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  • FIRST POST
    • crypta
    • By crypta 10th Sep 17, 5:25 PM
    • 7Posts
    • 0Thanks
    crypta
    DLA, ESA, HB, CT, Savings, Becoming Self Employed..
    • #1
    • 10th Sep 17, 5:25 PM
    DLA, ESA, HB, CT, Savings, Becoming Self Employed.. 10th Sep 17 at 5:25 PM
    Hi,

    I am currently on income based ESA, HB, and CT due to health problems.

    I am considering leaving these and trying to setup my own business.

    The main reason for this direction is due to receiving an inheritance in the very near future, and being faced with 2 options.

    Use the money to live and and reclaim later when it runs out (due to health problems)
    Setup a business and try to support myself and provide employment around my health conditions

    1) Is there any support ("grace period") when you stop your claim(s), or do benefits stop straight away?

    If I sign off from these and start my own business, paying myself 400 per month,

    2) Can I claim:

    Tax credits for low income
    Housing Benefit
    Council Tax Benefit

    My savings will be 0.

    2) Does the DWP means test the balance sheet of the business?

    Thanks
    Last edited by crypta; 10-09-2017 at 8:04 PM. Reason: typo
Page 1
    • poppy12345
    • By poppy12345 10th Sep 17, 6:43 PM
    • 2,936 Posts
    • 2,899 Thanks
    poppy12345
    • #2
    • 10th Sep 17, 6:43 PM
    • #2
    • 10th Sep 17, 6:43 PM
    There's no "grace period" once you get the money your means tested benefits will stop.
    • crypta
    • By crypta 10th Sep 17, 7:44 PM
    • 7 Posts
    • 0 Thanks
    crypta
    • #3
    • 10th Sep 17, 7:44 PM
    • #3
    • 10th Sep 17, 7:44 PM
    Poppy, thank you for your answer.

    The reason I asked is because if you get a job your benefits or allowances are still paid for a short amount of time, even you are being paid from day one of working.

    In my case, if I sign off before I get the money then I have no savings; hence why I asked about the grace period.

    The reason I asked the other questions is because as a new business obviously I will not be able to pay myself large amounts without putting the business at risk.

    --

    Teddy; No one is asking for freebies.

    I am willing to risk my money by setting up a business so that I can do specific work around my mental illness, and in the long term not have to claim any monies.

    In terms of tax paying for benefits or allowances; yes I have paid far more income tax, NI, corporation tax, dividend tax, and VAT, than I have or ever will claim in allowances/benefits.
    Last edited by crypta; 10-09-2017 at 8:06 PM.
    • teddysmum
    • By teddysmum 10th Sep 17, 8:01 PM
    • 9,057 Posts
    • 5,396 Thanks
    teddysmum
    • #4
    • 10th Sep 17, 8:01 PM
    • #4
    • 10th Sep 17, 8:01 PM

    Teddy; When you learn to read, and remove the chip from your shoulder, please come back.

    No one is asking for freebies.

    I am willing to risk my money by setting up a business so that I can do specific work around my mental illness, and not have to claim any monies.

    And in terms of tax paying for benefits; yes I have paid far more income tax, NI, corporation tax, dividend tax, and VAT, than I have or ever will claim in allowances.

    Just to be clear, people with health problem do not get benefits, we get allowances as we cannot do most of the jobs that others can.
    Originally posted by crypta


    I'm afraid that you are the one who has a chip and can't read, as my name is not Teddy.


    Many, many people pay more in taxes etc than they ever get in allowances, as, otherwise, the system would not work.


    Yes (some ) people with a health problems get DLA or PIP , which are allowances ,as is stated in the name of the former and very few object to these.


    However, other payments, like housing/council tax benefit, are certainly benefits (clue in the name) and are paid whether someone has a health problem or not.


    These benefits are means tested and so depend on people's assets and income, so if you have sufficient of these you are not eligible to claim and anyone caught cheating the system ,deserves to be punished.
    • IAmWales
    • By IAmWales 10th Sep 17, 8:13 PM
    • 1,860 Posts
    • 3,927 Thanks
    IAmWales
    • #5
    • 10th Sep 17, 8:13 PM
    • #5
    • 10th Sep 17, 8:13 PM
    Have you sought advice on your business plan?

    How much are you planning to invest in this business, and how long will it take for the business to repay the loan?

    You can use your inheritance to set up the business, but that spending needs to be reasonable. Investing (for instance) 20K in a business that will only ever make 100 a week is not reasonable. On the other hand a 20K investment in a business that has a realistic plan for growth that will make them self sufficient and allow them to repay the loan would be reasonable.
    • crypta
    • By crypta 10th Sep 17, 8:13 PM
    • 7 Posts
    • 0 Thanks
    crypta
    • #6
    • 10th Sep 17, 8:13 PM
    • #6
    • 10th Sep 17, 8:13 PM
    Wales - Thank you for you reply.

