If you’re self-employed and are able to claim housing benefit rather than housing costs via Universal Credit, we need to look at:
- your total weekly income
- your expenses from your self-employment
- any capital you have
We need to know your total weekly self-employed income and expenses so that we can work out your net profit for Housing Benefit purposes. The expenses we allow may not be the same as those allowed by HM Revenues and Customs so the figures we use may not be the same.
To calculate your net profit we allow:
- tax deductions
- national insurance contributions
- 50% of any pension contribution you make
What expenses are allowed?
Any reasonable expenses used to run your business is allowed. For example:
- Rent and water rates on business premises
- Gas, electricity and other fuel costs on business premises
- Telephone charges
- Advertising
- Postage and stationery
- Legal and accountancy fees
- Buying stock and supplies
- Business-only motoring expenses
HM Revenues and Customs do allow some expenses that we can’t allow when working out benefits. These include things like:
- Depreciation
- Capital expenditure
- Business entertainment
What happens with couples who are business partners?
We use the same guidelines if the business partners are a couple. Once we have confirmed your net profit, this will be equally split and applied to each partner.
Childminders
We don’t take into account any business expenses for self-employed childminders. Instead we deduct two thirds of your gross income, and then allow:
- tax deductions
- national insurance contributions
- 50% of your pension contributions
This gives us the amount we apply as your net income.
If you are a share fisherman please contact us for advice.
What information will I have to provide?
- A set of your latest accounts prepared by your accountant
Or, if these are not available:
- A completed self-employed earnings form. Plus evidence of income and expenditure, for example receipts.
If you have only just started your business, you’ll need to give us an estimate of what you expect to earn, and pay in expenses, for the first 3 months of trading. You will need to keep records as we will ask you for them to confirm we have used the right figures.
