Starting a business on a low income
When I start trading, even with my part-time job, what if I hardly make any money? How will I pay my rent?
If you are claiming benefits before you start trading, and/or have a part-time/full time job, you should enquire directly with your local Job Centre and Housing Benefit Office to see if they will continue to pay you ‘Extended Payment of Housing Benefit‘ which usually lasts for a month after you have signed off and started trading or taken a job.
If you have not claimed this benefit before, you may be entitled to it. You will have to visit your local Housing Benefit office or apply online via your local council’s website you will need to submit the form with a number of documents, such as your working persons tax credit calculation (if eligible), accounts, payslips, bank statements, sometimes they ask for a profit and loss account if you have been trading for a year and also a copy of your last tax return (aka self-assessment form) if you have one.
If you have filed a tax return, take the correspondence that HMRC sends you with you to your local Housing Benefit office as this can be helpful to them when assessing your claim. Claims can take months to sort out so be prepared to wait. It has been possible in the past to run a business for a few years claiming full or partial Housing Benefit/Council Tax Relief – current changes to benefits make this less likely but not impossible. Housing Benefit is not a taxable form of income, so it does not count against you in any way if you need it claim it.
If you are struggling or have an ad hoc income then keep your eye out for news about what is happening to the benefit system. Many artists and designers do not claim any benefits, but most creatives have at some point in their careers signed on, completed a government enterprise scheme or claimed Tax Credits or Housing Benefit as they have got going.