Self-Employed

If you are self-employed and wish to claim Housing Benefit and Council Tax Benefit, we need to decide whether you are eligible for benefit. We do this by looking at your total net weekly income from your self-employed earnings and any other income or capital you may have.

Self-Employed - A Definition

Self-employed people are those workers who are not employed under a contract. Typically, they can include trades such as window-cleaners, painters and decorators, etc.
A person can be self-employed as a sole trader or as part of a business partnership.

If you are unable to provide accounts, please complete our Self-Employed form. Please contact the Benefits section for a Self-Employed form or download the form here

(pdf file)

Information Requirements for Self-Employed Customers

If you have recently started trading on a self-employed basis, we will ask for an estimate of the likely income and expenses for the business over the first few months trading. This will help us to pay your Benefit sooner rather than having to wait until you have been trading for a few months.

If you have been trading for over 12 months, we will ask for a full years trading figures - normally in the way of a 'profit & loss account'. We may also ask for the most recent tax assessment form received from the Inland Revenue.

What is my Total Income for Benefit Purposes?

The starting point in the calculation is to work out the total business income for the period in question. This will include all money coming in, business start-up allowances, etc but will not include sums of capital paid into the business.

What are allowable business expenses?

These are expenses that we consider reasonable and are incurred wholly for running the business. Examples of allowable expenses include:

rent and water rates on business premises;
gas, electricity and other fuel costs on business premises.
telephone charges;
advertising;
postage and stationary;
legal and accountancy fees;
buying stock and supplies;
business-only motor expenses;

Expenses such as these will be deducted from the gross income figures.

There are certain expenses that HM Revenues and Customs allow that we cannot allow, such as:

depreciation;
capital expenditure;
business entertainment.

Self-Employed Child minders

Child minders are treated differently. Instead of working out what their actual expenses are, two thirds of their total income is disregarded. The remaining third becomes their 'business income' for Benefit purposes.

Business Partnerships

If you are employed in a partnership, the pre-tax profit for the business (i.e. gross income, expenses) is divided equally between the number of partners. If there is a formal agreement in the partnership which governs that profit should be treated differently, then this will take priority.

Tax & National Insurance

We will calculate income tax and National Insurance deductions ourselves based on the net pre tax profit figure. These figures may differ from the figures worked out by the Inland Revenue. Half of any private pension contributions are also disregarded.

All of the above are then deducted from your net profit figure to give us the earnings amount to be used when calculating Housing & Council Tax Benefit

Further Information

If you have any questions about or would like any more information, please contact the Helpline on (01983) 823950.

Isle of Wight Council
Revenues Division
Council Offices
Broadway
Sandown
Isle of Wight
PO36 9EA

Telephone on: - 01983 823950
Late night opening for telephone enquiries every Wednesday until 6pm.

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Email – [email protected]

In Person – you can visit us at any of our local offices
Opening Times - 8.30 am – 5.00 pm Monday, Wednesday, Thursday and 8.30 am – 4.30 pm Fridays. Closed all day Tuesday

Page last updated on: 29/10/2012