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Self employment and benefits - Self employment and benefits: Frequently asked questions

If you or your partner are working, or thinking of starting work, as a self employed person you might qualify for welfare benefits to top up your income.

The benefits you are entitled to will depend on a number of things, including your age, the number of hours you work and how much you earn.

Self employment and benefits: Frequently asked questions

1. I’m self employed, but struggling to make the business pay. Is it better for me to claim Jobseeker’s Allowance or Working Tax Credit?

It can be difficult to decide if you will be better off on Jobseeker’s Allowance or Working Tax Credit.

You will need to find out how much you will get if you claim each benefit. Our Benefit Calculator will help you to work out how much you might get for these benefits.

These are some points you might want to think about when deciding which benefit is best for you:

  • You must not be working or only be working part time to get Jobseeker’s Allowance. Part-time work is employment you do for less than 16 hours each week

  • If you claim Jobseeker’s Allowance, you must agree to look for and take other full-time work

  • You must work full time to get Working Tax Credit. If you do not have children living with you and do not have a disability, you may have to work at least 30 hours each week to qualify

  • If your hours of work vary through the year, you might be treated as being in full-time work even when you are working less than 16 hours. If the average number of hours over the year is over 16, you will not be able to get Jobseeker’s Allowance

You will only get help with mortgage payments if you work part time and get Jobseeker’s Allowance.
 

We suggest you seek advice from a local benefits adviser to help you decide which benefit to claim. You can use our Find an Adviser tool to find a local one.

2. Can a self-employed person get any help to pay the mortgage on their home?

You will only be able to get help towards the mortgage interest payments on your home if you are entitled to one of the following benefits:

This is because help with this type of housing cost is included as part of these benefits and cannot be claimed on its own.

You cannot get Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance if you work full time – i.e. work more than 16 hours or more per week, or your partner works more than 24 hours per week.

If you work part time and your earnings, other income and capital are low enough and you meet the other rules for these benefits, you might be able to claim help with mortgage interest payments.

If you or your partner is Pension Credit age, you might be entitled to Pension Credit. As long as you meet the age rules and your income is low enough you can get this if you work full or part time.

To find out whether you can get one of these benefits try the Turn2us Benefits Calculator.

3. Can a self-employed person claim Housing Benefit and Council Tax Support?

Yes, you can work in self employment and get Housing Benefit (England, Scotland, Wales), Housing Benefit (Northern Ireland) and Council Tax Support if your earnings and other income are low enough.

Housing Benefit can be paid if you rent your home.

If you pay a mortgage or other loan for your home, see question 2 above.

Council Tax Support is to help you pay your Council Tax bill if you rent or own your home. There are no work rules for Housing Benefit and Council Tax Support, so you can get it if you work full or part time.

4. What is the New Enterprise Allowance?

New Enterprise Allowance is a scheme that is intended to help unemployed people start a business through business mentoring and a weekly allowance. You can claim it if you (or your partner) have been getting Jobseeker’s Allowance for 26 weeks or more and live in England, Scotland or Wales.

If you take part in the New Enterprise Allowance scheme, you will get access to a volunteer business mentor who will provide guidance and support as you develop your business plan and through the early months of trading. Once you show that you have a viable business with potential for growth, you will be able to access financial support. A weekly allowance paid at £65 a week for 26 weeks (up to a total of £1,274)

There is also the chance to apply for a loan of up to £1,000 to help with business start-up costs.

See the GOV.UK website for more information on the New Enterprise Allowance (link opens in a new window)

5. I am self employed and my wife is about to have our first child. Can I claim paternity benefits?

The main paternity benefit is Statutory Paternity Pay. This is paid by an employer to an employee who meets the qualifying conditions, to cover a period of leave for a birth or an adoption. If you are self employed you cannot get Statutory Paternity Pay as you are working for yourself and therefore do not have an employer.

Updated: 15 April 2015

 

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