Before starting the process of business start-up we need to think about money.
Firstly if you find your debts are getting out of control, thus affecting your credit rating and you would either like to seek help in managing them or find a route out of your problems via a debt-release programme, such as IVA (Individual Voluntary Arrangement), then contact the Debt Helpline for free advice. It is wise to be on top of fiscal matters before you start a business.
Secondly if you find you are unemployed or are in work (either employed or self-employed) less than 16 hours a week you may find you can claim state benefits such as Job Seekers Allowance and Housing Benefit. You can be registered as self-employed and gain benefits. Obviously this is not an ideal situtation and you must declare to your Job Centre Advisor what you have earned and how. The government are letting benefit claimants on all state related benefits including incapacity benefit earn a reasonable sum a week on top of this income. You may be quite surprised about this and it is worth contacting your local Citizens Advice Bureau or calling the Social Security Helpline Public Enquiries: 020 7712 2171
If you are unemplyed, find out from your local Job Centre whether there are Enterprise Schemes worth joining in your area. You may need to have been unemployed and claiming benefits for six months before you are eligible for such schemes, but do ask even if you have only been claiming for a short time. These schemes are not targeted at artists and have a general approach to delivering information. Trainees on these schemes can earn money whilst claiming benefits, acting as a stepping stone from signing on to trading status.
It is advisable to fill in your 'skills gaps' (see Step 1: Research) by doing some part-time courses before signing up for an Enterprise Scheme; while setting up you will discover a few other things you need to learn.
Thirdly if you are in work for 30 hours and over a week, for instance a mixture of employed and self-employed, you may find you are entitled to Tax Credits. These can be claimed if you income is low. If you are aged 25 + (with no children) you can claim Working Tax Credit. If you are 18+ either alone, with children or living as a couple you may find you can claim Family Tax Credits. To give one example you may be aged 25 and have no children, have a job for 14 hours a week, and be self employed (including research and making time) for 16 hours a week or over, then you would qualify for working tax credits. If your income is under £10,000 you may find you are entitled to an extra £20 a week.*
You can claim if you are single or as a couple, as long as one of you is a UK or EU citizen. If you are from a country outsied the EU, you may still be eligible, contact the Tax Credit Help Line to find out more.
*Note, if you are on benefits (e.g.Housing Benefit), speak to either your local Citizens Advice Burea and the Tax Credit Help Line for more detailed information before making a tax credit claim.
Tax Credit Help Line
Tel: 0845 300 3900
www.direct.gov.uk/doesitworkforyou
www.hmrc.gov.uk/taxcredits
National Debt Help Line
Tel: 0808 808 4000
www.nationaldebtline.co.uk/england_wales
The UK Insolvency Help Line
Tel: 0800 074 6918
www.insolvencyhelpline.co.uk/debt_solutions/iva.htm