Self-employment: Companies

If a claimant has a company or property business that is analogous to that of a sole trader, they will be treated for UC purposes as being a sole owner or partner. DWP guidance states this is a question of fact in each case. Broadly speaking, a property business exists where it is generating income from land either in the UK or abroad.

Where this applies, they will generally treated as possessing an amount of capital equal to the value (or their share of the value) of the capital of the company/property business and the value of their shares in the company will be disregarded when working out their capital.

In relation to a company which is carrying on a trade:

These rules do not apply where the income is employed earnings under arrangements made to workers by intermediaries or through managed service companies.

The purpose of these rules is to stop claimants from forming a company in order to avoid the harsh effects of the MIF.

Last reviewed/updated 2 August 2021