Running your own business brings freedom and flexibility – but it also comes with risk. If you’re self-employed and suddenly have no work, it can be frightening trying to figure out how to cover your bills and stay afloat.
This guide explains what to do if you’re self-employed with no income, including help with benefits, budgeting, and what steps to take next if you’re worried about money.
Whether your work has slowed down unexpectedly or stopped altogether, there are options and support available.
Why might self-employed income stop?
There are many reasons why someone who’s self-employed might suddenly find themselves without work or income. Common causes include:
- A key client cancelling or delaying work
- Seasonal fluctuations in demand
- Illness or injury preventing you from working
- Wider economic changes impacting your sector.
Because self-employed income can be unpredictable, even a short gap between jobs can lead to a cash shortfall – especially if you don’t have savings or a financial safety net.
If this has happened to you, know that you’re not alone. Many self-employed workers experience quiet periods or unexpected setbacks. The key is to take early action to protect your finances and get the support you’re entitled to.
Benefits for self-employed with no work
If you’re self-employed with no income, help may be available through the benefits system. Depending on your circumstances, you could apply for:
- Universal Credit
Universal Credit is a monthly payment to help with living costs. Self-employed people can claim it if they’re on a low income or have no income at all. You’ll need to report your business income and expenses regularly and meet certain conditions set by the Department for Work and Pensions (DWP).
- New Style Employment and Support Allowance (ESA)
If you’re unwell or have a health condition that affects your ability to work, you might qualify for New Style ESA. This depends on your National Insurance record and can be claimed alongside Universal Credit in some cases.
- Council Tax Reduction
If your income has dropped, you could apply for a reduction in your Council Tax bill. Each local authority has its own scheme, so check your council’s website for details.
- Help with rent or housing costs
Universal Credit can include a housing element to help cover rent. If you’re already receiving Housing Benefit, your local council may also be able to help with a temporary shortfall through a Discretionary Housing Payment.
You can check what benefits you might be entitled to using the calculator at MoneyHelper.
How to manage your finances when there’s no income
When you’re self-employed with no work coming in, your first step should be to get a clear picture of your finances. Start with:
1. Review your outgoings
Look at your essential bills – like rent or mortgage, utilities, food, Council Tax, and transport. Identify any areas where you can reduce costs, even temporarily.
2. Prioritise your payments
Some bills are more urgent than others. Missing rent, mortgage, or energy payments can have serious consequences. If you’re unsure, check out our priority and non-priority debts guide.
3. Speak to your creditors
If you’re struggling to keep up with payments on loans, credit cards or business debts, contact your creditors. Many are willing to discuss affordable payment plans or offer temporary support if they know you’re actively trying to manage things.
4. Pause non-essential spending
Until work picks up again, pause any spending that isn’t strictly necessary. You may be able to resume these once your income stabilises.
Accessing support with debt
If you’ve already missed payments or are worried your debts could spiral, it’s important to get advice early.
If you’re ready to talk, you can also visit MoneyHelper for free, impartial advice on benefits, budgeting and more.
Alternatively, at MoneyPlus, we offer confidential, non-judgmental advice to help you find a manageable budget that works for you. Our advisers can help you explore options including:
- Debt Management Plans (DMPs) – informal agreements where you make reduced monthly payments to your creditors.
- Individual Voluntary Arrangements (IVAs) – a legally binding solution where part of your debt may be written off after a set period.
- Guidance on other debt solutions and budgeting strategies that fit your circumstances.
You contact an adviser at MoneyPlus. We’ll listen to your situation and help you find a practical path forward.
Self-employed, no income: what else can you do?
As well as checking what benefits you can claim and looking into debt help, here are some additional steps to consider if you’re self-employed with no income:
- Talk to HMRC
If you’re unable to pay your tax bill or have fallen behind on payments, contact HMRC as soon as possible. They may allow you to set up a Time to Pay arrangement to spread the cost.
- Look for alternative income
Can you take on temporary part-time work or freelance projects outside your usual sector? Even short-term work can help cover essentials while you rebuild your business.
- Re-evaluate your business plan
If work has dried up, now might be the right time to rethink your business model, consider upskilling, or explore new markets. Many successful businesses go through lean periods, but a clear plan can help you bounce back.
What if your debts are business-related?
If the debts you’re struggling with are tied to your business – such as overdrafts, supplier invoices or bounce back loans – you may still be personally responsible for paying them, especially if you’re a sole trader.
It’s vital to seek tailored advice. A debt adviser can help you understand your liability, your rights, and the most appropriate way to deal with business debts based on your set-up.
You can learn more about your options by visiting our types of debt page.
Take your next step
Being self employed with no work can feel isolating – but you don’t have to face it alone. Whether you need budgeting support, help with debts, or want to understand the benefits for self-employed people with no work, taking action now can help protect your future.
Alternatively, you contact an adviser at MoneyPlus. We’ll listen to your situation and help you find a practical path forward.
