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Anyone from Britain here? Are freelancers entitled to working benefits?

mrdanielprice
Community Guru

I am currently working a day job and receive Working Tax Credit because I am on such a low income. I get something like $400 - £450 per month because I'm earning £3.30 (it's an apprenticeship) per hour, working 30 hours per week.

 

If I found enough work to quit my day job and go freelance full-time (or even just part-time, working at least 16 hours per week), would I be entitled to Working Tax Credit to topup my income if it's below a certainthreshold.

 

And, if I did so and found myself unable to get work, would I be entitled to any other kind of benefit that would help me out financially?

 

I'm just curious and would like to know a little more before putting my financial wellbeing in the hands of clients (rather than a company I know will pay me X amount per hour for X hours per week). I will, of course, get some advice from someone who works for the DWP if/and when I decide to take the plunge, so I won't be taking any advice/info as definite, factual information.

 

TL'DR: I won't be coming back saying, "You told me this and now I'm screwed. It's all your fault."

 

I'd much appreciate any information anyone has to offer. All I ask is that this thread stays focused on the benefits and not my decision to work as an apprentice or that I'm not a full-time, no day job freelancer.

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Hi Daniel, I see that you have had a few on-topic answers here but, as someone else said - it might not be be the best place to ask.

 

I'm sure you've seen this but, just in case you have not: https://www.gov.uk/working-tax-credit/eligibility - eligibility questionnaire here: https://www.gov.uk/qualify-tax-credits

 

You could ring HMRC and ask. Honestly, I have been part-employed, part self-employed for years and got quite confised a few times - they are pretty helpful (once you manage to get through to someone!)

 

Or try the forums at MSE (moneysavingexpert.com - there are plenty of very knowledgeable people there (and some very judgemental ones - but you should be able to get the information that you need)  🙂

 

Good luck!

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16 REPLIES 16
prestonhunter
Community Guru

Nobody is entitled to anything.

Hi Daniel,

 

You might find this link helps answer your question: http://www.revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/self-employed/

 

Preston, here we have a honest person who is trying to not defraud the welfare system in his country, (plenty of freelancers claim benefits and earn Upwork income secretely, affecting both honest freelancers and the welfare system) so unless you have the faintest idea what people ARE entitled to under the British Welfare System how about you refrain from adding non-information / false information / a philosophical viewpoint?

 

 

 

 

The original poster explained his question very well.

 

I knew he was referring to the British welfare system and I am aware that there are legal entitlements in that system.

 

You are quite correct: My statement was absolutely a philosophical viewpoint.

 

But I will be happy to concede that a discussion of why nobody is entitled to anything, in a general sense, can be considered off-topic and needs not be discussed in this thread.

But surely you'd agree Preston that everyone in a developed country is entitled to a certain standard of life? The cost of living is much higher here than in your own country, and it can be difficult to even subsist for low-paid workers. Anyway, his tax credits will be refunded by his taxes when he becomes more successful, are people 'entitled' to roads, police etc. or are they an essential part of a civilised society?

Ramon, I actually do favor quite a few minimum standards and guarantees, even beyond general public services such as roads and police. I favor things including plans through which basic health care (and particularly catastrophic care) is available without any need for private health insurance, an idea often implemented through a "single payer" system. I think certain minimum subsistence income plans have been successful, including plans such as those in Brazil where minimum monthly income is provided to low-income families on the condition that their children attend school. I like the idea of guaranteed employment plans, such as workfare. But I am also aware of the intractable damage that poorly executed and overly dependence-inducing welfare plans have wrought among so many segments of American society. The unchecked, unchallenged largesse of such plans has little impact among the highly-educated, highly motivated and upper-income. But it has perpetuated, dehumanized and expanded an unfortunate underclass.

 

So while I personally support a number of sensible "social safety net" programs, I nevertheless am a strong supporter of the general philosophical principle voiced by many before me that "nobody is entitled to anything."

 

This is a credo for personal success and a wise guiding societal principle that may be followed even while advocating for the availability of minimum government-provided services.

 

If I think very realistically about societal, economic and technological trends, I can easily imagine a near-future status quo in which most industrialized "Western" societies provide a minimum subsistence living for everyone, leaving every individual in the position of deciding for themselves to whether or not to work and earn more than that, or not. Under such a system (which I am not necessarily saying would be the best thing for society, but which may well be out future), there would be no income-based standards for allocating benefits. These minimum benefits would be available equally to everybody. So nobody would be "cheating the system" if they chose to work on Upwork or did any other kind of work. In such an imagined future, online work platforms such as Upwork,are even more important, as work increasingly becomes a lifestyle choice rather than an economic necessity.

The Dutch are running an interesting experiment where they are giving people around $1000 a month as a basic income.

 

They are doing it becasue there is a belief that giving someone a safety net like that, contrary to the view that it would make people 'lazy', would in fact have the opposite effect and allow people to create their own business, look after children at home (if they so choose) and take up part-time jobs more easily. They are seeing very positive results and I believe the project is expanding.

