If you are living in the UK and claiming disability benefits, you might have heard of Permitted Work. This is a scheme which allows disabled people claiming certain benefits to try out employment for up to 16 hours per week and earn no more than £99.50 without it affecting any benefits. As most people know, the rules for claiming benefits, the rates and types of benefits are constantly changing, especially at the moment as the government works towards the Universal Credit system. This website has some good info about which benefits qualify for Permitted Work and has some up to date information about it:
For a lot of disabled people even a small amount of work outside the home is at best impractical, and for others impossible. Working from home with flexible hours would be a welcome opportunity for many, but the help to find it isn’t exactly abundant. Self-Employment is risky, but with Permitted Work it is a viable option.
I’ve recently started Permitted Work, but it took a long time because it wasn’t very easy to find anyone who knew much about trying Self Employment with it or how it worked. In fact a lot of people didn’t know you could try Self Employment with it and thought it was a mistake or I was confusing it with the New Enterprise Scheme.
If you’re like me, you want to know as much as possible beforehand, it’s frustrating thinking you know something only to come across another hurdle at every stage; forewarned is forearmed and all that.
Although the rules for Permitted Work and the different benefits all seem to be the same, my personal experience is of Employment Support Allowance and Permitted work. I can’t claim to know for definite how it works for other benefits, especially those where claimants have other sources of income, and filing tax will be a bit different. Also, each small business will be different and you might need start up loans and have large expenses, so please just use this as a guide.
To apply for Permitted Work, you have to fill in a very simple form called the PW1 form. You can get this from the Job Centre or your personal adviser. This link goes to a PDF image of the form. The form is worded more for people trying employment but basically just asks for your personal info; if it will be self-employment; the name and address of the employer or company (you); job title; brief description of duties; when the job begins; how much you will earn; how many hours you’ll work each week and whether this varies; and when you will get your first payment.
Make sure you put the current permitted wage limit (£99.50 per week at the moment), and that you will be working less than 16 hours.
Send the form in at least 4 to 6 weeks before you want to start trading. Put this date on the form where it asks what date the job will begin.
Enclose a business plan or a detailed description of what the business will be and how you want it to grow. Business Link can send you some really good PDFs about how to plan for your business and write a business plan. https://www.gov.uk/business-support-helpline
And the Business Link website has some good advice: https://www.gov.uk/browse/business/setting-up
Open a business bank account. If you want to do online banking this could take a few weeks to set up because of safety measures. If you will be selling online/accepting payments online, tell the bank this and ask for a debit card so you can set up a business PayPal account. You might have to regularly deposit small amounts of money into the business bank account to keep it ‘active’ until you start trading. Remember to keep a record of this.
Phone the Benefits Agency on or around the date you said you wanted to start to see if you’ve been accepted. I didn’t receive a letter telling me I had, I don’t know if this is standard or an oversight.
If you have been accepted, ask the Benefits Agency to submit a PW10 form to HMRC.
Go online to register for Self-Assessment with HMRC. You will get registration numbers, a government gateway account number and then through the post, an activation code. This will take a few weeks so keep a record of all numbers and passwords etc. so you don’t lose or forget them.
Writing a business plan
There is no set way to write a business plan, but remember it is as much for you as for anyone else you need to send it to. You can always do alternate versions, for example a more detailed one if you need to apply for financing, and a simpler one to send with your PW1 form.Here is an example of a Business Plan, and what each of the sections requires.
In my next post I will talk about keeping accounts.