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ESA and starting a new business


I was wondering if anyone can help me. I would like to start an online business but my husband claims ESA(IR) and in the support group. I am a stay at home parent and my husband claims for us both. 

I can not find much about this online only that I can work up to 24hrs per week and the first £20 is disregarded. How would that work for a business, is that on profit or everything that passes through my bank account? What if I have a business loan? Can any profit be reinvested into stock before it is counted?

Any help would be much appreciated.



  • BenefitsTrainingCo
    BenefitsTrainingCo Member Posts: 2,628 Pioneering
    Hi Ryan1uk - the normal rules for income related ESA, as you have found out, are that your husband cannot continue to claim income related ESA if you work 24 hours a week or more, regardless of your level of earnings. It's always the hours rule which counts first. If the hours rule is ok, then DWP look at earnings, and for self-employed people they will take into account your 'net profit' less the £20 earnings disregard. Your net profit is basically your self employed earnings minus reasonable expenses, income tax and NI contributions, and half of any premium paid to a pension scheme. The rules for this, especially what counts as reasonable expenses would need to be thoroughly researched with HMRC first. 
    The general advice would be to be very careful before you embark on this. If you break the 24 hour rule, and your husband's ESA stops, you may have to claim Universal Credit if your area has gone to the full service version of UC (see, and there would be no way back to ESA. It's possible that Universal Credit may be a good option for you, although feedback from self-employed people in full service UC areas has been mixed. Please run your circumstances through the benefits calculator on this Scope website before you decide - the benefits system does not cope well with fluctuating incomes! Good luck anyway - and please get back to us if you would like further advice. 
    I hope this is helpful.

    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland


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