Disability Means Business

A disabled person can apply for working tax credits if they are over 16 years of age, working over 16 hours and will be in business for at least 4 weeks. Most disabled entrepreneurs will qualify for these credits but often don’t apply, as they are worried that in the initial stages of business they will not be working for 16 hours. They think this because they only count the hours they are actually with a client. They should also be counting the hours marketing the business, going to suppliers, doing the accounts etc. All these tasks are included in calculating the total number of hours.

Before starting the business I would contact my Disability Employment Adviser or Working Tax Credits Department and ask that they to do an assessment of how much I would be entitled to. Working Tax Credits are calculated on either your income for the previous year or a prediction of your wages for the year of trading. Most people choose to have the calculation done on what they earned last year as in most cases, this will be the amount of benefits received and should make them eligible.

The amount of Working Tax Credits can vary, but in most cases it’s roughly the same as your current benefits. After you have been trading for a year on your WTC you will have to submit your earnings to see if you qualify for the next year. As most businesses do not make a profit in the first year it is likely that you will be able to stay on the WTC for another year. This will give your business time to get established before you have to take a wage from it. Read my article Working Tax Credits Vs Test Trading Vs Permitted Work to see which scheme could be best for you

Permitted Work is a scheme for people on incapacity benefit who wish to try working in a limited capacity. It was designed so people could see if they were physically or mentally capable to work without it affecting their benefits. For entrepreneurs on incapacity this could mean they are able to trade whilst still claiming their benefits, thus testing their idea whilst still having financial support.

Under permitted work rules it is possible for a person on incapacity benefit to work for up to 16 hours and earn up to £88.50 per week profit without it affecting their benefits. You may be able to stay on Permitted Work for 12 months and by then, you should be able to make the decision whether to go self employed full time.

£88.50 does not sound a lot to earn, but it’s worth remembering that’s £88.50 of profit per week! So in your first week you could have an income of £200, if you have costs or expenses of £111.50. £200 income – £111.50 expenses = £88.50. You expenses could be anything from rent, petrol, insurance, stock or phone bill.

Permitted work could be a good way to try out your business idea and give you time to build up your customer base. After the scheme finishes you could be eligible to join other schemes such as Test Trading to extend your time receiving benefits whilst your business grows.

For more information and to see if you are eligible for the scheme, contact a Personal Adviser or Disability Employment Adviser at your local Jobcentre or Jobcentre Plus office.

A question I am asked regularly by disabled entrepreneurs is “Where do I start?” The answer more often than not is with their DEA or Disability employment Advisor at the local Job Centre. Every disabled person who is not in work and is claiming Benefits should have a DEA. A DEA’s job is to help people into employment or in this case, self employment, so in theory they should be a fountain of knowledge on the subject. Unfortunately because the subject is so broad (deafness, visual impaired, dyslexia, mobility problems) it’s impossible for them to be an expert on every disability and know every scheme, Benefit and organisation who could help you into self employment.

Nevertheless they are a good place to start. I would arrange an appointment with one of them, tell them about your plans to go self employed and ask what support is available.

There are 3 questions I would ask my DEA;-

1. What business organisations do they know of who can offer you support?
2. What Government schemes/benefits can help you start up in business?
3. Do they have any grants available for business start up?

1. Business organisations

They should know business organisations in your local area who can help you, but it’s important that you do your own research on who else is out there. It won’t be the first time your DEA has been asked for self employment advice and they should have had dealings which other organisations offering business support.

2. Schemes and Benefits

Your DEA should know different schemes and Benefits you are entitled to when starting your business. Schemes such as “Permitted Work”, “New Deal Test Trading” and “Return to Work Credit” can be ways of receiving Benefits whilst being self employed.

3. Grants

Sometimes a DEA has a discretionary grant to help people into employment, which could be up to £300.00. Traditionally this grant was used to buy clothing such as a suit for a job interview or some safety clothes for a building site. Now DEA are allowing people starting self employment to buy items needed for their business.