List business income and expenditure
In addition to the personal financial statement, a business financial statement is also needed to assess the position of self-employed clients who are sole traders or partners in a business partnership. Read further on for information about the types of business financial statement available and for dealing with other types of self-employed clients.
The business financial statement uses information about how the client’s business has performed in recent months to estimate what income the client is likely to get from the business in the future. The statement takes information about the business’s income and expenditure (running costs) over a set period to work out an average of the profit or loss that the business produced during this time. This information is used to estimate the amount that a self-employed client can expect to take from their business as income, after allowing for income tax and national insurance (NI) liability. The net business income figure (or loss) should be included in the client’s personal financial statement.