This is my situation, what can I claim? (completely new to this)

Entsolen

Hello,

I don't even know where to start. I hope someone can shine some light on me. I've used the benefits calculator on this website and it looks like I may be eligible for universal credit, housing benefit and a council tax deduction, but I wanted to see what people thought of my situation and how accurate that calculation was.

I've been in work and paying taxes/national insurance for the last 3 years.

I am planning on leaving work soon and working on my own business. (I am a software engineer and there will be a lot of work to be done before I see any income, or even have something that would qualify for a business loan).

I live in a one bedroom flat in central London. I have a friend living with me who helps out with the rent, he's got the bedroom, I've got the living room (as a second bedroom).

I will have about £10k in savings to help me with my living expenses, but I suspect it won't go that far in London and won't last me long enough for my project to start taking any kind of substantial shape. So I am looking to get all the help I can get in order to not worry about money too much and be able to concentrate on my work.

What do you guys think of my situation? What kinds of benefits should I be looking into applying?

pollyanna_26

I am not an expert on Universal Credit so hopefully someone will be along to advise you .
I suspect that if you leave well paid regular employment without having an already functioning business with paperwork re profits , tax , turnover etc you are likely to find you are judged to have left work voluntarily and I can't see the benefits you seek being available .
I may be wrong so I hope someone with more knowledge will reply to your post .
polly

Alice_Holt

I think it would be risky to rely on benefits whilst trying to establish your own business.

You need working capital to cover start-up costs and initial expenses, and a resilient and realistic business plan.
Have you done a cash - flow forecast?
Have you got contracts in place?
Etc, etc.

Can you not do it more slowly and continue with paid employment whilst building it up?
You will find that reliance on benefits is a certain route into poverty. UC is £73.10 pw - can you survive on that?
You will be expected to job search for 35 hours - how will you establish your business whilst satisfying your UC job search commitments?
You will, of course, face an initial sanction for giving up paid employment.

It's really not a good idea - if you haven't given considerably more thought to your business model, that will fail too.

ess0two

Entsolen wrote: »

Hello,

I don't even know where to start. I hope someone can shine some light on me. I've used the benefits calculator on this website and it looks like I may be eligible for universal credit, housing benefit and a council tax deduction, but I wanted to see what people thought of my situation and how accurate that calculation was.

I've been in work and paying taxes/national insurance for the last 3 years.

I am planning on leaving work soon and working on my own business. (I am a software engineer and there will be a lot of work to be done before I see any income, or even have something that would qualify for a business loan).

I live in a one bedroom flat in central London. I have a friend living with me who helps out with the rent, he's got the bedroom, I've got the living room (as a second bedroom).

I will have about £10k in savings to help me with my living expenses, but I suspect it won't go that far in London and won't last me long enough for my project to start taking any kind of substantial shape. So I am looking to get all the help I can get in order to not worry about money too much and be able to concentrate on my work.

What do you guys think of my situation? What kinds of benefits should I be looking into applying?

Probably nothing given the circumstances,otherwise we'd all be doing it.

theronstar

I am not so sure that UC is going to behave as harshly with the OP, as the other posters says it might.

I would advise the OP to call UC and ask if they would sanction someone off the cuff.

The OP's credentials for his new business need to be strong if he is going to persuade UC to help him. UC will expect the business to make a 'certain' amount for it to be seen as viable. I am not going to give a figure because this is something that will be determined in the event a UC application is successful.

As the last poster has suggested, we could all set up as self employed and do the minimum amount of work possible, then claim the shortfall in benefits, if there was no obligation on us to grow our business.

If the OP establishes credibility with UC, then they may well waive the need for him to search for alternate work, whilst on UC, in order that he focuses on his business.

In closing, I would reiterate that his business needs to be able to hit the ground running because UC has previously stated that it does not want to prop up underemployment or long term low earning businesses!

