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Council Tax Benefits & Self-Employment

Find out how self-employment affects claims for Council Tax or Housing Benefit.

You are able to claim Housing Benefit and Council Tax Benefit if you are self-employed and on a low income. If you pay your own income tax and National Insurance contributions you are classed as being self-employed. If you are a director of a company, then your earnings from the company will be counted as income and your share of any dividend.

In order to assess your entitlement for either benefit we will need to see evidence of your income. If you have just commenced your self-employment we will ask to see a projection of what you think your earnings will be in your first three months of trading.

If you have been self-employed for some time and have your most recent audited accounts we will base your benefit on these, if you do not have audited accounts we will ask you to provide your income and expenditure details from your own records for your most recent years trading figures.

We can provide you with a pro-forma to assist your calculations and we may ask you to provide some receipts to support your entries on the pro forma. We will accept your own records if they are presented in a clear way which will enable your annual income to be calculated.

Processing

We work out your total income for the period and deduct any allowable expenses, notional income Tax and National Insurance liabilities.

Deductible Expenses

• Purchase of stocks and supplies 
• Manufacturing materials and goods for resale 
• Carriage, packing and delivery costs 
• Employees wages and employers NI contributions 
• Hire, hire purchase and leasing charges 
• Subscriptions to professional and trade organisations
• Legal fees and accountancy charges 
• Bank charges for a business bank account
• Business travel and hotel expenses
• Capital repayments on loans used to replace equipment or machinery 
• Capital or income spent on the repair of existing business assets (after deducting any insurance pay-out) 
• Interest payments on any business loan 
• Proven bad debts and expenses incurred in the recovery of these 
• Cleaning and protective clothing 
• Advertising, telephone, postage 
• Fuel

Expenses not generally deductible

• Depreciation of any capital asset 
• Any sum used in the setting up or expansion of the business 
• Business entertainment expenses 
• Any sum for domestic or private use 
• Capital repayments on business loans

Childminders

We do not need to see all your income and expenditure, just your total income. We will disregard two-thirds of this and work out your notional Tax and National Insurance liabilities on the third that is left.

Share Fishermen

The gross receipts and expenses of the fishing boat are required along with the agreed catching proceeds. The normal weekly earnings are then calculated by totalling the boat’s gross receipt, deducting allowable expenses, then sharing the remaining sum among the crew, according to the distribution agreement.

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