to think that if you need state support because your self employed income is low, then you haven't got a viable business

[trillianandrandom]

Linked to a Guardian article. Self employed people can get universal credit if their incomes are low.

Which I can see is needed if you are do 'gigs' and your earnings fluctuate.

But in this example, I don't think this person has a viable business.

www.theguardian.com/society/2018/mar/25/universal-credit-self-employed-benefit-slash

"a self-employed children’s entertainer in Norfolk, said she would be affected by the new system. “Most of my money I earned in June, July, August and then December,” she said. “I have a small amount of money coming in this month, but not paid bookings this time of the year. If I earn under the minimum income floor, I don’t get any extra help. It’s not just me. It’s gardeners, childminders. This is thousands of people. If I had to go to an employer, I would probably end up becoming very anxious and depressed and eventually become physically sick with it. I could see a situation in which I would be signed off, on long-term sickness benefits, living on the bare minimum; I would lose my private rented house.”"

And I can see that - however, what is to stop anyone just doing some self employed business a few times a year and then getting Universal Credit to top it up?

I do think it's a mess with all the self employed people there, all the gig economy workers and people just earning a bit of money on the side.

But how do you balance it out?

Agreed

Same for full time workers- if you need state help then you dont have a viable job- get a better one...

Araiwa that’s all well and good but I’m pretty sure you’d complain if teaching assistants, admin staff, shop workers etc all left their jobs overnight

Araiwa you mean get one of those fabulous, well paid jobs with understanding employers? I mean, yeah! There's thousands of them available, even for unskilled workers 🙄

Op, of course they should be able to claim universal credit, businesses don't generate a good income overnight and people still need to support themselves and their families when starting up and we need small businesses (trades etc).

Of course the logic fail there (full time workers) is that who would do the job in that case? Who would do the low paid job, which perhaps shouldn't be so low paid that no-one can survive on the money?

If I start a business and in year 1, I make £5000 and in year 2, I make £4000 but my wage works out at less than the minimum wage because of the hours I put in, is it right that I get support?

Or am I charging too low?

So who is going to serve you in the the shops Araiwa?
Who is going to care for the elderly in care homes or people with disabilities who need carers
Who is going to clean hospitals, schools etc
Think you may have won the prize for the most stupid comment of the day

You would have an appointment with a specialist self employment advisor who looks at your marketing, clients, what you’re doing to expand your business. It all adds in to whether you are deemed gainfully self employed. There are schemes that can support self employment, provide a grant for marketing etc but depends on how new the business is.

They changed the tax credits to be the same didn't they? With some allowances for just starting out. I agree with it in principle.

Under the old system, it distorted the market as people who were self employed and claiming tax credits could undercut those who couldn't claim.

Would you really expect someone like that understand though. She doesn't even have the economic understanding to see that her 'business' isn't a sufficient source of employment for her. Do you really expect her to understand that money for tax credits doesn't grown on trees? Many people don't understand where the money comes from. That is why they are so ridiculously entitled and expect the government to subsidise their half arsed attempts at self employment.

Op, of course they should be able to claim universal credit, businesses don't generate a good income overnight and people still need to support themselves and their families when starting up and we need small businesses

How do you stop people exploiting that by running business that clearly aren't viable - but they get state support to ensure that they can survive?

Depends on your definition of viable I guess.

I understand people's issues with the many people who are self-employed and effectively also underemployed, we do have an efficiency problem in the UK, but I'm also not sure what use effectively forcing them out of it is going to be. It was something that was tacitly encouraged for years to massage the unemployment stats. We are not, after all, in a position where our economy strictly requires every able bodied adult to be engaged in labour full time.

Agreed, if they are making their money over only a few months a year, then what are they doing for the other 8 months? They need to work more hours during those months.

I get what your saying but the DWP in be past have encouraged people on JSA to start being self employed and claim ‘in work’ benefits as it makes their unemployment figures look better.

So...some work is genuinely seasonal - gardening is an obvious one but anyone who works in the holiday industry, for example, is also affected. We still need people to do seasonal work. The trick is developing a second income stream, I guess, but rather than slagging people off, remember the bigger picture next time you struggle to get a tradesperson to do a small job for you...

I get what your saying but the DWP in be past have encouraged people on JSA to start being self employed and claim ‘in work’ benefits as it makes their unemployment figures look better

I know - it's a mess.

..you don't have a viable business

Or you do and you're fiddling the system. Let me say up front that I know that the vast majority of people don't, and I would rather pay for the few that do than reduce help for those that need it. However I know of at least one person with their own very successful company who was advised by their accountant to pay themselves only minimum wage and to claim top up credits from the government. She gets the profits from the company through a different route (God knows what - I can't imagine she's not in breach of some condition somewhere) has a huge mortgage free house, changes her car every year and boasts about it.

The trick is developing a second income stream, I guess, but rather than slagging people off, remember the bigger picture next time you struggle to get a tradesperson to do a small job for you

It's obvious that certain people need to charge more per hour because their income fluctuates.

Pretty sure there is a test period of a year where you're allowed to earn under the NMW level, but after that I think it's fair that you're expected to either increase your SE earnings or seek alternative employment. I can't imagine a children's entertainer doing 30 hours a week, it's mainly weekend work and there's only so much preparation you can do beforehand.

The problem isn't those genuinely doing their best to get a business off the ground, it's those that continue to claim for years and make up their hours with "admin" (few numbers in an Excel sheet), "marketing" (nattering on Facebook) and so on.

It's obvious that certain people need to charge more per hour because their income fluctuates.

You can only charge what people will pay.

If a shop can’t pay someone a wage that is enough to live on then they aren’t running a viable business either.

It’s a year. It’s called a start up period. After that if you’re not earning the Minimum Income Floor (min wage x 35 x 52 /12) you have a decision to make. Fold the business and keep looking for paid work whilst receiving UC or UC will assume you’re making the MIF and you’ll only receive benefit entitlement above that.

On one hand yes you can only charge what people will pay- but to turn that around people have to pay what Is charged for what they want.
They may then choose to go without which further proves it’s not a viable business

If a shop can’t pay someone a wage that is enough to live on then they aren’t running a viable business either

That's true as well.

If a shop can’t pay someone a wage that is enough to live on then they aren’t running a viable business either

The requirements are to earn an equivalent to minimum wage. Shops also have to pay employees minimum wage so in that respect they are equal.

What about growing businesses? I get WTC and CTC, as do a lot of people who are on a low income, both employed and self employed.
I am a dance teacher, and that is what I am qualified to do. If I didn't work as a dance teacher, I would most likely be in a minimum wage job anyway as I have no other qualifications other than GCSE's and A Levels, and would still be claiming WTC and CTC.
I work 60 hrs a week (about half of these are 'unpaid' admin hours) on a good week during term time, and about half that during school holidays and this is because I enjoy what I do, and even if I don't have lots of spare cash to invest in my business I can invest my time and commitment into advertising and promoting it to encourage growth and new customers. If I am ill and don't go to work, I don't get paid.
I do think that if your work is 'seasonal' though as mentioned in the OP (as mine is - mostly term time) then you either have to put money aside for the leaner months during your busier times, or think of ways to create additional paid work. I run one off dance workshops in some school holidays to help create additional income, it doesn't make as much as my termtime classes, but every little extra helps.

To someone looking in they would think I don't run a viable business, because my working hours per week compared to my income income makes it look like I am earning far below minimum wage. But I would rather work 60 + hrs a week doing what I love (and get paid for 30 hrs a week) than do 30 hrs a week in a job I hated.