Claiming universal credit when setting up my own business

Simon1867

Hi all!

I was wondering if someone could help me with the below please:

I am currently employed, however I am looking to resign to set up my own business. I have funding for this business, so I will be able to provide a realistic business plan etc to universal credit.

My questions are:

1. If I resign from my job and then set the company up, or as I'm setting the company up - will I be able to claim UC straight away, as long as I can prove that I have a self-employed business (albeit a brand new one), and that I have a concrete plan etc? Obviously I will be masking it clear that self-employed will be my only income.
2. Will UC take issue with the fact that I've quit my job, even though it's for the purposes of setting up my own business?
3. Will the fact that the company is brand new, and therefore has no prior turnover or income be an issue with me claiming UC?

It's worth noting that I've never claimed UC while setting up a business before. I have claimed UC previously, and I have earned self-employed income before, but in seperate tax years. I filed my tax return in the same financial year as I was claiming UC, however the period was for a previous tax year, and I was out of work at the point I was claiming UC.

Thanks in advance for your help!

Simon

huckster

What is stopping you setting up company while still employed?

What about asking current employers about part-time or flexible working? So you have some time to assist with pursuing self-employed work.

After setting up company, what are your current expectations about earning any money?

Nothing stopping you claiming UC after leaving employment and registering as self-employed under UC. But UC will require evidence you have a business you are developing, which you have a realistic  opportunity to earn a living from. So it won't be just a business plan, but documents showing your attempts to secure income. 

I don't think a Job Centre Work Coach would be satisfied you leaving a well paid job and only having a business plan with no evidence of any actions to achieve receiving a self-employed income.

NedS

There is also the possibility you could be sanctioned for leaving a job voluntarily. This is a 3 month sanction that runs from the date you left your employment, so you may not be eligible to receive any UC for the first 3 months.

As @huckster suggests, it may be wiser to try to get the business started alongside your existing employment, reducing your hours or leaving once it has started to generate sufficient profit to support you.

TimeLord1

Universal Credit can provide a "start-up period" for those who are self-employed, allowing them to focus on growing their business for up to 12 months without the minimum income floor applying. 



https://www.gov.uk/business-support-service

huckster

Being found gainfully self employed and given a 12 month start up period, is a decision  for the Job Centre Work Coach at a Gateway Intervention appointment. Enough evidence has to be supplied to convince the Work Coach that there is a business that can be developed to provide a living wage e.g. to achieve at least 35 hours per week National Minimum Wage within 12 months.

It cannot just be a business plan. 

To be given a 12 month start up period, cannot have had a previous start up period under UC for same business type within last 5 years