Giving advice to self-employed clients
When dealing with self-employed clients, you need to look at their overall situation, both from a personal debt position and a business perspective.
This is so that you can fully consider how a client’s circumstances can affect your advice. Remember you are not a chartered accountant, insolvency practitioner or a business specialist. Your role is simply to identify the debt issues the client has presented with and look at the whole picture. A client’s circumstances may change over the time you are advising them, thus your advice may also need to reflect any changes. Do this even if a self-employed client says that they have personal debts only.
It is worthwhile taking the time to ask the client about their business – what is it precisely that they do? What service do they offer? How is the business run – do they keep daily records of all business transactions and expenses – if so, what is their recording method? Knowing a bit about the client’s business will help you to help them.
Additionally, do they have an accountant to do their business books or does the client do it themselves? Do they make the most of the expenses offset using the HMRC guide?1 Do they understand the implications of being self-employed – some clients may be full-time employed and have a self-employed business on the side to generate extra income? Some clients may only be self-employed at certain times of the year and employed at other times of the year. Experience as a money adviser will tell you that clients do not always have a clear picture themselves on either the personal debt side or the business side.
Organisations should have a policy (or guidelines) that sets out the level of support debt advisers are expected to provide self-employed clients. If your organisation does not have such a policy or guidelines, you need to raise this with your organisation.
The policy should take into account the level of an adviser’s knowledge in this area and the technical support available within their organisation. It should also recognise that three key factors usually affect the type of help that self-employed clients need to deal with their situation.
These three key factors are:
•how the client is set-up in business (their trading status);
•whether the client has stopped trading;
•whether the client has any complex business debts (such as a business premises lease or a tax dispute).
The remainder of this chapter assumes that your organisation’s policy provides some support to self-employed clients. The chapter shows how these key factors can affect the scope and type of advice that debt advisers may be able to offer a self-employed client. It also explains when a signpost or referral to a specialist service is usually required.
This chapter is not intended to challenge any organisation’s policy. Advisers should refer to their own guidelines and always seek specialist advice if they are uncertain about advising a self-employed client.
Business Debtline provides free business debt advice for self-employed people and small businesses. It can advise clients who are still trading, and clients who have ceased trading and who have complex debt situations. Advice is available by webchat via its website at or by calling 0800 197 6026.