Self employed prisoner.

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    Claimant has spent over a year inside – some on remand but then as the balance of a 3yr custodial.

    Has just claimed HB on her release and has provided self-employed accounts going back 18 months. Has also made a backdated claim for the remand portion of her sentence. Her parner is looking to claim for the period when he was not doing time and she was serving her sentence.

    I seem to remember that you cannot carry on a trade or business whilst a serving prisoner if so, how do I treat the accounts?

    Whilst you could, conceivably, carry on some trades when on remand – this aint one of ’em.

    I am toying with the idea of deciding she is not self-employed. Any thoughts and, again, how do I treat the accounts.


    You could always resort to common sense.

    If the claimant couldn’t pursue her trade while in quod, she couldn’t be self-employed. That would leave her with no income, but if you look at the provisions for people in prison it’s clear that the law regards them as absent – she wasn’t a member of the household.
    Temporary absence is good for unoccupied properties, but where there’s a partner still living there, he’s de facto liable to pay the rent even if he isn’t the named tenant.

    Get him to claim for the whole of her absence and find out what he was living on. If he’s out of time for backdating and she wasn’t, take a deep breath and treat her claim as a first contact.

    Now that she’s out, she’s either resumed self-employment (so treat it as a separate period of self employment) or she hasn’t (so she ceased to be self-employed when she was jailed).


    Kevin D

    As a general observation….

    If, say, there had been a period where a person is still counted as occupying the property (e.g. where absence is less than 13 weeks), any income still counts for HB purposes – even if the income was not lawfully obtained. Basis? Simplicity itself – HB/CTB regs require that GROSS income is taken into account and there is no basis on which to disregard illegally obtained income. Also, HMCR have not been shy about seeking Tax from those that obtain their income from running brothels…..



    We will bow to your superior knowledge (and perchance experience?? :shock:) in this field, Kevin!! 😀 8)

    Kevin D

    Ahem, knowledge, Mr Phillips, just knowledge….. And, not necessarily superior, by any stretch of the imagination….

    Knowledge obtained from newspapers. Which, therefore, must be correct…. 🙄



    Thanks for that, it was more or less the take I had on it to start with but…
    The devil is in the detail.

    If the claimant is not self employed, the business must be some form of a capital asset. So,

    Q1 is does the income arise from this assett? Although she must have ceased trading she made no attempt to dispose of it hence no disregard & tariff income has to be used? If so, do I use the book value or capitalise the annual income (which I think would be more sensible on this occassion)


    If, on the other hand, the income does not arise from the capital when does it become hers?

    If I use the “Takings” figure (the sum total of monies received by the business) this includes a substantial payment of capital introduced into the business – I would assume that this would be disregarded?

    Or I could use the gross profit figure or even the net profit?

    Just found out that partner is a PFA – I was toying with the idea of treating him as an owner in substance if not form but no longer an issue.

    I do not think illegal income is a question, all her hydroponics gear was confiscated when she was arrested!

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