Simply Business homepage
  • Business insurance

    • Business Insurance FAQs

    Business insurance covers

  • Support
  • Claims
  • Sign In
Call Us0333 0146 683
Our opening hours

Guide to Working Tax Credit for the self-employed

2-minute read

Jade Wimbledon

Jade Wimbledon

15 February 2017

Share on FacebookShare on TwitterShare on LinkedIn

Self-employed workers can receive Working Tax Credit (WTC), but you and your business must meet strict criteria to qualify. Our guide will help you understand whether you’re eligible and how to apply.

What is Working Tax Credit?

Working Tax Credit is a government benefit that can top up your earnings if you’re on a low income.

Am I entitled to Working Tax Credit?

Working Tax Credit eligibility depends on the number of hours you work and how much money you earn, but other factors are also taken into account.

In terms of income threshold, if you earn less than £13,100 as a single person or less than £18,000 as a couple you may be eligible for WTC, as long as you work at least 30 hours a week.

There are different rules if you’re disabled, aged 60 or over, or you have children.

How much will I get?

The basic amount of Working Tax Credit is a maximum of £1,960 per year, but if you meet certain criteria - for example if you’re a single parent or you have a disability - you may receive more.

The calculations can be quite complicated, but there’s more information on the Working Tax Credit section of the government’s website.

Sign up to our newsletter to get the latest guides for small businesses and the self-employed

Your email address will be used by Simply Business so that we can send you the latest guides, offers and tips. You can unsubscribe from these emails at any time. For more information, check out the Simply Business privacy policy.

Working Tax Credit for the self-employed

If you’re self-employed but you’re not earning very much money, you may be able to receive Working Tax Credit.

However, recent rules have tightened up the Working Tax Credit criteria for self-employed workers.

If your business isn’t considered ‘commercial’ - i.e. it’s unlikely to make a profit or it’s more of a hobby than a serious business venture - you usually won’t be entitled to WTC.

Which self-employed workers are eligible for tax credits?

Under the rules, self-employed eligibility for Working Tax Credit depends on whether you can show you’re running your business with a view to making a profit, and if your self-employment is “structured, regular and ongoing.”

Explaining these rules, the government says: “These checks are about ensuring HM Revenue and Customs (HMRC) only pay tax credits to those who are entitled. WTC will continue to support those who are carrying on a genuine business activity. These changes will not affect the rules for claiming Child Tax Credit.”

Working Tax Credit application for the self-employed

To apply for Working Tax Credit when you’re self-employed, you’ll need to provide evidence that you’re “in a regular and organised trade, profession or vocation on a commercial basis with a view to achieving a profit.”

The evidence may include things like receipts and expenses, cash flow and profit projections and records of sales and purchases.

If your business is in early stages, this can be difficult. Instead, you may be asked to show that you have a commercial approach and you have a plan to make your business profitable. You may be able to use your business plan to prove this.

To get your application started, use the online tool on the government's website to make sure you're eligible, and then order a Working Tax Credit form online or by calling the Working Tax Credit number, which is 0345 300 3900. Over the phone you can request a Working Tax Credit form, tell HMRC your circumstances have changed, or ask a question.

Working Tax Credit and Universal Credit

Universal Credit is gradually replacing several existing benefits and tax credits, including Working Tax Credit. At the moment, you should still apply for WTC, but by September 2018, applicants will need to apply for Universal Credit instead.

If you’re already receiving Working Tax Credit, you'll continue to get it for the time being, and the tax credits office will tell you when you need to move.

Once you're on Universal Credit, the amount you receive will adjust monthly, depending on the amount you earn. For example, if you have a lower income one month, your Universal Credit payment should increase.

Have you had any experience of claiming WTC as a self-employed person? Tell us in the comments.

Looking for self-employed insurance?

With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.

Start your quote
Jade Wimbledon

Written by

Jade Wimbledon

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.

Share on Facebook
Share on Twitter
Share on LinkedIn

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


HomePopular articlesGeneral businessGuestInsuranceLandlordLandlord resourcesLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


Public liability insuranceBusiness insuranceProfessional indemnity insuranceEmployers liability insuranceLandlord insuranceTradesman insuranceSelf-employed insuranceRestaurant insuranceCommercial van insuranceInsurers


About usOur teamAwardsPress releasesPartners & affiliatesOur charitable workModern Slavery ActSection 172 statementSocial mediaSite map

Customer support

Contact & supportPolicy renewalMake a claimProof of policyComplaintsAccessibility


6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ


Careers at Simply BusinessTech careersCurrent opportunities


BenefitsRefer a friendFinance


Terms & conditionsPrivacy policyCookie policyVuln Disclosure policy


Knowledge centreOpinionsMicrosites

© Copyright 2023 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.