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.
Province/Country relating to question: UK
HiThank you for your question and welcome to Just Answer. I will try to help with this.In a nutshell you will still be entitled to housing benefit. That depends on your income not your activity.But your job seekers allowance would almost certainly be cut depending on the number of hours you work. If you have set up your own company then you will be working at that and the view of the DWP will be that you are no longer available for work and so not eligible for JSA.Housing benefit does not work in that way however. It depends on your total income not your working hours.Hope this helps. I would be grateful if you could please rate my answer and provide quick feedback. If necessary, I can then provide further advice and guidance as required and answer any specific questions you may have. Thank you
Thankyou for your answer which goes some way toward providing me with a complete understanding but could you touch upon working tax credits as it was mentioned in the question?
You would be eligible for working tax credits depending on the number of hours you worked whether or not you are self employed.
Bar Exams, over 5 years in practice
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).