Reply To: Self Employed Income or Capital in Property

Peter Barker

I’d agree with Peter on this. The definition of a self-employed earner in the West Northants CTR scheme refers to s2 of the SSC&B Act 1992, which defines self-employment as being gainfully employed other than under a contract of service or as an office holder. There are two things to consider: is it gainful (i.e. done to earn a living) and does it involve employment – i.e. does it keep you busy enough to call it work? Sounds to me as if it probably does.

I would just add one thing: for self-employed people, money in a business bank account belongs to the claimant personally – it is not some charmed area with a force shield that repels means testing. Normal rules apply: once a payment of income has been sitting in the account for longer than one income cycle (eg monthly rent for longer than a month), it becomes capital. Couple of weeks ago someone sent me a question about a self-employed case where the claimant wanted depreciation of business assets allowed as an expense and their accountant had sent in a balance sheet showing the pool of assets … which included £52,000 cash in the bank. I said depreciation as an allowable expense is the least of their worries!