Who should complete this form?
Someone is classed as self-employed if they work for an income but are not employed under contract, and will pay tax or national insurance direct to HMRC unlike a regular employee.
A person can be self-employed as a sole trader or as part of a business partnership.
If you are a subcontractor and pay through the Construction Industry Scheme (CIS),for which a contractor deducts money from your subcontractor’s payments and pass it to HM Revenue and Customs (HMRC). These deductions count as advance payments towards your tax and National Insurance at the end of the tax year. You will normally be treated as self-employed and should complete this form with all your self-employed income and expenses including your CIS payments made.
If you work for a limited company as a director or company secretary you are an employee of the company. As you are employed by the company we will need to provide your pay slips and the latest company accounts showing all your directors remuneration and expenses paid to you by the company.
Trading periods
If you have been trading for 12 months of more, please complete this form with your income and expenses for the latest trading year (normally April) to the present date.
This will help us confirm your current trading position. We may ask to see your latest trading accounts/self-assessment form for the previous year.
If you have started trading within the last 12 months please complete this form with your income and expenses from the date you started trading to the present date.
If you are starting a new business please complete this form with your expected income and expenses for the first 13 weeks of trading. You will then need to provide your actual income and expenses after 13 weeks to us.
Income and expenses
You must give details of all income and expenses related to the business.
The way we work out income and expenditure for Housing Benefit and Council Tax Support purposes is not the same as the calculation made by HMRC.
The benefit rules do not allow certain expenses, even if they are allowed for tax purposes. These may include:
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business entertaining
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depreciation (the loss in value due to wear and tear and so on)
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capital repayments on a business loan other than for repair/replace of equipment
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money used to set up or expand a business
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amounts you take from your business as a wage or salary
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capital spending (this is spending on a capital item for expanding the business, for example a new taxi or a property)
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money for domestic or private use.
We can only use expenses which are ‘wholly and exclusively’ incurred in the running of the business. If you are running your business from home, you will need to decide what percentage/amount of an expense relates to business use and what is for personal use.
This may include:
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heating, lighting, hot water and power to operate machinery
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telephone call charges and rentals
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transport costs for personal use of any business vehicle.
Example: Telephone – the total cost of the telephone calls for the period covered is £126.50.
You say 40% relates to business and 60% relates to private. The amount we would use as a business expense would be £50.60 (40% of £126.50).
Proven bad debts
Any business debt is proven as ‘bad’ if you have made reasonable efforts to recover the money you are owed, but there is no realistic prospect of recovering it. Personal debts cannot be counted as bad debts for Benefit purposes.
Childminders
If you are a self-employed childminder, instead of looking at your actual expenses, we will work out your self-employed earnings using one-third of your gross income, less any notional Income Tax, National Insurance contributions and half of any pension contributions that you pay.
Tax and National Insurance
After the net profit of the business is worked out we will make an assessment of Income Tax and National Insurance contributions based on these figures. These figures may differ from those worked out by HM Revenues and Customs.
Private pensions
Please supply details of any contributions you pay into a personal of private pension. Half of any contributions you make will not be counted as part of your income for our purposes.