AIBU to have given unwanted advice

[GarageRoofLeak]

My sibling has decided to go self employed in order to get off benefits. The job requires a lot of up front expenditure and many further expenses which they have been told they can claim as business expenses for the purposes of tax. However, they seem to think that claiming expenses means they will be refunded the full amount by HMRC. I have tried several times to explain that this is not what happens. They have budgeted as though they will be getting all this money back and already made some fairly big business purchases.
When I broached the subject they became very hostile, claimed I was trying to sabotage their job (by explaining how tax and expenses work) and has now blocked all contact with me.
Was I unreasonable to give them factual information about tax? They insisted I was “lying”. Funnily enough, after a bit of googling, I can see that many people do seem to believe they get their expenses paid back in full, if self employed. Is anyone actually in self-employment and receiving reimbursement for business expenses rather than a reduction in tax?!
Was I unreasonable to explain tax to them when they didn’t ask for my advice?

I’m being deliberately vague. I don’t wish them to be identifiable in any way by people they may know who are on mumsnet, so not giving any specifics.

That's totally fair enough. It matters not what sex they are anyway.

Yes, YABU. It’s one thing to attempt to start a conversation but when someone isn’t interested and makes it clear, you shouldn’t keep pushing.

This will be a teeny tiny teeny business “enterprise”

i wouldn’t worry OP

You did your best, OP. Time to stand back now and either help them out when they fall, or (as i would) indulge in a massive dose of Schadenfreude.

I agree generally, but the reason for their reaction is because they think I am lying and for nefarious reasons, and that is because they have misunderstood what they have been told..I.e. “you can claim those as business expenses”..
and what I said contradicts what they believe they have been told. I wanted them to understand that what they have been told means exactly what I am saying, before making large “business” purchases that they can’t afford. I did suggest they speak to an accountant.

Ah so a back story of a weird relationship between the two of you.

this business will be minuscule
they will learn soon enough
and quite clearly you are not someone they will ever listen to about anything

It’s not in terms of outlay, compared to potential income. A lot of unnecessary non business expenditure also, in the expectation that the business expenditure will be paid back.

Absolutely zero point talking to an accountant At this stage. The “business”is nothing as it stands

What figures are we talking to here?

i am guessing this person doesn’t exactly had lots of funds available

Is it Uber Eats or something like that?

Are the expenses one off or ongoing?

Obviously he needs to understand the tax thing, but it does sound like he's making a real effort.

Not sure how that points to weird backstory. They haven’t worked for a very long time and have had advuce from someone they deem qualified to give advice. Obviously they don’t think I can give advice on self employment business expenses/tax as I have never been self-employed. I am able to read and understand HMRC tax rules however.

I don’t think you were unreasonable to give the advice. I know some people say you shouldn’t give advice until you are asked for it, but I honestly think politely waiting while watching someone make a mistake you could’ve prevented by speaking up is much worse.

Your sibling is being a jerk. The businesslike response would have been to check what you said on the HMRC Website. But I think it’s pretty clear they probably aren’t business material.

I would have been really angry with their reaction and would be completely disinterested when they eventually come whining that it’s all gone wrong.

I’ve just had to Google. They do have to pay their own operating costs out of earnings, so it’s similar in that sense. Same for most self employment though.
If I set up a ballet school and had to pay to hire the hall, pay for teachers and pianist , but thought the HMRC would reimburse me all these costs (?!?!?) , so, thinking I’ll have surplus income I go and buy a big stash of expensive (Let’s say £5,000 worth) ballet costumes for future shows (even though I haven’t even opened the school yet)….My earnings from fees for the year will basically cover the expenses and the costumes but leave me nothing to live and/or result in a loss. That’s the kind of the situation….but completely unrelated to ballet.

* the reason for their reaction is because they think I am lying and for nefarious reasons,*

yes. This does point to a backstory and a weird relationship between the pair of you.

indeed this very thread also confirms that this is an…odd somewhat fraught sibling relationship!

They’ve been on benefits for years

They amount of money they’ll be spending on setting up this “business” will be peanuts surely

Maybe it just seems normal to me because I’m used to having a sibling who makes impulsive ill thought out decisions and have to deal with the consequences. I do appreciate this isn’t the norm for most people.

It’s the reason why they wouldn’t believe you

How much are they looking to spend to set up?

Yes, limited to what they recently had in the bank, I would hope.
I do believe you can have up to £16,000 in savings before it has an impact on benefits.

They said why. I don’t have a business studies degree! The person who advised them apparently does.

I am glad nobody has piped up to say that some people can get their business expenses refunded. I was beginning to doubt myself after being called a liar and blocked for saying this doesn’t happen.

Just make sure when the whole thing falls over that you aren’t involved and aren’t helping them as they made it very clear at the start that your help isn’t wanted or asked for and the nastiness you’ve received by trying to help you now need to let them fall down on their arse and work out how they sort out their own mess/pay their own bills etc

Yes I am leaving them alone. That wasn’t why I started the thread. Just wanted to know if I had my facts wrong, and if I should have said nothing in the first place. I was trying to stop them making a rather large financial mistake. Maybe I should have just nodded and let them get on with it, but I think if shoe were on other foot I’d have at the very least checked out my sibling’s claims.