Moving from Benefits to Self-employed

[circlehead]

Hi all,

I am currently a SAHM (LP) receiving I/S, Housing Benefit & CTC.

I'm in the process of setting myself up as self-employed, but cannot get any concrete information on what happens re benefits. I even went to the JobCentre to speak to someone, but was sent away with a phone number for a company that provides business advice

Who and how do I tell about my new circumstances? And how will my new rate of benefit be calculated?

TIA

some of the links you need are here
cgi3.ebay.co.uk/ws/eBayISAPI.dll?ViewUserPage&userid=talkinpeace

and the rest of the info you need can be gleaned here
www.ukbusinessforums.co.uk/forums/forumdisplay.php?s=b4dbb6f2951ba66ce8118e19e9b87dad&f=55

GO FOR IT

The best thing to do is talk to Inland Revenue - they will sent you all the info you need.
then you tell the IS people the date that you went self-employed ( you have to do this within 3 months)
Your benefit will stop from that date.

Please bear in mind that you will get No benefits at all when you are self-employed - no council tax, no housing, no money. You will still get child tax credits, but you won't qualify for working tax credits.

everything you need is here

Nickel - the whole HMRC site is pretty scary as a whole - that is why on my ebay page there are links to specific bits and then new users can work outwards from there

also
HMRC are great ones for assisting people in paying their tax, not minimising their tax bill and developing their business.

your ebay link is brilliant - It's got some great advice on there.

I know I spent quite a lot of time on the phone to inland revenue when I started up - they are really good when you talk to them in poerson - they explain it so well, and even guide you through it all step-by-step.
(you're right, if you don't know what bit of the HMRC website you're looking or it can be a bit daunting!)

happy to help - it is the work of many years wasted on the ebay boards !!

I believe that nickelbabe is incorrect, and that you should be entitled to working tax credit and housing benefit as self employed- obviously dependent on your earnings/hours of work.
The job centre are remarkably unforthcoming about this subject do not waste any time asking them

I am partially employed and partially self employed and receive tax credits, council tax and housing benefit. There is a specific form for self employment for housing and council tax benefit for my council and I presume for others and unless you have large changes you only need to complete it every 12 months I think. I am more complicated due to amount of jobs and newly found SE work :) so HB gone down but that is fair enough.

Working tax credits definitely available for Se but you need to be able to back up evidence of your working hours and what you do in them. I have heard HMRC are gradually checking all SE people for evidence of their working hours to stop people who show v low profits and claiming WTC when they may not be acrually working 16 hours a week.

Great, thanks to all for info and links. My friend has alot of contact through her work with a man at the CAB - she says he is an expert on housing benefit and the like so has recommended I speak to him.

Also, I am wondering whether I actually need to register as SE at the present time. I certainly don't expect to earn over the Personal Allowance limit for some time. Can I just register as self employed then, provided I declare all that I earn along the way?

You need to register as self employed within three months (I think) of becoming self employed even though you may not be earning up to the personal allowance. There is also National Insurance to pay (you can get a small earnings exemption but otherwise you need to pay £2.30 a week I think. Can be a good idea to pay it even if you don't need to in terms of potential maternity allowance etc).

joker - you're probably right - I know that we applied for working tax credits and we didn't qualify. I think it's more likely to be how much DH earns (because my profit was £750 last year!) that we didn't qualify, rather than me being self-employed.

even if you don't earn anywhere near the personal allowance limit, you must register as self-employed.
don't forget that you put down all of your income and expenses for your business, so you will most likely make no profit at all in the first year or two.
Every year since I've been self-employed, i've received tax back because it's been lower than the earnings limit. You put down any interest you get from your bank accounts, too, and that's what I've been receiving back.

yes, NI is about £2.30 a week, and if you don't register, you don't pay it, which means you won't get credit towards your pension.

Oh man, it all sounds so complicated

I'm just really concerned about the interim period in between income support stopping and accumulating enough work to cover (and hopefully exceed) it.

You will get WTC if your earnings are low...I got this for my first 2 years of S/E, as my business was taking off.

and council tax rebate as i was a single parent, i honestly thought that it would be daunting but i got a business start up grant, I am now in my 3rd year of S/E

circle - don't worry - just keep your record sup-to-date and make sure that HRMC know you're self-employed.
I think WTC work on the basis of your full earnings for the previous tax year, as does everything in your self-assessment.
I would say, if you expect to make a profit quickly, make sure you keep a pot of money aside each week/month so that you have enough to cover your tax bill (SE tax is just under 30% here are the rates , after your basic allowance) so keep by 30% of any profit you make - ie: money left after you've taken your payments from your income.