Unemployed but registered

[handcrafted]

I have to register my business within this month as its almost been 3 months since i started the website. However i have just gone to the job centre to sign on last week. I asked them about having my business and how that effects my benefit. They said as long as i havnt registered then im ok.

So what if i havnt found a job in 4 weeks! Should i stop trading and close my website? Or stop claiming job seekers allowance. I have no idea what il get as i havnt received anything. Nor have i sold anything since before xmas!

[auntynet]

Look into Working Tax Credit - you have to be working 16hrs or more per week but everyone can claim it providing you don't have much in the way of savings.

[xrheax]

I dont have a clue (sorry)

I just wanted to say that is ridiculous!!!! How are you supposed to get money!!! Although my husband works I used to be unemployed myself, and my mum has been unemployed for a few months, and I can appreciate just how soul destroying it is. You would think that they would provide more help and support seeing as you are making an effort to get back into work!

I would phone up IR to be honest and see what they advise

[Pebbles]

They said as long as i havnt registered then im ok.



Worse than useless that advice!

I would try calling the benefit people - which ever dept is responsible and have a conversation with them about it. What they essentially have told you that it is ok to claim benefits and earn money as long as IR don't know about it! That's not right

[auntynet]

You should also look at the Princes Trust. You're under 30 so they should be able to help you with the business side of it with grants and support.

[xrheax]

You should also look at the Princes Trust. You're under 30 so they should be able to help you with the business side of it with grants and support.

I tried them, they told me I needed to be 25 or under. I was turning 26 two weeks after I contacted them so they refused to help.

[handcrafted]

Im 25 in 4 weeks. I called business gateway today. They laughed in my ear!! I said i was calling about advice for funding and starting a business. They said there is no funding available at all, no way, zilch! She was quite rude. Though they are sending me out an information package and suggest going to some business classes.

Thing is i know exactly what to do! I just need money for it!

Im hoping il get a job soon. Il talk to the IR. Sigh.

[cupcake]

My understanding is that you don't have to pay tax until you are making a profit, and even then I think your profit has to be over £5000 per year to be liable. I don't see why you shouldn't still be eligible for benefits, you aren't actually earning anything from your business yet, ie you're not paying yourself a salary out of it.

Call the IR, they are actually very helpful on the phone, more so than the benefits people. Failing that, you could try your local Citizens Advice Bureau.

[Pebbles]

You have to pay tax on anything that is left after expenses (materials and stuff) this is your profit. It is National Insurance you don't have to pay until you earn over £4800. You get a small business exemption or something for that, I have just applied for one

[cupcake]

You have to pay tax on anything that is left after expenses (materials and stuff) this is your profit. It is National Insurance you don't have to pay until you earn over £4800. You get a small business exemption or something for that, I have just applied for one

I have to pay NI but not tax. My income is very small. I am registered self-employed I earn money from a variety of sources, my jewellery is only one. You have a personal tax allowance every year, this year it is £6,035, that you can earn before becoming liable for income tax. If you have put money into a business, then you have to make a profit before becoming liable to pay tax on the business, that is my understanding. So for example if it costs you £500 to buy materials and to set up a website, get stationery, business cards, advertising yourself etc your company is £500 in loss. You make jewellery with the materials, and sell it, you don't actually make a profit until you have made at least £501 back. Your profit on that is £1.

You need to keep accurate records of all your expenditure relating to your business for the IR and will have to complete a self-assessment form once or twice a year depending on how you're set up.

[elzi]

i can't help you on the tax front but if you are not earning anything i think they should give you some money. my ex was registered as self employed last year as well as signing on. i have no idea whether he told them about his self-employed status mind but since he clearly had no money coming in it obviously didn't seem to cause anyone any issues....

on another note these people give business help to anyone under 30:
http://www.shell-livewire.org/

i think it is rubbish that there is no funding. try looking into business link, they're not very good in real life (especially when trying to get money out of them) but their website is excellent, very helpful, and they should have some links to organisations that can help you with business funding in your area.

[GlamGlass]

Hi
The best people are the Revenue people themselves. They are Extremely helpful and will tell you exactly what you need to know!!
You do NOT pay tax until your profit/income is over £6,035
This is your personal allowance.
There is lots of information on http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/Taxallowancesandreliefs/DG_078571

There is probably too much to plough through and the revenue office will probably give you a much quicker answer to things!! :)

[annnoble]

Yes you need to register with the IR if you are running a business, but you can also claim job seekers to as a self employed person.

They will expect to you to jump through a lot of hoops and fill out more forms.

You may also find that they do not quite know how a business should be run, ie they have no clue, or you might be lucky and find some one who does.

The best way when dealing with the benefit people is to give them as much information and more than required and ask questions. So go have a conversation with them, if the person your talking too has no clue ask to speak to some one who does.