    In terms of a Directors loan, from myself to the Business, it is hard to work out a break even point.

    In truth a business plan is difficult, as we have no normal product to sell, and no normal customers to sell to. Therefore there is also no real sale's approach or marketing mix in general. Even trying to do a profit and loss is impossible as it is all down to market movements which cannot be predicted, even on past history.

    I agree that normal investment would only bring in 1-5% p/a at most.

    However what I intend to do is actively trade various equities, mainly crypto-currencies which have massive movements in value, but also later some tech shares.
    Last edited by crypta; 10-09-2017 at 9:14 PM.
    • WillowCat
    • By WillowCat 10th Sep 17, 9:35 PM
    • 815 Posts
    • 992 Thanks
    WillowCat
    • #7
    • 10th Sep 17, 9:35 PM
    • #7
    • 10th Sep 17, 9:35 PM
    I was going to suggest that you would potentially be able to claim WTC and this isn't means tested (only the income generated by your capital is taken into account).

    However if your 'work' is managing your investments this would not qualify as work for tax credits purposes.

    Even if you put your inheritance in a Ltd company, the company itself would be valued at your inheritance amount, and as you are the shareholder ergo you still have the value of that capital.
    • crypta
    • By crypta 14th Sep 17, 1:34 PM
    • 7 Posts
    • 0 Thanks
    crypta
    • #8
    • 14th Sep 17, 1:34 PM
    • #8
    • 14th Sep 17, 1:34 PM
    Thanks for the information, its much appreciated.

    Sorry about the delay.
    • Tomsdottir
    • By Tomsdottir 15th Sep 17, 2:08 AM
    • 12 Posts
    • 8 Thanks
    Tomsdottir
    • #9
    • 15th Sep 17, 2:08 AM
    • #9
    • 15th Sep 17, 2:08 AM
    Hallo there

    Apologies if you already know this, but for means tested benefits, the upper capital limit is 16,000. So if you have 16,000.01, you do not qualify for HB and CTR. The first 6,000 of your capital is ignored. Capital of between 6,000.01 and 16,000 is deemed to generated"tariff" income of 1 a week for every 250 or part thereof between those figures. So, for example, if your savings were 6,001, you would be treated as though you earned 1 a week from those savings. I don't know about you, but I'd like to find a bank that paid out interest rates like that.
    In terms out how you spend the money, you can be treated as though you still possess money which you spend for the purposes of claiming benefit. So for example, if you bought me a diamond tennis bracelet with your inheritance just so that you could claim HB (I've always wanted a diamond tennis bracelet) you would be treated as though you still had the money. This is a common ground for appeals, as you can imagine (not the diamond tennis bracelet bit, though).

    Incidentally, I agree with you completely about not having to defend asking for advice. I'm only new here, so I read Martin's guidance before I started posting. I'm going to quote from his thread "It's about helping people to get their entitlement! Not about policy!" which heads the list of threads. "This board is here for help and support for those on or looking to claim benefits, not for judgement. ... to discuss the benefits system itself and issues around it, the appropriate place isn't here but the Discussion time Board and even there, please remember courtesy and not to make it personal about anyone. This site's prime purpose it to help people with their money and I will always act to protect that." Later on he says " The key point is this: "Want to discuss the benefits system? Go to the discussion board". This board is for helping people get what they are entitled to.

    So, these general rules will continue to apply, and the forum team will be taking action against any breaches of these over the next few weeks...

    ... This board is for people to work out what they are entitled to, and we hope other forummers will continue to provide invaluable help in this.

    However, anyone disrupting threads in this board with their views on the benefits system, making impolite comments about benefits claimants, or taking part in arguments (whether or not you started them) will have action taken against them. "

    I've checked out how to report. It's very easy to do, and helps ensure the forum is a safe, useful and enjoyable space for all who mean well.

    Last edited by Tomsdottir; 15-09-2017 at 3:51 AM.
    • crypta
    • By crypta 1st Dec 17, 7:36 PM
    • 7 Posts
    • 0 Thanks
    crypta
    Thank you Tom, I completely agree.

    Most decent people in life want to reduce, not evade costs, be it tax or 'income' reductions.

    In the end I just bought shares, signed off all 'benefits', and now few months later have reapplied.

    Rather than not buying the things I wanted, I just spent what I felt like; if they want to penalise me for this so be it. It just means my savings will reduce even further for when eventually I do get another claim approved.

    It seems illogical that someone on, say Contribution ESA, who has 100000000000000 billion in the bank, does not even get means tested and can continue to get full benefits. Whereas someone on Income related can not have a penny over 16K.

    A very strange situation..

    Apologies for the delay I have only just seen your reply!
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