New business no profit first year

AG47

If somebody starts a new business workong say 30 hrs per week, for the sake of benefits do they assume min wage per hour even if you are not earning that much the dirt year?

AG47

When I try it on benefits calculator and put in 30hrs with expected profit of about £100week, it just automatically adjusts to min wage per hour. I'm just not able to make that much profit in the first year

Alice_Holt

Is the new business connected to this thread?
https://forums.moneysavingexpert.com/discussion/5828374/hiring-your-car-out-and-earning-from-it

Are you in a UC area?

AG47

Alice_Holt wrote: »

Is the new business connected to this thread?
https://forums.moneysavingexpert.com/discussion/5828374/hiring-your-car-out-and-earning-from-it

Are you in a UC area?

Yes and yes


Do they assume min wage even if you can't earn that much?

calcotti

You should be given 12 months when only your actual income is used but after 12 months you will be assumed to be earning at least the minimum income floor https://www.citizensadvice.org.uk/benefits/universal-credit/claiming/self-employed/ unless you have other circumstances that exempt you.

You will have to provide DWP with details of income and expenditure every month.

pramsay13

I'm not sure about benefits, but if you're working 30 hours a week for a year and there are no profits you maybe need to rethink the business model.

TELLIT01

pramsay13 wrote: »

I'm not sure about benefits, but if you're working 30 hours a week for a year and there are no profits you maybe need to rethink the business model.

With setup costs it's far from unusual for a business not to make any profit in the first year. In fact businesses can take many years to start turning a profit. That doesn't mean the business model is bad.

skcollobcat10

TELLIT01 wrote: »

With setup costs it's far from unusual for a business not to make any profit in the first year. In fact businesses can take many years to start turning a profit. That doesn't mean the business model is bad.

But it used to be the case not so long ago where people worked as employees full time and then saved a little to set up a self employed business, not be reliant on benefits to support self employment.

parkrunner

skcollobcat10 wrote: »

But it used to be the case not so long ago where people worked as employees full time and then saved a little to set up a self employed business, not be reliant on benefits to support self employment.

Or got a business loan.

AG47

calcotti wrote: »

You should be given 12 months when only your actual income is used but after 12 months you will be assumed to be earning at least the minimum income floor https://www.citizensadvice.org.uk/benefits/universal-credit/claiming/self-employed/ unless you have other circumstances that exempt you.

You will have to provide DWP with details of income and expenditure every month.

Thank you so much. If this is true then that's great

Can somebody confirm if this is true?

AG47

Most businesses these days do not make much profit in the first year.

The problem is however that when somebody applies for benefits like WTC and housing benefit, or UC, they don't believe you that you are working 30hrs and not making any profit.

How does it work? Do you jut tell them the income part and not the big expensis part?