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Benefits advice if you're self-employed

Benefits advice if you're self-employed

How we assess your self-employed income when you apply for Housing Benefit or Council Tax Reduction, tell us about a change to your business

If you’re self-employed and want to claim Housing Benefit or Council Tax Reduction, we need to look at your income and expenses from your self-employment and any other income or capital you or your partner have.

How we assess self-employed income

The income we use in our assessment is your net weekly profit. This starts with your total income minus any business expenses which are allowed for benefit purposes. These may be different from the expenses given on your accounts.

Then we subtract the relevant tax, national insurance and half of any pension contributions.

The income used for benefit purposes may not always be the same as the figure on your accounts or from HM Revenue and Customs.

Find out more about expenses if you're self-employed on GOV.UK.

Child minders

The income of self-employed child minders is assessed in a specific way. We don’t take into account any business expenses for self- employed child minders.  Instead we work out net profit by subtracting tax, national insurance contributions and half of your pension contributions from one third of your gross income.

Evidence you'll need to provide

You'll need to provide your accounts for the last financial year, or for as long as you've been self-employed if this is less than a year.

If you have only just started your business we'll need you to estimate your earnings and outgoings for your first 13 weeks of trading.  After 13 weeks we'll ask for your actual accounts for this period and reassess your benefit entitlement.

We may need extra evidence like receipts for expenses and invoices, if so we will write to you and ask for this.

Find out how to send evidence to us.

Changes to your business

Income from self-employment is normally re-assessed annually and used in our assessment for the following year.

For example, if we looked at your accounts for the financial year 2014 to 2015 we would normally use this income in our benefit assessment for the financial year 2015 to 2016.

However, if your self-employment has a substantive change then we may want to re-assess your entitlement within a financial year.

You must tell us about changes in your self-employment; we will then decide whether this is a substantive change and whether we need to look again at your income from self-employment.

The sort of changes you must tell us about include changes which will have an impact on the income of your business. Things like:

  • the loss or gain of a major customer
  • a significant upturn or downturn in business
  • a change in the nature of business

We’ll write to you explaining what evidence is needed if you have had a change in your self-employment (this is likely to be details of your income and expenses since the change).

Tell us about a change in circumstance