4th Mar 2025
Studying Time: 11 minutes
Article up to date 4th March 2025
Do you know there’s help for the newly self-employed? Even at this tough time, there are nonetheless many sources of economic and enterprise help you’ll be able to entry.
You may be caught in a dead-end workplace job and determined to get away from the nine-to-five. Or, you may be in an business the place individuals are dropping their jobs at a speedy tempo and need to arrange a enterprise to have one thing to do on the aspect and develop in case you lose your fundamental job. Some folks need to be self-employed as a result of they like the pliability of the hours and management of the work, too. Nevertheless, establishing can require funding – particularly as most companies don’t flip a revenue of their first few months (and even years). The excellent news is that there’s assist on the market.
So, what assist is accessible for the newly self-employed?
There’s quite a bit to get via, so let’s get began!
Common Credit score and Self Employment
Universal Credit is a versatile profit. You don’t need to be out of labor to entry it. If you’re self-employed, you’ll submit a month-to-month evaluation of your revenue and bills.
When your web revenue is under a specific amount (relying in your circumstances), you’ll obtain some or all of your Common Credit score fee. The months you earn extra, you’ll obtain much less or no Common Credit score.
This implies you’ll be able to proceed to be a UC recipient till your corporation returns a stable revenue each month. In contrast to Job Seeker’s Allowance, which stops as quickly as you discover work, UC is an ongoing security web.
You will have to show that you’re ‘gainfully self employed’. Which means that:
- Your job is your solely or fundamental revenue
- You’ve common work
- You possibly can present enterprise exercise, equivalent to consumer invoices
There’s something referred to as the Minimum Income Floor. This varies from individual to individual, and is predicated upon what somebody on PAYE in an analogous position to yours would earn at Nationwide Minimal Wage. Should you earn over this quantity, your Common Credit score is labored out primarily based on what you’ve earned over this flooring (so deductions are constructed from your earnings to the extent of the MIF). Should you don’t meet the MIF, your Common Credit score deductions are primarily based on what the MIF can be. The MIF solely applies if you’re not in a start-up interval (see under) or you’re gainfully self employed. If you’re not gainfully self employed (for instance, you’ve a fundamental PAYE job and a small self-employed job on the aspect), the MIF received’t apply.
Should you’re simply beginning out, you’ve one 12 months through the launch of your corporation to get Common Credit score help with no MIF utilized. You don’t need to search for different work, although you’ll meet together with your work coach repeatedly. Your Common Credit score is predicated in your month-to-month revenue – and losses (equivalent to a month the place your bills outweigh your revenue) are rolled to the next month. You’ll report your month-to-month revenue and bills, so keep in mind that your revenue might cut back how a lot UC you’ll get that month.
Common Credit score eligibility
There are some limits to accessing UC.
It’s essential to:
- Have lower than £16,000 in capital or belongings
- Not personal a second property
- Apply collectively together with your associate in case you reside collectively.
This implies in case your associate earns above a specific amount, you received’t be eligible for Common Credit score. You don’t need to be married – in case you reside together with your associate, their revenue is taken under consideration.
Common Credit score, Self Employment, and Incapacity
Self employed individuals who declare Common Credit score however have a psychological or bodily incapacity which impacts their skill to work full-time will be capable to apply for a Work Capability Assessment. You can be assessed to determine in case your well being impacts your self employment alternatives, and could possibly be positioned in one in all two teams for further monetary help whether it is deemed your well being places you at an obstacle to discovering work. You’ll both be within the Restricted Functionality to Work group or the Restricted Functionality for Work and Work-Associated Exercise group – the previous has some further monetary help, the latter has extra (how a lot is dependent upon your circumstances).
If you’re discovered to be in these teams, different exceptions could apply – equivalent to eradicating the requirement to fulfill the Minimal Revenue Flooring after a start-up interval.
Assist to Save
Should you do qualify for Common Credit score, you’ll be able to plan to open a Help to Save account, too. The good information is that the foundations are altering in April 2025 – beforehand, you needed to earn a minimal of £793.17 in a single month to qualify to open one. Nevertheless, from April, you solely must earn £1 in a single month as earnings to be eligible.
Assist to Save is a helpful financial savings account with a hefty authorities bonus. Save between £1 and £50 every month, and the federal government pays you a bonus value 50% of the best steadiness you’ve saved.
The account lasts for 4 years, and the bonus is paid to you in 12 months 2 and 12 months 4. The utmost bonus you’ll be able to obtain is £1,200 (£600 in each 12 months 2 and 12 months 4). After the fourth 12 months, it routinely closes and you’ll’t open one other one.
This extra cash – and financial savings behavior – is an effective way to ensure you’re setting apart some cash on your tax payments. Issues like Funds on Account can take newly self-employed folks unexpectedly, so an emergency buffer like this helps.
