trying to come off of benefits

[startinganew123]

hello,

i am currently on universal credit and part time employed. I have been given the opportunity to set up my own e-commerce store and have a good relationship with a brand. this is a good opportunity for me to up my income so i don't rely on universal credit to top up my income.

so my dilemma is, i havent set up yet. however i am getting close. i assume i need to set up for self employed self assessment? but will that automatically flag up on my universal credit claim? im not expecting sales straight away as it will take time. so i will still need my universal credit, without it i will struggle with rent etc. plus i have children to think about. i will still be working part time as it fits in with my kids, but this would give me a bigger income with the view of leaving universal credit in the future.

can anyone give some advice and guidance as i would like to do this properly and legally but without ending in debt. or is it just not worth it?

i want to come off of universal credit and am only on it due to losing my job due to covid 19 and luckily getting a part time job that fits around the lack of childcare we have at the moment. dh is a shift worker and looks after the kids when i am at work.

i have always wanted to do this but cant loose my income and then only potentially earning £20 at the end of it if it doesn't succeed if you catch my drift.

that was really long winded so i apologise but very stressed and trying to improve all our lives,

Can you create a limited company? That allows your company to earn the money. It doesn’t become yours until you pay yourself an income, which you could do after, say, six months, or if you pay yourself a dividend at the end of the financial year.

It means you can try to establish your company, and see what profit it might generate before giving up your UC claim.

but i would have to be a director and then i would not be allowed universal credit i thought? thanks you for replying

Isn't your universal credit tapered away as your income increases, so you'll always keep some of it, and won't lose it all until your income goes up by quite a bit, by which time, you have the income instead?

However, I have been given the opportunity to set up my own e-commerce store and have a good relationship with a brand sounds suspiciously like a MLM (eg Avon, Kleeneze, Herbalife, Forever Living etc) and if it is, I'd steer well clear, as almost no-one makes decent money from them and many alienate friends and family by pushing sales on them all the time.

thank you, but i will double check.no its not an mlm. my friend has her own brand that she has created and i am going to sell her products on my website as an online store.

and im not looking to sell to family and friends.

Do you have experience of running an ecommerce store?

Is it illegal to wait and see whether it picks up then register for self assessment? As you might make no money at all.

@doadeer thats what i am trying to work out before i do anything! yes i know how to do it, as i used to run one for someone else. im more worried about my financial and income, i have done it as a job before but not for myself

bump

Message your UC work coach and ask about claiming New Enterprise Allowance and for them to explain how your income and expenses would work when you launch.

I’m sure I’d read about some sort of grace period (a year?) before they adjust the UC completely. Go on the webpage and read through the FAQs. I’ve recently decided now is not the time to start up a business alongside my part time work as I’m not sure it would equal the benefits I get just now by that time (it’s very up/down payment wise) - the joys of having kids to feed. :-/ soon, I’ll get there!

my friend has her own brand that she has created and i am going to sell her products on my website as an online store.

This would be ringing all kinds of alarm bells for me, apart at all from your UC question.

How will this work? It's her product - what are you bringing to the table other than running a website for her? How will you make money, exactly? Is she paying you, or you are buying the products and selling them on?

Either way - no. I wouldn't.

Thank you all for the information. I'm not worrying about how to run the business. İ have experience. But I appreciate everyone's concerns. Before lock down i was quite successful. I'm now in a position to think about doing my own. For those who really want to know i would be drop shipping her products. İ know what I'm doing. I'm just worried about doing things properly without getting into trouble. I'm not expecting to make money for the first year and it will take time. But i still have kids to feed. I'm aware of the risks etc. And to be honest it may be more like a hobby for the first year or 2. But still want to do things properly. İf it means i will be financially worse off due to UC then i will forget about it. That's the only risk i am worrying about.

I'm sure you can add your self employment to your uc claim and each month it will ask you your earnings so if they go up and down so will your UC

Ah that's perfect. İ can never get through to my work coach as I'm now employed albeit part time they tend to disappear! Thanks all will call them tomorrow I think and will look at the new enterprise allowance. Thanks again everyone

I think when lockdown began they did away with the minimum floor income where you were expected to earn the min wage x 35 hrs If you were self employed.
This rule was to stop people doing the min amount of hrs to claim the max amount of benefit from UC as was often the case with Tax Credits

However I expect it to begin again later this year

But from my memory pre lockdown you did get a year to see if the business is profitable before they stop UC benefit

Ah wonderful thank you

Although completely separate to UC, on which I can't advise, you can turnover £1000 self employed each tax year without registering as self employed. This is turnover, not profit, so you can't deduct any expenses.

Thanks Delilah. Does it still need to be registered somewhere, don't know the technical term

You also get 3 months to register a new business with hmrc

It doesn't need to be registered anywhere. Obviously you still need to comply with trading laws like the consumer contracts regulations. Once you have turned over £1000 you register as a sole trader with HMRC. Keep a record of all of your income and expenditure because if you hit that before 6th April 2021 you'll need it for your tax return. Perhaps you are thinking of Companies House registration which is if you want to be a limited company. If you are not sure whether to do this, a quick chat with an accountant (usually free) will help you decide.

Thanks delilah. No I don't want to go down a company route just yet. Maybe in the future if this works out or if I get involved in something else. Thanks for all the information really helpful! I will set up and speak to UC but I'm not thinking I will even touch a thousand in the first year. I'm just starting up prepared for when my youngest starts school so I'm already up and running and then can put my energy into expanding

Message your UC work coach and ask about claiming New Enterprise Allowance and for them to explain how your income and expenses would work when you launch.
I agree with this - I had support starting up self employment

thanks should be doing. i will message them,

thanks again everyone