Self employed/too ill to work what do I do?

TimeLord1

Your household is in a critical financial deficit (£2,500 overdrawn, mortgage arrears, £13,000 on a credit card, and only £1,000 left in savings). Because your husband works 40 hours a week in the emergency services, you need immediate, professional debt intervention:

Contact StepChange Debt Charity (0800 138 1111): They are a free, confidential debt advice charity. Tell them you are in mortgage arrears and overdrawn. They can help broker breathing space or debt management plans with your creditors (including your credit card company) to freeze interest and halt aggressive collection.

Do not ignore the mortgage arrears. Lenders have a regulatory obligation under the Financial Conduct Authority (FCA) to treat customers in payment difficulties with forbearance (e.g., temporarily pausing payments or capitalizing arrears). Let them know your health and care circumstances.

I doubt it your husband receives a 40-hour emergency services wage almost certainly exceeds this weekly earnings limit, he will not qualify to be paid Carer's Allowance.

Since you already receive PIP at the highest rate, your disability is officially recognized. However, your household income structure needs urgent review:

Universal Credit (UC): Because your business profit has dropped and your husband's income from a 40-hour emergency services week will be weighed against household needs, you should check your entitlement to Universal Credit via a calculator (like Entitledto or Turn2us).

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Grumpy_chap

£90k in stock and materials is an unfathomable amount

around £70k in materials and £20k in equipment

If I understand the OP's business it was some kind of arts and crafts venture, making ornaments and such like or, possibly, clothing. Perhaps a blend of knick knacks and clothing items.

It seems important to really understand the true value of what makes up the £70k materials and £20k equipment.

Let's consider the equipment first. The OP does not seem to have mentioned any particularly expensive equipment - the posts mentioned selling handmade items online, so a laptop, printer etc. Plus sewing and glue gun and iron. So, is this £20k of equipment in total at cost price over the years?

What is true value of that equipment today? As second-hand product?

What is the book value of that equipment today? After the business depreciation has been applied?

Now, the materials. £70k buys a truly phenomenal quantity of fabrics and arts'n'craft raw materials.

Is this £70k the cost price of the materials or the OP's assessment of what the materials have as value once created into sellable products?

Where is £70k of fabrics and such like stored? It must take a reasonable amount of space.

What is the value of the materials if sold "as is"?

Muttleythefrog

I think you've received good advice for a complex situation. Benefit check to see if entitlement… but you need to seriously evaluate this lifestyle. That number of cats (unless a typo) and the responsibilities on your partner sounds completely unsustainable and set to get greater. Top to bottom look at how you move into a next phase of life as a family unit I think.

NedS

@whizzywoo wrote:

Several years ago when I got to retirement age I stopped my self employed business as I was too ill to carry on with it. I claimed Pension Credit and the remaining assets of the business were classed as part of my Capital.

This would also be an issue for any potential UC claim. Business assets can be disregarded if the claimant is found to be gainfully self employed and they are deemed essential for the ongoing running of the business. That outcome seems unlikely in this case, so they would be treated as capital and, combined with partner's income, would likely preclude any possibility of making a claim for UC.

If they were found to be gainfully self employed and the assets disregarded, then MIF (or actual) income combined with partner's income would again make any entitlement to UC unlikely.

soolin

https://forums.moneysavingexpert.com/discussion/comment/82180168#Comment_82180168

You make some valid points and it is worth the OP seriously evaluating the 'value' of the items contained in that 90K rather than the cost. I have in the past 'bought' a small business - or rather the stock and some equipment (nothing complicated like goodwill or a name though - just physical stuff). I paid around 15p in the pound for it, so it was estimated at £2000 spend and I paid £300 and immediately started to batch and resell to make a profit. I have much more recently bought a complete stock from a seller who had a small business, and that time as the market was good had to pay nearer 20p in the pound .

soolin

https://forums.moneysavingexpert.com/discussion/comment/82180258#Comment_82180258

I seriously doubt the OP will come back to this thread which is a shame, I do hope though they read some of the advice given and have a good discussion with their OH about the future.

I agree that the business stock needs to be addressed as my post , which crossed with yours, suggested that the 90K being held may be nowhere near the value - and it would be a shame for the OP to lose out believing and declaring the 90K without seriously exploring the true 'value' if it was all sold on .

NedS

https://forums.moneysavingexpert.com/discussion/comment/82180268#Comment_82180268

Indeed, your first hand experience in such matters was useful to read, although I suspect many small business owners will find it difficult to accept how little their 'business' and assets are really worth.

whizzywoo

https://forums.moneysavingexpert.com/discussion/comment/82180270#Comment_82180270

In my dim and distant past I was an accountant and actually prepared accounts for many a small self employed business. They did indeed over value their stock and equipment if the time came to sell up.

soolin

https://forums.moneysavingexpert.com/discussion/comment/82180270#Comment_82180270

I suspect you are right - like whizzywoo above I was also an accountant in a previous life and it was always difficult trying to speak to clients about the sometimes huge difference between cost and value . Even now with that background I look at my storage and see the 'cost' of what I bought as representing 'money' However I know if I decide to go cold turkey and just sell up, as I did contemplate last year- taking that stock to auction and taking into account fees etc, I am unlikely to get more than 20p in the pound, if that . The value in my stock is that it continues to sell for more than I paid, I'd seriously reduce the value though selling off in bulk to someone who is prepared to put the work into selling it individually.

My concern is that OP will get stuck on that £90K 'cost' and talk themselves out of being in a position to receive the assistance via benefits to which they might be entitled.

TimeLord1

I think if they talk to a debt advisor, they'll let them know if the business is financially possible to keep going. The same with liquidation, they'd look to see if selling it is worthwhile or the value of the stock against a future loan to keep it going. Overall, to most debt collectors, it will be massively reduced in value.