Reply To: Self-employed

Mike Hughes

The phrase “genuine and effective” appears in a small number of legislative contexts and this is not one of them. Most of the contexts are around employment not self-employment and the approach described above strikes me as scrabbling around to find a legislative justification for a feeling rather than evidence based decision making.

If the claimant fits the definition of self-employed then they are self-employed. There are many reasons a business makes a loss for many successive years and one only has to look at large social media firms which have existed for a decade or more without so much as a + in their accounts to appreciate that it’s never quite as simplistic as “If you’re making a loss then how are you living”. This reflects the misunderstanding that income and profit are the same.

A business making a loss is not one with zero income. It is simply one where income does not exceed expenditure. The idea that asking someone what they’re living on when they declare a loss somehow demonstrates something valid here is, frankly, weird. Clearly the person would generally prioritise staying alive and keeping a roof over their head over other legitimate calls on their income and that would generally explain why a significant number of such self-employment pooters on without profit.