hi,
I recently completed a 6 month course run by the BI in Stoke on Trent, the course is aimed at getting unemployed people started in self employment,
firstly to even qualify to go on the course one has to have been unemployed for TWO YEARS,
also it is illegal to even begin to make preparations to become self employed while one is claiming job seekers allowance,
so, after 2 years of unemployment I was allowed to start setting up my "business" from 16th of march this year, I am now given 6 months in which to buy all the tools and equipment I need, (I even had to move house so that I could build a shed in the yard) my business involves me buying in pottery and then painting the pottery firing it in my kiln and then selling it on, I am a trained pottery painter and ex wedgwood employee, and also a life long airbrush artist( as a hobby), and I decided to combine these 2 skills to produce "different" designs on china vases, bowls, tiles, etc.
at the end of the six month course (15th september, 08) I am expected to be able to earn a living and be trading, quite frankly this is just not possible after 2 years of unemployment and no financial help what so ever,
as of the 15th september I can no longer claim job seekers allowance, as I am "self employed" even though I am nowhere near ready to start earning,,
I can claim tax credits and am in the process of applying for this, but have been told it can take 6 weeks or more, and in the meantime I have NO income at all from anywhere, I am supposed to be running a business, yet I have no money for food let alone materials,
to sum up, I feel very mislead by the people who were supossed to "help" me, it perhaps wouldve been better to advise me against this course of action rather than thinking of me as another goverment cheque, I now find myself in debt to the tune of something like four thousand pounds, loaned by a very good friend (for equipment etc)
I have about 100 pounds in my bank account,(I sold my motorbike intending to use the money to buy materiels to get me started, instead I have had to use this cash to live on)
It now seems that I have no choice other than to give up and sign back on the dole,
a complete waste of a year of my life.
so anyone out there who has been unemployed for 2 years and is thinking of taking this option, try to see through the BS,
the government want to lower the unemployment figures, some agencies get paid for every person they take from the dole, ask yourself, do ANY of them have YOUR best interests in mind?
I am sorry that my story isnt quite so happy,
A Johnson (mr)
PRIME discussion forums » General business discussion
MY experience so far
(15 posts)-
Posted 1 year ago #
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Sorry to hear of your experience, but can't say that I am surprised. Something similar (but no quite so dire) happened to me in 2004/5. The mistake is to assume that the government wishes to help actively. It will help but at arm's length. Perhaps this attitude will change now recession looms large. My advice would be to persevere with what you are doing. Don't give up. I know several entrepreneurs who had a very difficult start and came close to giving up. At least if you try, you feel that some of your destiny is in your own hands. You appear to have the skills; keep the will!
Posted 1 year ago # -
Hi Vulcan,
This is a bit worrying. No one is meant to be forced into starting up a self-employed business until they are ready.
Let's hope we are not about to see a lot more of this. There is a move to pay training companies by results in the new "flexible New Deal" contracts now being put out to tender. The companies will get staged payments, for example when the trainee stops signing on and after they have been in business for some period of time such as a year.
There is a real danger that this could lead to companies bullying trainees to start before they are ready - or even to start non-viable businesses. If this is happening already it is an abuse. And it's counter-productive and a waste of money even from the DWP's perspective.
It would just mean that the state has paid over money to the training firm and gained nothing in return, as people who start without a viable business will just end up back on the dole. If they are saddled with new debts they will be worse off.
You say in your post that "it is illegal to even begin to make preparations to become self employed while one is claiming job seekers allowance". This isn't true so I hope no one has been telling you this. You can work up to 16 hours a week and keep your JSA claim open even if you are not on a training scheme, just as long as you declare the hours and any earning you make.
They subtract the earnings from your benefit and take all but £5 of your earnings if they exceed the benefit. But it can be better than nothing while a business is starting up and you are earning in fits and starts and working on preparatory things that bring no money in.
