How to claim Housing Benefit when you are self-employed
Updated: 11 Feb 2012
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Anyone with a low income may be able to get Housing Benefit subject to the conditions being met. This includes people who are self employed. The amount payable depends on your income, including self-employed earnings, and your family circumstances.
How will you calculate my self-employed earnings?
We will base this on the net profit of the business over a specified trading period. This will reflect the flow of cash into and out of the business.
I have only started my business. How will you work out my entitlement?
We will ask you to provide details of your estimated earnings and make an award of Housing Benefit for a short period. At the end of this period we will expect you to provide actual figures to allow us to calculate the net profit.
I have business expenses; will these be taken into account in deciding my net profit?
Yes, some expenses can be allowed. The main ones are:
- running costs
- loan interest
- VAT paid
- proven bad debts.
However, some business expenses are not allowable. These include:
- depreciation
- drawings
- business entertainment
- business trips or promotional events
- some capital repayments.
Will you make any allowance for things like tax and National Insurance?
Yes, if the net profit from the business is high enough we will allow any tax or National Insurance contributions you are due to pay. If you make any qualifying pension contributions we will also allow half of these.
Will you need any other information relating to my self-employed earnings?
Yes, in order to verify your self-employed earnings we will ask to see your latest certified accounts. Alternatively, we may ask you to complete a special form giving details of the income and outgoings from the business.
Will I have to get certified accounts to claim Housing Benefit?
Not necessarily, if you have been in business for less than a year or your gross profit is small we will not insist on certified accounts. We do, however, reserve the right to ask for sufficient, alternative, information to allow us to calculate your self-employed earnings.
Can you not just take my most recent tax assessment as proof of income?
No, Housing Benefit rules are different from tax rules so it would not be safe to do so. Similarly we cannot base your income on the amount used in a Working Families Tax Credit assessment.
