Becoming self employed - help please!

[Francesca89]

Hi there,

I'm employed for 8 hours each week and have thought about selling handmade/dyed baby clothes alongside this job. I'd be selling on social networking sites, eBay, craft fairs, baby fairs, friends, family and word of mouth!

I understand if I work 16+ hours a week, I should be entitled to Working Tax Credits. With working my current 8 hours (and sometimes more), I think I would easily be able to hit 16+ hours each week, considering all that will be involved.

I'm after some advice, as this is all confusing me. I've spoken to WTC & the Self Employment Line, to no avail. They were as helpful as a chocolate teapot, passing me from pillar to post.

All I'd like to know is, is it possible to remain employed by my current employer and also become self employed? How would I claim WTC if I don't know how much my own little business will make? I don't want to end up owing overpayments due to doing something wrong. Am I making this more confusing for myself, than it actually needs to be?!

Thanks in advance :) x

Yes, you can be both an enployee and self-employed at the same time.

There are spaces on the tax credits forms for hours worked and all details of income as an employee and profit from self-employment. You add them together and that is what gives you the total figure * .

You can estimate the figures for self-employment (actually anyone starting out in business would have to do that) and as soon as you know of any changes then you notify them straight away.

It is also possible for someone to work quite a few hours for very little reward as self-employed, since you have to start somewhere * you can actually sometimes make a loss if your expenses are greater than your income.

Yes you can, to both. However, be prepared for the fact that your business may come under scrutiny for wtc.

www.gov.uk/government/publications/revenue-and-customs-brief-7-2015-new-rules-for-the-self-employed-claiming-working-tax-credit/revenue-and-customs-brief-7-2015-new-rules-for-the-self-employed-claiming-working-tax-credit

Thank you for the replies :)

I have read about this and mentioned it to my advisor at the Job Centre (being a lone parent and only working 8 hours each week means I'm claiming a little Income Support). She told me that I would have to declare anything I sell and she even has Mothers claiming WTC from just selling on eBay, which I was surprised to hear...

I'm going to look into insurance etc and see if it's a worthy route to go down! X

That will change Francesca , honestly, the last person you want advice from on self employment and tax credits is the job centre. Many people are being screwed over due to their advice on self employment. Many ebay sellers, along with many crafters, will lose their entitlement. Not many people spend over 16 hours a week 'working' on ebay and not many of them mage minimum wage after expenses. Some do, but so so many don't. The loophole is closing.

They have tightened up on it. There are people being turned down on application because their business is not deemed to be likely to realise a proper profit, be run correctly etc etc If you are in your start up period you cannot claim WTC for the actual start up either.

According to rumour (I don't have the details to hand) there will be stricter rules coming (next year they are rumoured) which are similar to the Universal Credit rules regarding self employment with the difference that if you aren't earning.

If you do go ahead, make sure you have all receipts/invoices, keep records of the times you've worked and what you were doing, keep records of adverts, your business plan etc etc because you will require this when checked up on.

I'm not sure why you advisors response to your questioning was 'you have to declare everything you sell', that is the most simplistic rubbish advice I've ever heard. Yes, you have to declare the money from what you sell, that's a no brainer. But it's not as simple as she's just made it seem and that is not how you prove your business. If you do not earn, after all expenses, minimum wage x the hours you put in you will be contacted and ask to prove your business.

Good luck with your venture. One piece of advice that is priceless, is please price yourself properly, not to undercut everyone else or to undervalue yourself, that won't help you but is a mistake many make!

Sorry,I missed a bit out, started typing and went onto the next paragraph! The rumour is that if you aren't actually earning minimum wage x hours worked, then from April 2016 the rules change meaning that you cannot claim WTC

Thank you so much for an informative reply! It's been most helpful.

How do you know so much, if you don't mind me asking? Have you been in a similar position yourself?

My advisor was very blasé about it all and she has made out it would be an incredibly easy thing to do. I don't think she understands all the little things needed in order to get things going! It's definitely not as easy as she made out it would be.

Goodness knows how her other Mothers are claiming WTC by just selling on eBay. I'd have thought it would be difficult to earn at least the minimum wage by doing so. But I suppose that'll will all more than likely stop soon, what with these new regulations coming in.

Thank you again :) I have lots to think about! ;) x

I'm a single self employed mum, previously on IS and CA due to caring for son. I did claim WTC when I started.

Thing is I often give little bits of advice/facts to others starting who want to know how to register as self employed, about marketing and various other things. What I have noticed is that the Jobcentre are very good at encouraging people to go self employed (I didn't talk to them about it myself though) which seems to be to boost their figures.

Even that New Enterprise scheme they have going, where they help people set themselves up, create a business plan, get signed off and given a bonus of £40 a week and told to claim working tax credits is leading to people doing it, having no viable plan and being turned down for working tax credits instantly -no claim for them to check up on, they just say no!

The rules first changed in April this year due to so many hobby businesses exploiting the working tax credits loophole,so they have now redefined self employment for their purposes, and make checks, they also turn claims down. Next year will be worse. A lot of card marking, felt owl, glittery crap and beading mums will be losing their tax credits!

If you pop over to the MSE forums you'll find several threads on it and they can advise too. The New Enterprise Scheme thread is quite an eye opener in how the job centre are encouraging businesses that aren't viable and telling them to claim WTC only for the people to be turned down, unable to even try running their business and then having to reclaim benefits but wait up to a month before they get any payment!!

I am self employed. For three years I was also employed. It took that long to get up to a full time income without investment. You may not want to run your business full time in the long run, but to begin with it will have to become your life. You cannot start a business selling but only work part time as there's a lot you need to do to get that part time pay. Be prepared for graft and sacrifice if you're going into retail. On the plus side, I love being self employed and the flexibility it brings when it comes to being a mother and I wouldn't change it for the world. It's just hard work!

Hi everyone. I've been joining a few forums recently because my employer is going out of business. He's retiring and there's no one to take it over and he hasn't been able to sell it.

I only work part time because I have two pre-schoolers, but my OH only earns enough to just cover the bills. I'm in Dagenham.

If anyone hears or knows of anything going that would be great. Thank you.