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Key takeaways
- Business Debtline gives free, confidential advice to self-employed people and small business owners.
- Your legal position depends on whether you are a sole trader or run a limited company, so say which when you ask for advice.
- Tax debts such as income tax and VAT are usually treated as priority debts, so deal with them early.
- The same solutions as employees may be open to you, including a debt management plan, an IVA, a Debt Relief Order or bankruptcy, but business assets and income can affect the choice.
- A realistic budget based on your average income is the foundation of any plan.
Debt is harder to untangle when you work for yourself. Your income can swing from month to month, a late-paying client can throw off your whole budget, and business debts and personal debts are often tied together. The good news is that free help exists that is designed for self-employed people. This guide explains where to get it, how your position differs from an employee's, what to do about tax debts, and the options that may be open to you. It is general information, not personal advice, and a free adviser can look at your own figures.
Why debt is different when you are self-employed
If you are employed, your pay is predictable and your tax is taken for you. When you are self-employed, you may have a very good month followed by a poor one, and you are responsible for setting aside money for your own tax. A single late payment from a client can leave you unable to pay a supplier, a bill and your own living costs at once.
Business and personal money can also be hard to separate. A sole trader and their business are not treated as separate in law, which means business debts can become your personal responsibility. If you run a limited company, the company is a separate legal entity, but you may still be personally responsible for some debts, for example if you signed a personal guarantee. An adviser will check your own position, so make sure you tell them exactly how you trade.
Free help designed for the self-employed
Business Debtline is run by the Money Advice Trust, the charity behind National Debtline. It gives free, confidential debt advice to self-employed people and small business owners, including sole traders, directors of limited companies, partners of self-employed people and buy-to-let landlords. The phone line is 0800 197 6026 (Monday to Friday, 9am to 8pm), and webchat runs Monday to Friday, 9am to 5pm. Its online budget tool is available at any time.
You can also use general debt advice services. National Debtline, StepChange and Citizens Advice all help people who are self-employed with personal debts. In Northern Ireland, StepChange's website refers self-employed people to Advice NI (0800 915 4604). See our guide to Business Debtline and our list of debt helplines. We checked the phone numbers and opening hours in this guide against each organisation's own website on 20 October 2026. Hours change, especially around bank holidays, so check the website before you call.
Sort your debts into business and personal
It helps to list every debt and mark whether it is a business debt, a personal debt or both. A business credit card guaranteed by you personally, for example, may belong in both columns. Include trade suppliers, business loans, overdrafts, hire purchase and any tax owed.
Once you have the full picture, you can see which debts are most urgent. Our guide on priority and non-priority debts explains which debts have the most serious consequences if you do not pay. For the broader business angle, see business debt help for sole traders and small firms.
Tax debts and HMRC
Tax debts, including income tax, National Insurance and VAT, are usually treated as priority debts, because HMRC has strong powers to collect what is owed. If you cannot pay a tax bill on time, contact HMRC early rather than waiting. HMRC may agree an arrangement to pay over time, and you can read how this works in our guide to HMRC tax arrears and Time to Pay.
Tell your adviser about all tax owed, including bills coming up, so the plan covers them. A budget that ignores next January's tax bill will fall apart.
Building a budget when your income varies
Advisers use a budget to work out what you can afford to repay. When income varies, a common starting point is your average income over a representative period, rather than your best or worst month. Include money you need to set aside for tax and for the business to keep running. Business Debtline's online budget tool is built for this, and our guide to making a debt budget explains the basics.
Solutions that may be open to you
Self-employed people can use the same formal and informal solutions as anyone else, though business income, assets and the nature of your debts can affect which is best.
- An informal arrangement or a [debt management plan](/debt-solutions/debt-management-plan) to pay what you can afford over time
- An [IVA](/debt-solutions/iva), a formal agreement with creditors. See IVA for the self-employed
- A [Debt Relief Order](/debt-solutions/debt-relief-order) if your debts, assets and spare income are low enough
- [Bankruptcy](/debt-solutions/bankruptcy), which has serious consequences for a business and should only be considered with advice
- For limited companies, different options apply, and Business Debtline can explain them
What to have ready before you call
Free advisers can work faster, and give you better advice, if you have your details to hand. You do not need everything in perfect order, and you can still call if you are missing some papers.
- A list of what you owe, who each debt is with and roughly how much, including any letters from collectors
- Your income from all sources, and how often it is paid
- Your main regular outgoings, such as rent or mortgage, council tax, energy, food and travel
- Any court papers, default notices or letters threatening action, with the dates they arrived
- Details of anything you own of value, and any savings
Keep business and personal records separate
Mixing business and personal money makes debt advice harder, because an adviser needs to see what the business owes, what you owe personally and where the two overlap. If you can, keep a separate account for business income and spending, and keep invoices, receipts and tax correspondence together. Even a simple list of what customers owe you and what you owe suppliers gives an adviser something to work with.
Take the first step
Many self-employed people leave it too long because they hope the next big job will fix everything. Talking to a free adviser early gives you more options, and it costs nothing. If the business is the main problem, say so on the first call. If you are being chased now, our guide to urgent debt help covers what to do today.
Frequently asked questions
Where can self-employed people get free debt advice?
Are business debts my personal responsibility?
What should I do if I cannot pay my tax bill?
Can a self-employed person get a Debt Relief Order or an IVA?
Does a debt helpline cost anything?
Sources and further reading
- Business Debtline — Money Advice Trust
- National Debtline — National Debtline
- Contact StepChange — StepChange Debt Charity
- Debt advice — Consumer Council for Northern Ireland
- Debt Relief Orders — GOV.UK
- Get free debt advice — GOV.UK
This page provides general information only. It is not personalised financial, legal or tax advice, and rules and figures can change. Your situation is unique — please check official sources such as GOV.UK and MoneyHelper, and speak to a qualified, FCA-authorised adviser before making important decisions about your money.
Written by
MoneyBrink Editorial Team — Editorial team
The MoneyBrink Editorial Team researches, writes and reviews every guide on this site. We work from official UK sources such as GOV.UK, the Financial Conduct Authority, MoneyHelper and the Money and Pensions Service, explain things in plain English, and update articles when the rules change. We do not sell financial products and we do not give personal advice.
Read how we research and check our guides in our editorial policy.
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