If you do find yourself back on JSA perhaps you can try again later but delay the start until you have some substantial orders lined up. Even then you'd still have to grapple with the problem of paying for materials and other costs.
The big problem here is that the system isn't geared up for the transition between being on benefit and being in self-employed work. The system can really only handle total workless dependence on the one hand and full-intensity income-generating work on the other. The stuttering start of a new business doesn't fit neatly into either state.
Ian.
Posted 1 year ago # -
Thanks for the responses, I wast 100% certain about the legality of preparing to go self employed while claiming JSA, I dont remember it ever being pointed out,
the thing is, I had to first apply to go onto the course for self employment,(I had to present a business plan for aproval ) so untill I got the go ahead from these people I dared not invest any money into buying equipment etc, I needed a kiln, and a workshop/shed,just for starters, I estimate that I have spent something close to £4000 pounds since march on equipment,
A lot of what I intend to do is very experimental and a period of trail and error would have to be gone through to perfect some of the techniques I intend to use (this is the stage that I am at now)
the costs are quite low as basic materiels are quite cheap and I didnt expect to be earning a fortune, just enough to get buy but doing something I love wouldve been good enough for the first year or so, (if I can survive for 2 year on JSA I am sure I could at least equal that income from my work)
Anyway, its all by the by now, as of this thursday IF the tax people dont come through for me then I will be signing back on,
I dont intend to give up though, the plan now will be to take a part time job (if I can get one!) and continue to build what I have started,
but I do feel that to expect someone who has been unemployed for 2 years or more to be able to get a business up and running and EARNING in just 6 months is a "tad" optomistic, but 6 months is all they give you,the system in the Republic of Ireland is far better,(I lived there for a while) while I was there I was made redundant and took up a similar scheme that they run, only in their system one is given FULL unemployment benefit for a year reguardless of earnings and this continues for 4 years reducing by 25% each year, probably because they actually try to help rather than just massage the unemployment figures,..sadly I had to leave Ireland due to a family crisis before I even got started,
thanks again for the replies,
Alan.Posted 1 year ago # -
Hi everyone,I was going to start a new thread but having read your experience Vulcan I thought it would be best to post here.
I'm on incapacity benefit at the moment and been ill for a couple of years,but on the mend now and find myself in a position where self employment would be my best option for getting back to work.
I'm an artist with a very strong portfolio suitable for prints and illustration work.I've had a lot of good feedback from people in the industry-good contacts.I've had offers,not just for sales of work but also commissions.
I've had to turn these down rather than take them on as much as this pained me as I know full well that my benefit claim would be instantly cut off .
I couldn't see a way out of this wretched situation of either' you are on benefits or you are on your own' and it's a rare business start up that makes enough money to support a body for at least the first year so I found myself hitting a brick wall of all or nothing.
Sheer frustration and fishing around on the net lead me here,I was offered another commission yesterday and will have to turn it down.Ok,to the point.I turned fifty a few weeks ago.
I've just discovered the working tax credit leaflet here,downloaded it,read it through and at first read it seemed like it was the answer to my prayers,and then of course the doubts crept in, and from what I've read in this thread and from my own experience governments only want to help at arms length
and always have an agenda (in this case unemployment figures) but still,it looks better than a kick in the teeth and hopefully a lot better than being stuck in a benefits catch 22.Questions questions questions!
Having looked at the charts,given that I would be unlikely to have first year profits over the limit I'd be entitled to the full £81,at least for the first year when the over fifty element applies.Not a fortune and I don't expect one, but not much different to what I live on now so manageable.My first year profits would be unlikely to go over the limit and might well be a lot less so WTC would a a safety net.
This lead me to housing benefit/council tax benefit.At the moment this is paid in full.I'd rather not be claiming at all but sometimes needs must.
Q Has anyone here had the experience of claiming WTC as self employed and claimed housing Benefit C/tax Benefit because they were on a low income in the first year?
