I am currently unemployed and thinking of starting up my own Limited company. I am currently in receipt of Job seekers allowance and Housing benefit. At least in it's incipient stages I don't expect the business to make a massive turnover/profit in the first few months but with reputation and referrals that will change (hopefully.) My question is this. I believe when the company is created and I become a director my status will change from unemployed to employed. I will still have to pay my landlord rent and still manage overheads. Will I still be entitled legally to Housing benefit? will it be at a reduced rate? I understand profit will come into the calculation but if my business makes none for the first year surely that's taken into account and can I qualify for working tax credits to support me until the business picks up?

I'll give you some details about the nature of the business. I've got a Bachelors degree in computing and lost my job some time ago. I've always wanted to do like a local PC repair business. A friend of mine also visits auctions a lot and buys and sells stuff from them on Amazon and eBay and he wants to become a director of a company with me and look into fixing PCs for businesses and domestic clients and also the business would encompass things like the buying and selling of stock and with a future option to look into providing training courses into the use of computers. At first the number of jobs will be small - certainly not providing enough income for me to live off of.

It is my intention not to scrounge or reap benefits to which I am not entitled but to sustain my existence during the upcoming period of expected low income I am forecasting.

Optional Information:
Province/Country relating to question: UK