📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Benefits: are business expenses subtracted from income?

lukeylukeluke3
lukeylukeluke3 Posts: 16 Forumite
Ninth Anniversary 10 Posts Name Dropper Combo Breaker
edited 30 June 2016 at 6:04PM in Disability money matters
I'm on ESA support group and would like to move off it even though I'm unfit for work.

I am considering buying and selling items for profit.

Will the full amount I sell an item for be considered 'income' or will the full amount minus the costs (shipping and the amount I purchased the item for (i.e. profit)) be the amount that is taken as 'income'?

Thank you for your advice in advance.

Comments

  • GlasweJen
    GlasweJen Posts: 7,451 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    You'd need to set up as a business or self employed person. Some expenses can be deducted from the business income but that wouldn't necessarily come off your income for benefits purposes.

    You should try getting an appointment with a job centre advisor who can run through figures with you and they also give advice on going self employed.
  • Thank you for your reply.
    GlasweJen wrote: »
    Some expenses can be deducted from the business income but that wouldn't necessarily come off your income for benefits purposes.

    This bit worries me, is there a list anywhere? I've tried google!
  • GlasweJen
    GlasweJen Posts: 7,451 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    HMRC would be a good place to start
  • DomRavioli
    DomRavioli Posts: 3,136 Forumite
    1,000 Posts Combo Breaker
    I'm on ESA support group and would like to move off it even though I'm unfit for work.

    I am considering buying and selling items for profit.

    Will the full amount I sell an item for be considered 'income' or will the full amount minus the costs (shipping and the amount I purchased the item for (i.e. profit)) be the amount that is taken as 'income'?

    Thank you for your advice in advance.

    No - income is all monies coming in. Profit is when you have deducted the costs.
  • DomRavioli wrote: »
    No - income is all monies coming in. Profit is when you have deducted the costs.

    Yes, so let's say that my costs are £30 and someone pays £60 leaving a profit of £30. Will the DWP say that this is £10 over the £20 allowance and deduct £10 from my ESA payment for the week or will they say (ie counting the profit)

    Or will they say that this is £40 over the £20 allowance and deduct £40 from my ESA payment for the week, regardless of how much money is actually in my pocket afterwards?
  • Ames
    Ames Posts: 18,459 Forumite
    edited 30 June 2016 at 9:40PM
    It's only the profit that counts, not the sale price.

    But there are other costs that can be taken into account. For tax purposes, you can include things like some of your heating costs, travel costs relating to the business (so petrol to get to the post office), cost of advertising if it applies. But these costs aren't necessarily allowed by the DWP.

    So you need to do research, speak to an accountant and the Jobcentre as advised above, and keep detailed accounts for both the taxman and the DWP.

    As you're on ESA there's also a possibility of it being permitted work if you do less than 16 hours a week, you can earn up to about £115 a week without it affecting your ESA. The DWP has to agree to it though. Or if you're working over 16 hours a week you might be able to get tax credits, although you'd need a business plan to eventually earn minimum wage.
    Unless I say otherwise 'you' means the general you not you specifically.
  • Ames wrote: »
    It's only the profit that counts, not the sale price.

    But there are other costs that can be taken into account. For tax purposes, you can include things like some of your heating costs, travel costs relating to the business (so petrol to get to the post office), cost of advertising if it applies. But these costs aren't necessarily allowed by the DWP.

    So you need to do research, speak to an accountant and the Jobcentre as advised above, and keep detailed accounts for both the taxman and the DWP.

    As you're on ESA there's also a possibility of it being permitted work if you do less than 16 hours a week, you can earn up to about £115 a week without it affecting your ESA. The DWP has to agree to it though. Or if you're working over 16 hours a week you might be able to get tax credits, although you'd need a business plan to eventually earn minimum wage.

    Thank you. Hopefully the DWP will allow me to try and gradually get off my feet like this rather than forcing me to do an either/or when I'm nowhere near fit for it yet.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.6K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.4K Spending & Discounts
  • 243.6K Work, Benefits & Business
  • 598.3K Mortgages, Homes & Bills
  • 176.7K Life & Family
  • 256.7K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.