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Becoming self-employed while a carer. Effect on benefits. - Carers UK Forum

Becoming self-employed while a carer. Effect on benefits.

All about money
Hello there,

Currently I am a full-time (as in can't really leave the house) carer for my mother.

I receive Carer's Allowance and Income Support to top up my carer's allowance.

During my time as a carer I've tried to keep my mind active. I've written a book, which I've shown to a few people, one of whom is a professional editor, and the consensus has been I have some talent and I should consider releasing them.

I understand that in order to do this I need to register as self-employed because the DWP would class it as work. I would still be a full-time carer, of course.

My concern is that I can't afford to lose a penny of my benefits. I have debts (partly due to personal idiocy, I'll admit that) and between the repayments of the debts and the household expenses, things are very tight.

I understand I can receive Carer's Allowance and earn £102 per week. But does anyone know how this will effect Income Support and what I need to do? What I've found online has been confusing and rather demoralising but it all seems based around the notion I'll have a fixed income, which I won't. I might not sell any books, or I might sell a hundred thousand and be able to stop all my claims (I can dream, right?).

But assuming a middling level of success, I might sell several hundred over a few months and then very few from then on. I have absolutely no issue with reporting my earnings to HMRC and the DWP, I'm not trying to avoid tax, nor claim anything other than what I'm entitled to but I cannot afford to have my Income Support cut without having something else to make up the extra and one short novel probably won't cut it.

I feel that I'm at a stage in my life where I need to do something. I obviously won't be a carer forever, and I am fearful of what the future holds. I've been a carer for a decade, have little in the way of employment history, scant qualifications and every day that goes by I just feel more and more pressure to get somewhere. I feel this might be my opportunity but as I know so little, I fear it runs the risk of burying me permanently if it all fails.
Micro-businesses are a pain, and most authors earn very little from royalties or advances. Take expert advice by all means, dont take my word for it, but my suggestion is to register as self-employed as soon as you have any cheques coming in to your free business (nb not personal ) account, and unless you are making big money, aim to spend it all on business-related stuff like office furniture, lunches with your publisher, petrol, phone bills, and a nice new computer so you don't actually make a profit. I personally wouldn't notify the DWP unless I actually earned any 'profit' on my work.

If you do (eventually) make a profit, just pay yourself exactly £102 a week from your business account to your personal account, unless you have a private income you will not have to pay any tax or National insurance as you will be below the threshold, that keeps your carers allowance coming in but you'll lose your income support at some point of course.
Would that not be legally questionable though?

It strikes me that there must be some system that could tell that someone registered as self-employed with HMRC was also be in receipt of Income Support.

I know that the money itself isn't going to be very good. It is the type of business where your earnings are tied to making more content available and building up a following, all of which takes time. The first £700 I make are already swallowed up in editing and proof-reading expenses.
No, because the two things are unrelated. Being self-employed by itself means nothing apart from having to fill in a simple, annual tax return, in which you list your earnings and expenditure. After all, most businesses (and as a sole trader, that is what you are running) don't make money for the first two years, and think of your work as a business, not a job, a business that can go bust or wind up. The earnings don't belong to you, they belong to the business, until such point as you choose to pay yourself a cheque. So it is separate.
By the way, do be careful of publishing scams. Some companies make their profits from budding authors, even charging them fees up front (you mention £700, why should you have to pay their expenses and promote your own work?)

http://www.writersdigest.com/forum/view ... 61&t=70621
Easiest thing in the world.
If you want to self publish, then publish yourself.

There is really no such thing as a "self publishing company". Think about it.

Don't get involved in vanity presses or subsidy publishers or any of that crap. DON'T pay somebody to "self publish for you". Almost anybody who advertises publishing is running a scam.
Anybody who charges up front to put your book out then keeps any percentage of the sales is a total scam.

Publish your ebooks on Kindle and SmashWords. These are most powerful "stores" for ebooks, easily accomplished even by first-timers, and do not charge a cent for putting your book in ebook form and up for sale.

For print books, your hot setup is probably CreateSpace. Lulu is easier to do for beginners but shaves your profitablity. Many use special capabilities of Lulu such as hardbacks and color photo books. Lightning Source (also called LSI) is the largest POD publisher in the world (and where most POD companies actually produce their books, then mark them up) but is extremely difficult for beginners and one-timers, and will cost around $200 in setup fees and ISBN to put a book out. It's very useful for professional publishers, but not for newbies or people only doing a couple of books.

There is nothing wrong with POD. The use of "POD company" to describe a finance model of vanity/ripoff is inaccurate and harmful. It merely means running books off as ordered, rather than in batches by offset or other print process. Think of it as like Xerox. Unit cost is higher, but you don't have to put in a bunch of startup capital: the customer pays for production.

It really, really is that simple. Do it yourself. Stick to those companies and don't get sold by sharks. If they are coming after you, run. Don't go with people who advertise for writers. (Think about that--advertise for writers????) Don't even THINK about paying anybody who offers to send you a brochure.

Start free accounts with Kindle and CreateSpace and Smashwords and start fooling around and learning.
Okay, thank you, and apologies if I sound a bit dense on this subject. I'd never really considered running a business/being self-employed and I want to make sure I'm doing everything legally.