 

We all have to live in society together. Not everyone has a good basis to start from, for all sorts of reasons. Our current systems leave much to be desired and looking for alternative ways of living is a good thing. I for one am proud to live in the UK where we have a benefit system that gives a reasonable saftey net (not as liberal as the Dutch one, by any means). Some elements of the UK government are trying to remove the in work benefits -this would have dire consequences for all sorts of professionals (yes professionals) who work, but get very poor salaries. Yes, in a nice fair world, they'd get a fair wage, but that isn't always the case. The UK is working towards a 'living wage' rather than a minimum one, but thats a way off.

 

To your question Daniel. I know people who work in the craft industry as self employed, who have intermitent periods of poor income and they claim benefits - I also know that they struggle sometimes to get them and it's not automatic. You're right to take advise, self employment is a complex area.

 

P.s. just remembered another friend which may possibly give insight. She has created a travelling exhibition around civil rights. Her funding is intermittent and often she can't pay herself a salary, but really wants to continue to take her work across the country (she is able to employ other people through this work too, but can't pay herself). She was advised that she cant get benefits as she isn't available for work. Not entirely comparable to your situation, but might give insight into the 'available for work' rule.

 

But he isn't unemployed, he's just not earning enough to live on. Quite why he's working at less than half the legal minimum wage is another question entirely.


@Ramon B wrote:

But he isn't unemployed, he's just not earning enough to live on. Quite why he's working at less than half the legal minimum wage is another question entirely.


 He's getting paid the legal minimum wage for apprentices, which is clearly not enough to live on.

battershall-ramo
Community Guru

Anyway, Preston's quite right though. I used to be unemployed and I soon became really depressed and isolated and it really impacts on your self-esteem. It took me a long time to snap out of it, but now I can't imagine not spending my week days on purposeful activity (or at least editing things)

Sorry for the offtopic.

I recently moved to UK and I find this benefit system as being heaven on earth. It is the best idea ever, there are so many people who want to do something, but maybe life isn't exactly giving them the best at that moment.

You are overdoing it a bit in some cases, but generally, it's the best idea ever.

There are places in this world where you don't get anything. If you find yourself unable to pay rent and jobless and you have no family/friends to help you, you're pretty much doomed to live on the streets. Nobody cares. You don't have to be stupid, lazy or hate work, sometimes it just happens.

chris_macartwork
Community Guru

Hi Daniel,

Honestly, this is not the place to be asking those questions. You can see the thread has been overtaken by the 'benefits entitlement issue'.

 

The only advice I can give is don't put all your eggs in one basket. And before you go completely self employed - build up some capital in reserve to use for smoothing out cash flow in the first weeks / months / year. Making a living from freelancing alone is definitely possible. It requires total dedication and committment, ...and be prepared for the unexpected.

 

Don't forget - people on Working Tax Credit will be moved on to Universal Credit soon. 

marciamalory
Community Guru
Getting back to the original question, the money you earn from Upwork counts as income from self employment. Whether or not you are entitled to Working Tax credit will depend on your total income and the number of hours you work, just as if you had a 9 to 5 brick and mortar job. I'm not entirely sure how things will work after the switch to Universal Credit.
marciamalory
Community Guru

Preston, FYI, Working Tax Credit is basically the equivalent of Earned Income Credit in the US. The difference is that in the US, it's included in your tax return; in the UK, you have to fill out a separate form. 

Thanks for your responses, everyone. Very helpful and appreciate you taking the time to comment.

 

Using their calculator, it seems I would be entitled to Working Tax Credit (or Universal Credit, whenever that's fully put into place).

 

Is there anyone here who is currently in receipt of it as a freelancer? How do they calculate how much I'll get each month when I might not work the exact same amount of hours per week and won't be earning a fixed amount per week, month, etc?

 

Obviously they know how much to pay me because my day job pays me the same amount each month and I work the same amount of hours in that time, so what happens when those two factors might fluctuate (potentially wildly)?

I imagine the UK gives you a ceiling. As an apprentice you earn X, you are allowed to supplement this  by Y. If you go beyond this then you will have to pay tax (or pay back) on your apprentice earnings.

 

Not so long ago, I was in a similar situation. I had a carers allowance of X per week. I also worked as a part-time proofreader - paid monthly. What I did not realize that my earnings as a proofreader were not assessed on a yearly basis, but on a weekly basis. I ended up having to pay back a considerable amount of money, because I had exceeded the + allowance allotted to me weekly. It's complicated . . .

Hi Daniel, I see that you have had a few on-topic answers here but, as someone else said - it might not be be the best place to ask.

 

I'm sure you've seen this but, just in case you have not: https://www.gov.uk/working-tax-credit/eligibility - eligibility questionnaire here: https://www.gov.uk/qualify-tax-credits

 

You could ring HMRC and ask. Honestly, I have been part-employed, part self-employed for years and got quite confised a few times - they are pretty helpful (once you manage to get through to someone!)

 

Or try the forums at MSE (moneysavingexpert.com - there are plenty of very knowledgeable people there (and some very judgemental ones - but you should be able to get the information that you need)  🙂

 

Good luck!

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