I downloaded a Self employed Housing benefit form from my council to look over and they want a lot of information,some of which I could supply if I were to take the self employment plunge and some I couldn't or possibly couldn't.
Some for instances.
Recent accounts- no,I would just have started
Business start up allowance -no idea what this is
Last six months business account statements- Again no I, I would have just started.On the subject of business accounts- I would, I think, be a sole trader.I have a good track record with my bank in the sense that I have never been over drawn,and I have never been in debt so my credit rating is ok.
Q How straight forward is it to get a business account? I wouldn't need a loan but still,would they expect a whole pile of business plans and forcasts of profits etc or is is simply a matter of filling in a form.Q If I were to apply for Council tax benefit,the form asks for information on out goings including such things as renting an office,rates gas electricity and phone for the office etc.
I would be working from home,my artworks are all digital so basically I would be doing this in a corner of my bedroom.
Would the very fact that I had applied for council tax benefit ring alarm bells for business rates and effectively mess everything up?Furthermore I've heard that councils are notorious for messing up claims from the self employed,slow at responding and constantly on the case for accounts every two or three months!Getting a self employed tax return together once a year sounds stressful enough.
Sorry for the long post,I hope it makes sense and if anyone has any thoughts or experience of all or some of this I'd be grateful.On the one hand this could be a real opportunity for me, get me out of the benefit trap and on to a better quality of life,but on the other hand it sounds like it might be a bureaucratic nightmare
Thanks in advance
SamPosted 1 year ago # -
Hi everyone, found this topic after googling "run a business while claiming benefits" - which I know is possible, but there is no information anywhere available from anyone (and especially from those people who should be helping us - the benefits peeps).
From what I can gather you need to set up your business as a limited company and as long as you don't take out more than £95 per week you can claim housing benefit, income support, council tax benefit and anything else that you can claim while on a low income.
It seems that the most important thing to have when setting up your business is to have a creative accountant who knows the score and what you can and cannot do. Check out this woman on Dragon's Den who is not only claiming benefits, but is also running a profitable business, and asking for investment - all legal and above board - http://www.bbc.co.uk/dragonsden/episodes/s6e6juliettes.shtml
Last little bit before I go off my further hunt on working the system regarding my experience - I was made redundant without notice in January 2008. As soon as I went to sign on I asked about the situation regarding if I wanted to go self employed. I was told that I could do all the planning and ground work, but as soon as I started trading I would have to sign off, but was not given any useful advice regarding.....anything.
6 months later and still claiming I was then offered the option of going onto the New Deal self employment route. It seemed like a good option, a year of benefits while trading and then you're on your own, or go back on benefits........if only it had been offered 6 months earlier when I was in a position to start up with a little help like that.
Posted 1 year ago # -
Hi Samuel and marcosoto,
1. Unfortunately for a lot of people housing benefit is the real poverty trap, as the amounts of money at stake can be large. And the rules are unclear. It's run by local authorities, and each one one seems to make up its own interpretation of the rules.
Since individual staff may not encounter many self-employed people they can make mistakes handling the claims.
The most frequent problem PRIME gets to hear about is that staff simply don't understand self-employed income. What they should be looking at is net profit - in other words what's left after legitimate business expenses are deducted. If they omit this step and just consider any incoming revenue as your income then this will vastly exaggerate your real income. Though it's a clear mistake and made by them, not you, it can still take time to sort out.
How well the process is handled varies tremendously from place to place, so it is certainly worth going and talking to your local council about housing benefit. After all, what you are doing is attempting to work your way off benefit! Some councils produce their own leaflets for the self-employed. It's worth reading a few just to see how much the explanations differ.
2. You don't need to have a business bank account (which is just as well - banks may turn you down if they don't like your credit history). You just need to keep your business and personal finances separate. A separate account, whether it is called "business" or not by the bank, is useful to make it all easier to disentangle. But you don't have to have one, though it does make things simpler.