Read our in-depth Help to Save article to find out more.
Entry to Work
Slightly-known useful resource, Access to Work helps folks with psychological or bodily disabilities get the fitting tools or assist to do their job properly.
Employers can entry the scheme to obtain a portion of prices for particular tools. Self-employed folks, nonetheless, can use the scheme to have most or all the price coated.
The grant covers issues like desk tools or speech-to-text software program. It may well additionally cowl issues like assisted journey to and from a office, or help employee providers. You can even get assist with work help equivalent to ADHD counselling and work coaches, to assist enhance your productiveness and discover methods to manage in work environments.
Entry to Work is just not taxed and doesn’t need to be paid again. If you’re receiving a one-off grant, equivalent to to pay for a standing desk, chances are you’ll be required to pay this and declare it again from Entry to Work.
apply
To be eligible, you need to have a incapacity (a power bodily or psychological situation that impacts your day-to-day duties and can final a minimal of 9 months). You don’t need to obtain incapacity advantages to qualify. You’ll additionally have to be in paid work (together with self-employment) or as a result of begin paid work imminently.
First, apply online for an Access to Work grant. There’s a barely completely different scheme to use for in case you live in Northern Ireland.
You’ll be requested about your well being situation, the way it impacts your skill to work, and what tools you want to assist.
Subsequent, somebody will come to evaluate your wants both at your workplace or residence (in case you’re working from residence). If, for instance, you want a particular desk chair, they’ll measure you for this on the identical time. Chances are you’ll not require an evaluation to obtain your grant – or your grant could possibly be delayed till assessments can be found once more.
In case your grant is accepted, you’ll obtain the report together with details about the tools and provider. You possibly can then order that tools from the provider – and both pay direct and be reimbursed, or have Entry to Work pay the provider direct.
Should you do business from home, you’ll have to pay a portion of the fee if the tools could possibly be used for private use, equivalent to if in case you have obtained a grant for a pc or tailored tools that’s helpful each on your job and day-to-day actions.
Private Independence Cost (PIP)
Personal Independence Payment is just not means examined, which implies you’ll be able to apply whether or not you’re in work or not and no matter how a lot you (or your associate) earn. It’s designed to assist folks address the additional prices that include having a incapacity. This may be hiring help staff, getting taxis in case you can’t drive or stroll with ease, and even issues like getting a cleaner as soon as per week so you’ll be able to focus your vitality on work-related exercise as an alternative.
You possibly can spend your PIP on no matter you want to, with a view to make your life a bit simpler dwelling and dealing with a incapacity.
There are two elements to PIP, and a decrease and better fee for every. You may qualify for one or each, at whichever fee an assessor deems appropriate. The Every day Residing part is £72.65 for the decrease fee or £108.55 for the upper fee every week within the 2024/5 tax 12 months. The Mobility part is £28.70 decrease fee or £75.75 for the upper. Qualifying for one part doesn’t essentially qualify you for the opposite.
Find out more and how to apply here.
Enterprise Mentorship
Not strictly a funding alternative or a profit, however enterprise mentorship programmes are an incredible place to begin once you arrange your corporation.
Your native Job Centre and your Residents Recommendation Bureau could have loads of recommendation about accessing native enterprise mentorship schemes.
Getting a neighborhood enterprise mentor means you’ll have entry to essential networking alternatives. They’ll additionally know the place you could possibly entry grants and funding on a neighborhood degree, too.
Some native authorities run a enterprise mentorship programme with numerous free workshops to coach new enterprise homeowners on every part from advertising to managing taxes. You may additionally be capable to entry free (or very low cost) co-working workplace house, tools, or storage items for stock.
Prince of Wales Belief
The Prince of Wales Belief affords enterprise mentorship and funding help to entrepreneurs aged 18 to 30, inclusive – so in case you’re already 30 you’ll be able to apply.
The Belief has a wonderful fame for serving to younger folks launch their careers. Its crew affords mentorship and help, from enterprise planning via to funding functions and past. You can even entry the Improvement Awards for some coaching grants, too.
Take a look around the website to see if they can help.
Startup Funding
If you can begin your corporation with out borrowing, that’s an incredible place to be in. Nevertheless, most new enterprise homeowners might want to borrow some capital to get their enterprise off the bottom.
Startup loans supply a low-cost method to fund your new enterprise plans. You don’t want the identical established enterprise necessities of a typical enterprise mortgage, both. For instance, you don’t need to have a number of years’ accounts to be authorised for a mortgage.
Store round on your startup mortgage. Like another mortgage, some offers are higher than others. Borrow solely what you want – not the utmost quantity obtainable. This helps retains prices down within the long-term with out impacting your short-term money move.
Strive the Startup Loans Company or Funding Circle as a primary cease.
