Receiving benefits but want to go self employed

[WDeranged]

I've been receiving Incapacity and Housing benefit for quite a few years due to various mental health issues but now I have a decent chance to start up a home business repairing computers and I'm worried about losing all my support if things don't work out.

 

I've spoken to Incapacity Benefits and they told me I can apply for Permitted Work which would allow me to work up to 16 hours a week and earn £101, anything over £101 will be deducted from my benefits. I also got in touch with Housing Benefit and they told me that as long as I sign up for Permitted Work and keep them updated with my monthly earnings I would be able to keep a certain amount of the benefit. If the system really works this way then I think I could make a go of this, I'm just staggeringly anxious about it all

 

I still need to ring the Tax Office to ask for advice, I'm utterly clueless about tax but I'm told that at this level I won't have to pay anything and I will need to apply for Self Certification.

 

If anyone has been through this sort of thing I'd greatly appreciate some guidance, I feel a bit like I'm jumping without a parachute.

Edited February 10, 2014 by WDeranged

[WDeranged]

Did I put this in the wrong section?

[Guest]

I am no expert in this area, hopefully someone with knowledge of it will come and comment.

 

What I can say is that some who have gone down the road of self employment have regretted it, as unless there is a guaranteed regular income it can all go wrong. some on JSA have found this to be the case as there is very little support once you got it alone. Having mental health issues myself (bipolar) for me the stress of not earning some weeks would send me on a downward spiral. I guess it depends on how much work and how often you believe it will be there is the main issue. The permitted work would be the safest way to try it out I guess? at least that way if it doesn't pan out then you haven't lost your entitlement.

 

Good luck in whatever you decide.

[WDeranged]

Yeah I'm definitely scared of jumping without a net, if I were to suddenly drop all my benefits I wouldn't be able to keep even a small home business going so it'd be a huge relief if I could keep at least some of it while testing the water.

 

Thanks for the reply, I'll keep my fingers crossed that someone with experience in these matters comes along

[happyhelper]

Hi OP.

 

Are you certain that you are still on Incapacity Benefit. I ask because all IB claimants are being re-assessed for migration over to Employment Support Allowance (ESA). The migration was due to be concluded by March 2014, but the DWP and ATOS are so inept that the end date may have been extended.

 

Anyhow, as far as I am aware there is a DWP initiative which allows claimants on long term ESA or IB who wish to give self employment a try a grant of say £50 per week over what i recollect to be a 12 month period. Discuss it with a Jobcentre plus advisor. They are normally very very helpful and considerate. As a transition you may want to try permitted work, whilst keeping IB (or ESA) , and if all goes swimmingly well then you may wish to consider applying for the above referenced "self employment start up initiative".

 

The tax situation is in reality quite straightforward. If you can call into a CAB or a local tax office and obtain guidance.

 

Best of luck.

[**Margaret**]

:WDeranged:

 

Permitted work whilst in receipt of incapacity benefit/employment n support allowance is very different to self employment from jobseekers. And yes, the system that's been described to you works. The only proviso that I'd suggest you look at; is whether the work you're intending to do conflicts with your eligibility for incapacity benefit, and in due course your eligibility for employment n support.

 

http://www.lancashirepolfed.org.uk/what/incapacity2.pdf

 

Housing benefit and council tax reduction aren't affected by permitted work, if you've completed a PW1 form. Available from your benefit delivery centre, it's one of Jobcentreplus simpler forms. You can try permitted work for up to a year without it affecting your existing entitlement to benefits, unless your award's topped up by income support.

 

A guide to permitted work from;

 

http://www.disabilityrightsuk.org/work-people-living-disability-or-health-conditions

 

Sorry, I can't help with the tax query, but you're welcome to post in the HMRC sub forum.

 

Good luck, Margaret.

[WDeranged]

Thanks for the excellent replies, I'll read up and post some questions if I have any

[Farbramble]

You might also look into the disabled element of Working Tax Credit.

 

Usually for a single person, you have to work at least 30 hrs pw to claim. If disabled, I think it's only 16 hrs pw.

 

As mentioned, there's an initiative for those on disability benefits to receive financial help (approx £50 pw for 1 year). Not sure, but you might be able to get both monies - enough to keep one afloat.

[**Margaret**]

:Spot the Difference:

 

Whilst all the contributions to this thread are welcome, it's important to note differences between the myriad of Jobcentreplus schemes to help claimants move off income replacement benefits for disability and into employment.

 

The original enquirer is in receipt of incapacity benefit which means s/he can do some 'permitted work', without it affecting existing entitlement to benefits unless earnings are in excess of £100 ish per week. As can claimants in receipt of contributions flavoured or income flavoured employment n support, or severe disablement allowance. Claimants in receipt of income support on grounds of disability can do 'permitted work' but earnings in excess of £20 per week are counted as income.

 

The other schemes in this thread; working tax credits and (I presume) new enterprise allowance are considered to be in work benefits. Consequently, claims for income replacement benefits on grounds of disability have to be closed before they can be accessed.

 

https://www.gov.uk/new-enterprise-allowance

 

http://www.hmrc.gov.uk/taxcredits/tc956.pdf

 

Margaret.

[jadeybags]

I'm self employed. It sucks to be honest lol I can't wait to find employed work. When Universal credit kicks in we need to be earning minimum wage based on 35 hours a week I think it is. That wont be happening for me. I can work til midnight & not touch minimum wage. It works for me at the moment due to tax credits, but as I say, once UC comes in, it'll be a non starter.

I miss the regular income as well. Some weeks I can make more than £100 but some weeks less. All my benefits are based on £100 a week (i'm not on any disability ones though)

[andydd]

Im currently self-employed and doing ok, but I waited a while before taking the plunge and aiming to be self employed permanantly, i.e going from contract to contract.

 

Clearly there is a risk and in theory you cant just sign on and claim JSA when things go slow, however you can end your self employed status and then sign on but it is a bit of a grey area.

[impecunious]

After claiming JSA for 10 months, I became self-employed and now have my own new small business. I work 7 days a week, sometimes 12 hours a day and I haven't been able to draw a wage since I started five months ago as my overheads exceed my weekly takings. I've now been forced to make a claim for WTC and if that's approved, my income will still be approximately £20 a week less than former JSA weekly payment. It's lamentable and so ironic.

 

 

And I thought work was meant to pay. If you're ever thinking of going self-employed, especially if you are in receipt of ESA or similar, and have disabilities ... please, please, please think twice. It's difficult enough when you're intelligent, credential, experienced, able-bodied and hard-working.

 

 

Although I love my new business with a passion and hated being on benefits, at least then I could eat regularly, buy food, cover basic bills and could afford to heat the house and have constant hot water. Those are all now luxuries I can ill afford. Now I have my self-respect but, sadly, that doesn't put food on the table.

 

 

 

 

 

 

(Still) Impecunious!