So if I've got this right, the plan would be to register self-employed and set up a free business account. Continue receiving benefits as normal, although I imagine when it comes to the self-assessment form I'd need to report my benefits as income? And I wouldn't need to report this as a change in circumstances to the DWP?

The £700 is the cost of having the book edited and proof-read by a professional, who also happens to be a friend. He's doing the work on the basis that as I cannot afford to pay him for his work up-front, I can pay him out of money received from book sales.

The actual publishing side of it would be handled by myself. His work is purely ensuring that the manuscript is up to scratch before I actually publish it.
HMRC did a brilliant booklet on what you can claim as expenses. Heat and light in your room, for example, phone calls, paper, ink, etc. etc. can all be claimed. When my husband ran a business he had a spike to put all his receipts on, just a 2" square block of wood with a nail driven through. Then at the end of the month, all I had to do was put them in date order, and write them up. Losing a receipt when you are self employed is like losing money!!!
Hello bowlingbun. Thanks. I've been looking at a few lists of what can be classed as expenses for business purposes and there does seem to be a reasonable amount. My editor friend has been drilling home the importance of keeping hold of receipts as well. :)
That's right. I have never felt better off than when running a business which didn't make any profit, :roll: :lol: LOL
I echo all the warnings about scams that part you from your money for the privilege of 'publishing' your book!!!!

As Scally says, absolutely anyone can self-publish, no need to pay for that outside paying for particular tasks within the publishing process, eg editing/setting/printing/binding etc (though I'd say that although getting a professional to edit and proof your first opus magnus is fine, after that you should be able to do your own!). Each of us could, if we wanted, pile up a mountain of books in our garage!

The key use that publishers have is to SELL our books! And, again, if you self-publish, that's something you take on yourself anyway.

As for tax, as you know, you'll have your annual tax free personal allowance (currently pushing towards £10k, which is pretty good when you first get started in self-employment). You can also, so I believe, roll over losses for a year (or more?), which also gives you a shelter from tax, and possibly even get more shelter by having the date you 'make up your books' such that any profits are spread across two tax years, and therefore may squeeze into your PA, rather than take you over that into the dreaded tax zone of 20%. (Timing can be all when it comes to tax!)

Look out for National Insurance, which I THINK may be payable from the off on all profits, irrespective of whether you are still under the PA tax threshold - Class 4 NI runs at 8% so is 'nasty'!

You may also have the option on registering your office premises in your house as business premises, and so avoid council tax on them - BUT you then get 'stung' if you sell the house! Might be best to avoid this for the time being?

Overall, please be VERY careful about 'spending money to make money' in general - it's hideously easy to find you've forked out loads of dosh, and bring in very little (general point re scams etc!). I would, if I were you, 'set aside' a sum of money to 'launch' your career in publishing, and husband it ferociously - do NOT spend more than what is in that 'launch fund' unless you have earned it elsewhere. Just like stockbroking, the easiest way to make 'a small fortune' out of publishing is by starting with a large one......(eek!)

It's interesting what Scally says about free business accounts - I never found one and refused to pay for one, so only ever used my own personal bank account. However, if you can find a free one, great - even if not, because of your carer/benefits situation definitely open a separate personal account (ideally at a different bank?) which becomes your 'business' account, ring fenced from any personal spending.

Final point for now - if and as you do reach the glorious situation where you make enough profits (sales minus costs) to go into the Tax Zone, PLEASE do a rough calculation of the tax you are likely to pay on those profits, and PUT THAT ASIDE in another bank account specdifally for that purpose! Honestly, you'll be glad you did. There is nothing 'nastier' than receiving a tax bill for money YOU'VE ALREADY spent!!! (I speak from the heart on this one!).

This is really important, because if your publishing career takes off, as I do hope it does, you will make the hideous discovery that the taxman likes to do something called 'Payment on Account' - this means that every year you fill in your tax form (paper forms due by end October, and they calculate the tax for you, online by end January and you have to calculate the tax yourself!)(they check it, by the way!), the tax man will 'assume' that the following year you will make whatever you make this year - and send you the tax bill for it!

Payment on Account is the taxman's way of trying to replicate Pay as you Earn - where tax is deducted before you are paid your salary! - for the self-employed. As you know, we don't actually have to pay tax in the year we earn the money - but the taxman likes us to (!) so that's why they do the payment on account stuff. It's a total pain, because the next year, when they realise that you HAVEN'T made exactly the same amount of money as this, they then have to RECALCULATE your tax (already paid in two slices, end Jan, and end July, as part of the wretched Payment on Account) and you receive either a repayment or, worse, an extra demand, depending on whether you made more or less than the previous year. The whole thing is a total pain - be warned!

All the very very best with it, and do set aside enough time to 'run' your business (eg, all the tax stuffy above) rather than only doing all the 'creative' stuff. Many creative folk are scared of the business side, but don't be - and don't pay anyone else to do it for you! You should be in charge of your own finances. :)

Good luck, and happy writing! Jenny

PS - if you publish online, watch out for piracy - endless 'free downloads' of your work are all too frequent, sadly...... 'Making money online' is a whole different ballgame....