Nothing to live on

[anunseemlylovefordustin]

Keeping this deliberately vague, to try and keep the person relatively anonymous (it's not me!) I have a friend who has been self-employed for around 20 years. As far as I know they have always paid tax and VAT, but I don't think they paid National Insurance.

They have suffered from bipolar disorder (bipolar 1) for a long time (sectioned twice, regular episodes and hospitalisations). They managed to maintain stability (when they got into a stable relationship) for about 8 years. However, earlier this year work stress ended up with them suffering a full breakdown and being fired from the contract they were working on.

Fast forward six months or so. Said person is slowly dragging themselves out of cataclysmic depression but is not at a point yet where they're capable of working. They only have enough money to last a couple more months (they've been living off their savings and loans from friends and family) and have a large tax bill due in January. The fear and anxiety about these converging points (running out of money, owing money and not being well enough to work to earn money!) is starting to push them back over the edge again.

Short of lending them money (which I've done previously, but can't really do any more) is there anything that can be done to help them with living costs? Can self employed people claim government benefits, if they may not have paid national insurance? I'm not experienced with the benefits system at all, so I'm not really sure where to start looking to see if they can get any help. Can someone point me in the right direction for where to start looking/who to ask, or give any advice? I'm desperate not to see them tip over the edge again :(

Have a chat with the CAB and/or Step Change

HTH

Thank you! Somewhere to start.

Talk to the tax office. See if there can be any sort of deferment or payment plan.

Do they get PIP (personal independence payments)? I get it for bipolar--it's not related to your ability to work, nor is it related to income. It's definitely worth a go if they haven't already.

No PIP, they've never claimed any kind of benefit. Where would they start with finding out about that - the CAB, maybe?

Would I be able to call HMRC on their behalf, do you think? Or would they have to call?

This really doesn't sound right. If you're registered as self-employed then until recently you paid NI through direct debit, or claimed a small earnings exemption. If they were paying tax, they would have been paying NI.

And VAT as a self-employed trader doesn't kick in until you're earning around £70k, so on those earnings tehy would definitely have been paying NI.

Whether HMRC will talk to you about someone else's tax matters is an entirely different matter.

Doesn't sound right in what respect?

If you mean them being VAT registered means they definitely would have been paying NI, then that's great news! When I was asking them about it they said there was no way they could claim any benefits because they hadn't paid NI so there was "no point in even trying to find out about it". But I know they've been pretty mentally fuzzy the last six months or so, so I guess they might have got that wrong?

I'm not a troll or anything, I'm just trying to find out if there's anything I can do to help them see that there may be financial help available to them - because at the moment, as far as they're concerned, there's absolutely nothing - so therefore not any point in even trying to find out

It just doesn't sound right in the way being self-employed works... it's only very recently that they scrapped direct debit collection of NI. If your friend was registered as self-employed, they would have been paying NI unless they were earning very little and claiming a small earnings exemption. But the level for claiming that was something like £5k, far far less than the threshold for VAT.

If they are doing tax returns online you can log into their account and see what they have paid over past years in NI. I would also imagine that they could call HRMC, prove who they are then pass the phone over to you.

I don't know however what you need to have paid to be elibigle for benefits - that's a differnet question and one which the Job Centre would be the best people to answer.

They'd probably have to call.

You might be able to be put on the files as person who can discuss things.

HMRC didn't used to be very understanding, but I think they're starting to change.

Ok great thanks. I've been looking on the stepchange and CAB websites, lots of useful information on there - thank you! It also looks like they could formally assign me as someone to talk to HMRC on their behalf, if they wanted to. I'll try and gently mention the websites and see if they'll take a look - and offer my help with HMRC if they want it. Thanks all.