3. The same is true for an accountant - you don't absolutely have to have one of these. Most people find them necessary when the time comes to prepare annual accounts, which means you can probably leave it till you have been trading for a year. Chatting with an accountant early on can be helpful in setting up your books, and you may be able to get this initial consultation for free.
4. You don't have to set your business up as a limited company. Indeed, if you do technically you aren't then self-employed, but an employee of the company. The great majority of small business owners are unincorporated (without a company) sole traders.
5. morcosoto - that six month rule is really frustrating. PRIME has been campaigning against it for years - with no success I'm afraid. It is there because Jobcentre wants to avoid the risk of getting people started on self-employment schemes only to have them leave early - to take up a regular job offer. But for the over-50s this fear makes little sense, as offers for regular jobs are unlikely to arrive in huge bundles. So there's a still a stupid lack of realism about the system.
Posted 1 year ago # -
HI all, me back again with another update, todays date is...19th of november,
and I have now gone through my second month with no income at all, I had no choice but to sign back on as unemployed on the 4th of November, and as of yet the "very helpful" people at the jobcentre have not seen fit to give me anything,
I think its a case of the emperors new clothes, the vast majority of the great British public never have to deal with these people, therefore the illusion of "help" is all they need to provide.
Its all smoke and mirrors, it sounds good, and that is good enough for the government "spin doctors"
I spent a few years living in the Republic of Ireland (1999-2006)
and during my time there I found myself unemployed, after only SIX MONTHS I was offered a place on a similar self employment course to the one in opperation here,
the difference between OUR system and the Irish one is they seem genuinely keen to HELP, for instance, their course also lasts for six months, except one spends a full day each week with an instructor and not a few minutes speaking to an "advisor", and at the end of the six months one continues to receive their equivalent of JSA for another 4 years!, this starts at the full amount for the first year reducing by 25% over the next 3 years, also for the first year your benefit is GUARANTEED reguardless of you earnings, see, the Irish WANT to actually HELP, and not just appear to help, or even hinder.
so...after being forced to sign back on due to the length of time it has taken both for the tax office to allocate me with a UTR,
(I found out yesterday that a letter they sent 2 weeks ago telling me about self assessment also contained my UTR, they just didnt bother to point this out in the letter)
and the time it has take for me to get some response from the working tax credit people (ongoing as I write)
and it has taken over 2 weeks of dealing with the jobcentre and STILL no JSA,
as I write I have not eaten for over 48 hrs I have electric and gas on prepayment cards, Ive had no heating for over a week, and my electricty will go out before the end of the day,
and these people STILL insist on saying they are "helping" me,
well,all I can say is...do me a favour....DONT do me anymore favours,
I fully intend to keep going with MY ideas and my business, but can no longer promise to "play by the rules" I have 2 words for the governement and their agencies, and the last one is OFF,
sorry for the long post.
Vulcan.Posted 1 year ago # -
Hello Vulcan, Samuel, Marcosoto & Admin!
I am wrestling with similar issues regarding self-employment, income support, tax credits, housing & council tax benefits. I'm not an unintelligent person but trying to figure out how this all works has been driving me potty for months and months. I have every sympathy withVulcan saying he can no longer promise to play by the rules. I suspect that is his only way out of the trap.
As a divorced mother of 4 school-aged children I could take the easy option and remain on benefits until the Government's new rules force me out to work when my youngest reaches the requisite age. However, I want to work for my sanity's sake and because it is the only way to improve my family's living standards. As it happens I can get a job if I want one, even though I'm nearly 50. I think it's much easier for women of this age than for men and I have a wide range of skills and knowledge. But any work I do must fit in with domestic duties, school times, school holidays, kids off sick, snow days (!), etc, plus I have an independent, entrepreneurial spirit that doesn't always sit well with bosses, so self-employment is my best option.
