I was hoping to set up as a self employed book keeper in say 6-7 weeks and understood that I would a/ have to qualify and b/ accept low income to start with.
I did think I would be able to claim working tax credit as I built up the business but the comments on this thread worry me. Is this sounding the death knell for newly self employed people?
Somebody mentioned registering as a limited company but I cannot see how that would help. Monies taken as income rather than dividends would surely have the same requirements as the wtc/uc and zero dividend or income would signal no access to wtc/uc as well.
I can survive for a short while with no income but over the year, I was hoping wtc would provide a useful top up., I would be most grateful for some clarification on how it affects a proposed start up like myself?
-- Edited by vimes on Monday 28th of July 2014 06:12:02 PM
My understanding is that you can put down the hours you are self employed (I would include marketing the business, not just doing the fee producing productive work) on your tax credit form. I'm not sure how many hours you need to do, something along the line of 30 I guess, to be eligible for any payment.
You do not need to qualify as a bookkeeper to offer bookkeeping services, however there are a plethora of terrible bookkeepers out there and unless you know what you are doing I would not want to see another taking money off people without knowing the job (that is not to say that unqualified bookkeepers are all bad, far from it). You would need to get registered for money laundering with HMRC and think about getting professional indemnity insurance. Don't for one moment think that just because you are offering bookkeeping services that there will be a host of business people thinking 'thank goodness for that, that's just what we've been crying out for'...there will not be, I'm afraid, a stampede to your door...getting the clients is often the hardest part, especially for an inexperienced new start up. If you have friends and contacts in business then you may get a decent start but if you are going from a standing start then expect very little in 6 or 7 weeks, so your acceptance of a low income to start is dead right. What kind of rate were you thinking of charging, what services will you be offering and what part of the country are you in. I think there is a bit of a north south divide and although the more innovative of us on here (like Kris and Mark in Scotland) may buck the trend unless you know your point of difference you are a commodity and may have to get work in based on price alone...problem is, there is always someone cheaper!
However, it isn't all doom and gloom. It can be a really rewarding profession in more ways that financially. So I wish you the best of luck!
If you want to start in 6-7 weeks, and you need to register for MLR with HMRC, send off the form now, as it will take them about that time to deal with it. If you are registering with one of the professional bodies I've no idea how long it takes. But you must register with someone.
You don't have to be qualified to do the work, but if you belong to one of the professional bodies they have rules about what you can or can't do.
You earn very little in most businesses to start with. That's how life works!
As far as WTC goes, as long as you put in the hours, it doesn't matter how little you earn. With UC, when it starts, you have a year to get your income up to the required level, then it seems that you need your receipts to exceed your payments every month by at least 30 hours a week at the minimum wage.
I think a limited company would cost more to run, and wouldn't have any advantages on an income so low you have to worry about qualifying for UC.
I would definitely advise against a Ltd Company until you are earning enough for it to benefit you.
You can claim working tax credit as long as you can show you're doing the hours needed to qualify. As Rob said, marketing the business can go towards it. If Universal Credit you will be ok for the first year, then you will be deemed to be earning the minimum wage, even if you're not.
So when do Universal Credits start then?
I'm applying (soon) for Working Tax Credits - when are they going to be replaced?
If I have a year from when they start + whenever they actually start I should hopefully be up to about that level anyway.
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Never buy black socks from a normal shop. They shaft you every time.
Phased in from 2016 I think Peasie, if they can get the system to work! Or even if they can't I suppose! I think the first year is for new businesses, not existing ones at the changeover.
Don't forget that it's not just about working the hours and earning at least the minimum wage. It's based on monthly reporting of receipts and payments, not on profit. So any month where you make a decent profit, but buy in stock or fixed assets, your business could be deemed to be unviable and you have to look for a job or have your benefits stopped. Even if you're very busy earning a reasonable profit.
I have no intention of starting up and offering book keeping until I get the qualifications -I would not put myself and clients at risk knowingly.
I had not got so far as costing my services because I needed to choose the best "qualifications" (I have placed an enquiry about most appropriate choice on another thread today as well) for me and then do some intensive study, draft a business plan, and go from there.
I am based in Greater Manchester also quite near West Yorkshire and East Lancashire.
So when do Universal Credits start then? I'm applying (soon) for Working Tax Credits - when are they going to be replaced? If I have a year from when they start + whenever they actually start I should hopefully be up to about that level anyway.
It should have been October 2013!! with those already on wtc being slowly moved over to uc bit by bit over a 2-3 year period from 2014. However it's proved to be a logistical nightmare and may well end up being scrapped (with a bit of luck!) At present (from what I can glean) it's available in 10 areas http://en.wikipedia.org/wiki/Universal_Credit
If you're already on wtc and they switch you over to uc then you are exempt from reporting your monthly income/expenditure for the first 6 months.
Whilst wtc isn't perfect, it's a d*mned site better than the new uc, which will be an absolute nightmare, and unless you know that you can reasonably make profit of c£1000 a month, it won't be worth going self employed unless you can support yourself in the meantime.
Phased in from 2016 I think Peasie, if they can get the system to work! Or even if they can't I suppose! I think the first year is for new businesses, not existing ones at the changeover.
6 months from changeover, from what I have read.
Don't forget that it's not just about working the hours and earning at least the minimum wage. It's based on monthly reporting of receipts and payments, not on profit. So any month where you make a decent profit, but buy in stock or fixed assets, your business could be deemed to be unviable and you have to look for a job or have your benefits stopped. Even if you're very busy earning a reasonable profit.
I wasn't aware of that. I assumed you reported your income and expenditure (sort of like a monthly profit and loss) and they take your nett profit as your net "wage" and if this is under the minimum wage, tough, you will have been deemed to have made that much at least.
I read through all the stuff on gov.uk about it a few months ago, and it set it all out very clearly. It's all part of the "service" to make life simpler for people. Except of course, it simplifies reporting to them, but creates a cashflow management nightmare that far outweighs any simplification to the poor victims! I would post the link I saved, but it doesn't work any more, so they may have changed it all by now!
I can imagine the scene between two small traders both on UC:
Trader 1: "Can you pay my invoice today please, as it's the last day of the month and I'll lose my UC if I don't receive some more money."
Trader 2: "Sorry, I can't do that. I'll have to pay you tomorrow, or my payments will be too high and I'll lose my UC."
Trader 1: "Can't we fiddle the numbers so we're both OK?"
Trader 2: "Last time I tried that, the HMRC storm troopers dragged me off for interrogation and I was fined a fortune. It destroyed my previous business, I lost my home, and my wife left me. I'm not doing that again."