Entsolen

Thanks a lot for the replies guys.

pollyanna_26 wrote: »

I am not an expert on Universal Credit so hopefully someone will be along to advise you .
I suspect that if you leave well paid regular employment without having an already functioning business with paperwork re profits , tax , turnover etc you are likely to find you are judged to have left work voluntarily and I can't see the benefits you seek being available .
I may be wrong so I hope someone with more knowledge will reply to your post .
polly

Ah I was suspecting that if I quit voluntarily and don't look for work, I won't be entitled to much. Makes sense.

Alice_Holt wrote: »

I think it would be risky to rely on benefits whilst trying to establish your own business.

You need working capital to cover start-up costs and initial expenses, and a resilient and realistic business plan.
Have you done a cash - flow forecast?
Have you got contracts in place?
Etc, etc.

Can you not do it more slowly and continue with paid employment whilst building it up?
You will find that reliance on benefits is a certain route into poverty. UC is £73.10 pw - can you survive on that?
You will be expected to job search for 35 hours - how will you establish your business whilst satisfying your UC job search commitments?
You will, of course, face an initial sanction for giving up paid employment.

It's really not a good idea - if you haven't given considerably more thought to your business model, that will fail too.

I totally agree with what you're saying. I am diving in the deep end here. However, the decision has already been made. I will be doing this whether I get any help or not with the little savings I have.

As I mentioned in the original post there is still a lot of work to be done in order to see any kind of profit, or have anything substantial to put into a business plan. Staying in work however isn't really an option as It takes away a lot of focus from the product I'm trying to make and most importantly making me really unhappy, as when I'm at work I know I could be working on my own product....

I may have to consider doing freelance gigs in order to raise extra cash if I start struggling.

theronstar wrote: »

I am not so sure that UC is going to behave as harshly with the OP, as the other posters says it might.

I would advise the OP to call UC and ask if they would sanction someone off the cuff.

The OP's credentials for his new business need to be strong if he is going to persuade UC to help him. UC will expect the business to make a 'certain' amount for it to be seen as viable. I am not going to give a figure because this is something that will be determined in the event a UC application is successful.

As the last poster has suggested, we could all set up as self employed and do the minimum amount of work possible, then claim the shortfall in benefits, if there was no obligation on us to grow our business.

If the OP establishes credibility with UC, then they may well waive the need for him to search for alternate work, whilst on UC, in order that he focuses on his business.

In closing, I would reiterate that his business needs to be able to hit the ground running because UC has previously stated that it does not want to prop up underemployment or long term low earning businesses!

Ok that's good to hear. I may give them a call and have a talk.

However as I mentioned I will not have any profits to show at the start, although I'm sure that after 6 months or so of working on my business full time I may be able to show some kind of a decent business plan and small evidence of it being able to make a profit.

Alice_Holt

Entsolen wrote: »

However as I mentioned I will not have any profits to show at the start, although I'm sure that after 6 months or so of working on my business full time I may be able to show evidence of it being able to make a profit.

See: https://www.citizensadvice.org.uk/benefits/universal-credit/before-you-apply/self-employed/
"You'll only be able to apply for Universal Credit as self-employed if all the following apply:
self-employment is your main job
you get regular work from self employment
you can show your work is organised, eg you have invoices and receipts, or accounts
you expect to make a profit"

"After 12 months your Universal Credit payments will be based on the assumption that you're earning a certain amount through self employment, even if you don't actually earn this much. This assumed amount is called the ‘minimum income floor’.
Your minimum income floor will be worked out when you apply for Universal Credit."

Also: https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

"Proving that you are gainfully self-employed?
Your work coach at Jobcentre Plus will ask you about your business and earnings, and you’ll have to provide evidence to support this, things like tax returns, your Unique Tax Reference number from Her Majesty’s Revenue and Customs (HMRC), your business plan, customer lists, or marketing materials, are all acceptable....."

It's unrealistic to assume that you will able to receive UC whilst working on a project.