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Starting a business while receiving LCWRA

bluefate

hi there.

So I’ve tried to understand from the forum what I need to know about starting a business while on LCWRA. But I have a few questions if it’s ok?

If my landlord doesn’t allow me to run a business from his home, how do I go about obtaining a premises because essentially my UC would be paying the rent/business rates etc or have I got that wrong?

Am I allowed to register for VAT?

Do I register as a LTD company?

What if the business is successful for say a month or 2 therefore reducing my uc to 0, but then nothing for the next few months or if I say to shut it down after 6 months, how would that work in regards to my uc?

thanks for your time. Sorry for the essay but I’ll probably have more questions haha

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poppy123456

UC will not pay the rent/rates on any business premises. You will need to pay those yourself but they are an allowable expense so you would need to put them down when you report earnings and expense each month. https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/business-expenses-you-can-report-to-universal-credit-if-you-are-self-employed#:~:text=You%20can%20claim%20running%20costs,business%20rates%20or%20council%20tax

You do not need to register for VAT unless your VAT taxable turnover is more than £90,000. https://www.gov.uk/register-for-vat

Can't advise about the LTD company but there's information here. https://companieshouse.blog.gov.uk/2018/05/15/what-does-it-mean-to-be-a-limited-company/

If your UC is reduced to zero your claim will remain open for 6 months. It will then close after that. If you reclaim after this then you will need to go through another work capability assessment.

If you start work you must report the changes. You will then need to attend a gateway appointment at your local job centre with a work coach. As you have LCWRA then the minimum income floor will not apply to you even after the 12 months start up period.

You will need to report all income and expenses on the last day of each assessment period. Do be aware though that if the work you do contradicts the reasons why you're claiming LCWRA then it could go against you when you're next reviewed.

bluefate

thanks for your reply poppy.

What I meant in regards to the business rent was, let’s say the rent is £2000pa, if my business doesn’t make enough to cover the rent, what happens then? Because the maximum I can save is £6000, do I need to save that before considering starting a business? I have credit cards but I’m not sure how a loan would affect my uc

The reason I asked about VAT is because the business I was planning on was buying and selling products and when I’ve looked at suppliers, they ask that I’m VAT verified.

Makes sense about the 6 months, thank you.

In regards to the gateway interview, I have chronic anxiety so I hate talking to people, even more so in small environment such as a job centre, my mum usually speaks for me, is this something that would be possible at the gateway interview?

The work I’d be doing wouldn’t contradict my claim cause I’d hopefully be working supervised in a storage unit packing and shipping products.

Thank you again

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