I have marketable skills that I could be using but I cannot risk being worse off financially by working. In particular, I can't afford to lose housing benefit. It's very disruptive to family life for a lone parent to be working, not to mention exceptionally hard work physically and mentally, but if we are better off financially it is worth it. I do have the advantage of advice and 'Better-off Calculations' from a Lone Parent Advisor. However, these people are not well-placed to advise if you are considering self-employment. So far they tell me it would be better to get a job, as it's too complicated to be self-employed. Too complicated for them, maybe! I want to work for myself because I've tried being an employee and it's far too stressful combining that with being a single parent of four. It's all so frustrating.
Surely, with all the money Government spends, there is some department or advice service that sees the full picture and how it affects those wishing to be self-employed!!!
I will be fifty this summer. It appears I should delay my plans for self-employment until then in order to take full advantage of the system. I found this website only because I overheard another single mother at school bemoaning the fact that there was little help available to her because she's over 30 but under 50 and wanting to go self-employed as a hairdresser. There must be literally millions of mothers who have the skills to work for themselves and earn an income of sorts but who need support from the system to ensure it actually benefits their families.
I've looked over your website and still can't find what I'm looking for - a personal advisor who will listen to my particular situation and inform me fully as to my choices and how best to use the resources (State & private / charities) that are available. Why doesn't PRIME provide a personal advice service? It's obviously desperately needed. Why not finance regional advisors? I would certainly volunteer my services to help others in my situation.
Best of luck to you all.
Posted 1 year ago # -
Hi Samuel,
I think you have a point however have you considered, taking on your commissions completing them and ask the purchaser to pay for the materials and defer the full payment for the commission. Have the purchaser place the payment into an escrow account until such time as you build up enough capital to show yourself a reasonable income for say a year. This way you can do the work you like without receiving payment. Alternatively use this marketing plan X% deposit remainder paid in 2010. A simple contract will cover that arrangement between artist and buyer?
I hope this is something you may want to consider?
KevinPosted 1 year ago # -
Hi,
I run an ex service charity we find jobs for anybody who at anytime has served in HM Forces if you know of any ex serice personnel who are looking for work ask them to contact me or pass on their details and we will se if we can help.
I hope this info is of benefit
kevin@regularforcesemployment.co.ukPosted 1 year ago # -
I'm a newbie on this forum so hi all.
Just a thought as having reached 60 and now on pension credit.
Because it is means tested I am only allowed to earn £10 a week without it being deducted. I'd like to start up in business again - having not long returned from overseas - but this rather puts a damper on things unless I can somehow side-track earnings against expenses etc whilst starting up.I'm not happy about being on state benefit and would much rather pay my own way but such restrictions do oblige a 'leap of faith' into the self employed tight rope without a saftey net.
Posted 1 year ago # -
I'm just testing the waters about being self employed and appreciate the wealth of information about JSA , taxation etc on this website. I actually feel abit daunted after reading the posts. I've got a job now but am feeling that something is missing.
I'm 40-something and am planning to be self-employed (probably close to 50 by then). If anyone is interested in my ideas and reason for being self employed, or would like to share experiences, please check out my blog:
Posted 1 year ago # -
I am new to this forum, so hello folks
Vulcan - I am in the fortunate position of having a job but I was disabled in an RTA in 2001 and I am getting near to where I was before the accident just now. I have had the same situation with the 'System' but from the disabled persons point of view - it stinks.
I am looking at the possibility of being self employed as my work is a on unsteady ground.
I am testing the water with a web design service www.shed21.co.uk and offer my help without charge (free usually doesn't mean free) to get your business online.
George
Posted 1 year ago # -
Hello - this is for Graham, 3 messages above, and 10 months ago.
What happened? Did you manage to keep the Pension Credit, some of it at least, and Housing benefit, and still do some self employed work? I'm in the same boat but with a disability. I don't want benefits agency snoopers following me about to see if I limp badly enough.
Queens.
Posted 6 months ago #
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