If this feels to much, how much have you been selling? Under a £50-100 a month? If so don't register its just a hobby you could make the same doing a car boot or selling the odd bits on ebay.

If you want to pick my brains give me a call and we will chat, I have been through the benefit system its hard but you can get through to the other side.

Ann

[handcrafted]

Well before xmas i made up to £200 in about 2 months. But since then iv made about £30! So i guess it smore of a hobby. I am doing craft fairs though so that might make a difference.

[GlamGlass]

If this feels to much, how much have you been selling? Under a £50-100 a month? If so don't register its just a hobby you could make the same doing a car boot or selling the odd bits on ebay.

Ann

Sorry but that is completely wrong!!

The IR will look at anything that is bought, made or whatever, with a view to selling it as a business whether you make 50p or £50,000 and you CAN be prosecuted for not claiming you are a business etc!!

[Moonbeam Angel]

Don't know if this is of any help but I claim Income Support as a single parent and was told by DWP that I can earn £20 a week before it affects my benefit. I take it that would have to be £20 a week clear profit.

OI don't know if JSA is different though.

Have you tried contacting your local Citizens Advice and asking where you can find a benefits advisor outside of the DWP?? or if they have one that can help??

[annnoble]

I second what moombean angel says about earning up to £20 a week profit.

If Handcrafted is only earning £200 in a month, most likely none of that is profit and probably if you looked at all the out goings you will be making a loss.

Now I'm not taking anything a way from what your doing, but sometimes its less hassle to just enjoy it as a hobby.

You could of course decided its not a hobby and you want to pursue it strongly and turn it in to a business.

It really depends on your intentions for the future and how much of a paper work headache you want

[annnoble]

May I just add..........

I had a quick look at your website and you look like you have a business not a hobby, so after lots of discussion, maybe the best thing to do is register with IR, tell JSA but add your not making any thing right now.

I love your website it looks really really good and I love the star earrings on your home page and you chunky bead necklaces.

I know its all confusing but I'm sure you'll sort it out.

[handcrafted]

I have been trying to make it a business really. Iv only really started up. It was all very simple as i had a p/t job and i was going to register but now i am unemployed so makes it all a bit more complcated. The simplest solution is that i get a job within the next few weeks!

Im tempted to just wait and see if i get a job before the end of Jan. If i do then i can register as a small business and get NI exemption, plus i wont be breaking any laws as i wont be on the dole. Until then il call up the IR and also when i go to sign on again il ask more about it. It only takes a phone call to register and i have until the end of this month. So if the job centre say its ok then il do it asap.

Saying that i havnt sold anything i have just today sold a pendant! A lovely person from ths forum bought one :D

Thanks for the help everyone!

[spagbog]

you might as well just register and then its done. If yuo dont sell anything and its a "hobby" then you wont have to pay anything out. If you sell lots and havent registered you could get caught.

Best to register now while yuo are a small biz and then as you grow and hopefully your sales grow too you will already be registered. Dont worry about it. The less you make the less you pay.

[urbtaf]

I have to pay NI but not tax. My income is very small. I am registered self-employed I earn money from a variety of sources, my jewellery is only one. You have a personal tax allowance every year, this year it is £6,035, that you can earn before becoming liable for income tax. If you have put money into a business, then you have to make a profit before becoming liable to pay tax on the business, that is my understanding. So for example if it costs you £500 to buy materials and to set up a website, get stationery, business cards, advertising yourself etc your company is £500 in loss. You make jewellery with the materials, and sell it, you don't actually make a profit until you have made at least £501 back. Your profit on that is £1.

You need to keep accurate records of all your expenditure relating to your business for the IR and will have to complete a self-assessment form once or twice a year depending on how you're set up.


Dont think some of you have got how to work out your profits quite right.
When setting up a new business there are some things that come under capitol equipment ect. the cost of these can only be claimed at a % of cost per year. The length of time depends on the class the tax has put it in.
As far as stock for resale is concerned the sum is as follows( a simple version but shows the method)

stock bought---------------------------£1000 minus stock still remaining at end of tax year £300

Stock used----------------£700


__________________________________________________ _________

total sales-----------------------------£1200
less stock used-------------------------£700

gross profit--------------£500

less any other allowable expences = net profit, that you pay tax on, less your personal allowences

A simple example but I hope it helps

[cupcake]

Thanks Urbtaf, I was most of the way there. I assumed that all business set up expenses were deductable. I'm not running as a business so I haven't looked into this. My OH is self employed but has no stock as his company is IT services.

Anyway, I was in the right ballpark. What happens to the stock purchased but unused, that £300 in your example. Presumably as it sells (into the next tax year) it will feature in the accounts, but it is still £300 of expenditure, does it need to be declared anywhere and why doesn't it figure in the profit/loss?

[GlamGlass]

I actually think this term HOBBY is extremely dangerous!!!