Peer-to-peer Lending and ‘Angel Buyers’
A so-called ‘angel investor’ is sort of a dragon from the Dragons’ Den. They’ll fund a part of your corporation enterprise in return for a proportion of the income. You’ll typically obtain enterprise mentorship as a part of the deal, too.
There are many angel investor platforms obtainable. Attempt to meet with (or, nowadays, video-call) potential traders earlier than signing something. All the time learn the small print and ensure you communicate to a number of attainable traders earlier than selecting your associate.
Peer-to-peer (P2P) lending is a little more nameless. You don’t get the enterprise mentorship however you’ll be able to entry a bigger fund.
Buyers pay right into a P2P fund in return for a proportion on their cash. The P2P platform takes a proportion, too. Consider it like a mortgage – however with out the necessity to fulfill excessive lending necessities of a excessive avenue financial institution.
Crowdfunding
We’ve all seen the success of Kickstarter and Crowdfunder. However how do they work?
You create an internet pitch for anybody to see. This consists of particulars in regards to the merchandise you need to develop, what it does, and what the crowdfunded cash pays for. You possibly can entice traders by giving them one thing in return for his or her money. For instance, they’ll purchase the product early and at a lowered worth, or you’ll be able to supply them a list on a sponsors web page – something you assume will entice traders.
It’s a must to set a goal. Test the main points of every fundraising platform and kind – some will stipulate that in case you don’t hit the goal you received’t get any of the pledged money, whereas others will allow you to obtain no matter is raised.
Should you do attain your funding goal, however, you’re going to get your cash. You’ll must hold correct accounts to point out that you’ve carried out with the cash what you stated you’ll, and ensure you honour any pledges (equivalent to receiving a product in return for being an early supporter of your new product).
Native Authority Funding
Test your native council’s enterprise pages to see what help it affords. You may be stunned!
Many native authorities supply funding or mentorship programmes for brand spanking new enterprise homeowners. These schemes are sometimes extra prevalent in disadvantaged areas, to encourage new firms to arrange in that area.
The funding obtainable could possibly be something from a one-off grant to ongoing enterprise help within the type of a rent-free workplace or store house. Many grants have to be matched – so in case you want £1,000, you’ll must put £500 up your self and ask for an extra £500 within the grant.
You can even take a look at Turn2Us Grant Finder which takes you thru a questionnaire that can assist you find grants on your private circumstances (fairly than to help your corporation), which may help alleviate a number of the monetary stress of going self-employed.
Social Enterprise Funding
If you need your new enterprise to be a social enterprise, this opens you as much as many extra funding alternatives.
A social enterprise places surplus income again into the enterprise to assist the neighborhood. You possibly can nonetheless earn a revenue and wage, however your general work must have a social or environmental mission that advantages your local people and surrounding areas.
Working a enterprise like that is just like another enterprise mannequin. Nevertheless, as an alternative of sharing income within the type of dividends to shareholders, you place that cash again into your corporation efforts to maximise your influence on the neighborhood.
Social enterprises qualify for all types of grants, together with these provided by the National Lottery Community Fund.
Loans can be found as a funding possibility, typically with a proportion grant. This implies you received’t need to pay again every part that’s borrowed, solely the mortgage ingredient. For instance, the First Steps Enterprise Fund affords loans as much as £30,000 – with 90% of that as a mortgage and 10% a grant.
Coaching Grants
If you want to obtain a qualification earlier than you’ll be able to open your corporation, chances are you’ll obtain coaching funding to assist.
For instance, folks on Common Credit score could apply to have some or all charges paid for, in the event that they enrol on a brief skilled improvement course. The course must be an important merchandise – for instance, your Fuel Protected certification if you wish to begin a boiler engineer enterprise. It might additionally embrace issues like well being and security coaching for cellular magnificence therapists, licence programs for safety employees, or a PTTLS grownup educating qualification for tutors and workshop leaders.
The National Careers Service has some funding alternatives for programs, too.
Should you’re on a low revenue, it’s additionally value taking a look at your native grownup schooling centres and programs. They’ll typically supply free or discounted locations to folks on advantages or who can show a low revenue.
Take a look at charities centred round your business of selection, too. Screenskills, for instance, affords bursaries and coaching alternatives for all types of individuals eager to work behind the scenes in tv and movie.
Apprenticeship Funding
Do you need to arrange a enterprise with employees? Should you’re not planning to go it solo as a freelancer or contractor, staffing prices will make up an enormous overhead as you arrange your organization.
Apprenticeships supply a method to employees your organization whereas coaching the brand new era. New companies need to fund 5% of apprenticeship prices, with the remaining coated by a Authorities scheme.
You’ll must comply with the foundations about working hours, and time without work for research and exams, and help with mentoring your apprentice.
Your apprentices might change into full-time employees as soon as they go their course a number of years down the road, too!