hassled by DWP jobsworths. Self employment and WTC are escape routes. Maybe a person looking at this used to string up beads and make costume jewellery back in their youth, which could be 20 or 30 years ago. They do a bit of research on the internet, find someone who can sell them cheap findings, and they're away. Maybe along the way they do a silver smithing course.