There is no such such thing as someone with a HOBBY having a website that SELLS their goods!!!

You are fooling yourselves if you think that way and are liable to prosecution!!

I would tread careful if I were you!!

[Louise88]

Just want to ask while we are on this topic. Does my site on MISI mean that I have to register? If so do I have to register within 3 months of setting up, or within 3 months of selling something? :confused:

[urbtaf]

At the end of the tax year the £300 is stock held. So in the next year if your first stock purchase is say £200, then £500 is your new stock level, and so on through the year.
After a few years in business you will see the need to keep very good records, I have 2 garages full of stock, plus whats on the stall. Lose track of that lot and Im looking at about 2 weeks of stock taking, finding the price of stock I may have bought 15 years ago!
The inland revenue do have some very good guides on bookkeeping, and if you get a chance of any free courses take them, I wish I had time these days;)

[GlamGlass]

Just want to ask while we are on this topic. Does my site on MISI mean that I have to register? If so do I have to register within 3 months of setting up, or within 3 months of selling something? :confused:

IR would be saying within 3 months of opening shop!

[xrheax]

You have to register your business within three months of starting, not selling.

Thank you for the information urbtaf - it was very informative and it looks like I will definitely need to analyze my accounts a lot more. I do not have much stock to be fair - most of my items are on a buy what I need to finish the job, but I am starting to realise i need to catalougue everything I do have.
What happens if you were given the stock, or if it is damaged?

The information on here is great - after looking at one link, I have just discovered my husband can start paying less tax as we are married!:mf::mf:

[urbtaf]

If your given stock then the sale price is 100% profit.
As far as damaged stock, or throwing away useless stock, there are rules for dealing with this, but Im not up to date on them cos I never dump stock! theres always someone that will buy them, even at a loss. In aug I sold 1000 pairs of dimanti earstuds that had turned milky white with age, the guy only paid 5p a pair, but he was happy as he knows where he can get rid of them:)

[Knittynattynoo]

Hello I have been told several times by the jobcentre that I can not claim jobseekers allownace if I am self employed. When I phoned to apply for benefits the woman on the phone said that as I was registered disabled I could choose to have income support or jsa, I told her I chose jsa because I wanted help setting up my own business and she sniggered and said I can set up my own business anytime, thats not looking for work. I have also been told that if I do over 16 hours aweek work I lose my benefit even if those 16 hours are unpaid. It is only exempt from this if it is charity work.

I'm now looking for part time work so that I can get off benefits and register as self employed. But I've been unemployed for 11 months now since graduating so don't hold much hope!

[matt.chatterley]

I actually think this term HOBBY is extremely dangerous!!!

There is no such such thing as someone with a HOBBY having a website that SELLS their goods!!!

You are fooling yourselves if you think that way and are liable to prosecution!!

I would tread careful if I were you!!

DISCLAIMER: I am a computer programmer, (sort of) entrepreneur and semi-competent handyman. I am NOT an accountant or a Lawyer.

I totally agree with the sentiment here, however, I would suggest an addendum to avoid mass panic. If you are in doubt, consult an accountant immediately - most will give you a bit of free advice initially (if they won't, they don't want your custom - just your money - and you should consider a different one!).

If you make a few bits and pieces as a hobby, and sell them, but could make a solid case (no tenuous links) that you are not trading as a business, then you shouldn't have to register the business.

You SHOULD declare any 'extra earnings' against your capital gains allowance, and you MAY still have to register to do a tax return (tell the Tax Office that you have other income to declare).

This is how 'part time' ebay sellers have been advised to do things in the past. I would say the conditions to qualify, in my mind, are:

1. You do not have your own eCommerce site - clearly if you do, you've set up mechanisms to facilitate trading, and you are a business.

2. You are "normally" employed either full or part-time, and this is your main source of income.

3. You only spend a bit of time crafting to sell - difficult to assess. Clearly if you are spending all your evenings making things to sell - you're trying to run or start a business. If you knit one pair of socks a week and pop them up on EBay, you're probably not.

I think most folks on here have the intention of trading, to be honest, which is why I think the original advice is great - don't assume that just because you aren't making money, you don't need to jump through the right hoops!!! :)

[stephanie]

does anyone know of any business training courses to learn all this stuff? i dont mean going back to colledge but some type of short course or intro to starting in business.

[sparkysdad]

does anyone know of any business training courses to learn all this stuff? i dont mean going back to colledge but some type of short course or intro to starting in business.

www.businesslink.gov.uk is the best place to start.

You can speak to someone about all aspects of starting up a business, and through them find access to training, seminars and courses - mostly for free.

[Lydia]

I'm not sure where you are, but I went through business link - and someone from Venture Wales called me - I am getting access to a business advisor (free) and also a course on preparing a business plan, marketing and being self-employed (all free). WOrth a look!