Skip to main content

Unlock Category: 3. Self-employment/business

Things to think about becoming self-employed or setting up a business


Many of us will have thought about starting our own business at some point. Not many people get around to trying and those that do face a real challenge. Around half of small businesses fail in the first year of trading.

However, for people with convictions, disclosing convictions from the past often leads to discrimination in employment. This leads lots of people to look carefully at how they can employ themselves.

Don’t forget that you will need to disclose any unspent convictions when you apply for business insurances. Most insurance companies will refuse to insure you so make the most of our list of insurance brokers. Make it a part of your business plan to get advice from a broker on exactly what insurance you will need and speak to as many as possible to get a competitive quote.

Points to consider

The steps you need to take will depend on the kind of business, but some general points to consider include:

  • A business plan that lays out a clear strategy and objectives is essential, particularly when seeking funding from lenders.
  • You need to decide on the legal structure of your business – a limited company, self-employed sole trader or partnership
  • Pick a suitable name for the business. If you choose to be a limited company, you will need to register the company name with Companies House.
  • If you need premises, look for a cost-effective location that will balance convenience for customers and suppliers with the rent that you can afford to pay.
  • There are various taxes to pay and accounts that you need to keep. Seek the help of a tax professional and make sure that you meet all tax deadlines.
  • Initial set-up costs are considerable. If you cannot use savings or loans from family or friends, you could approach a bank. You may qualify for help from schemes run by the Government or charities.

Questions to ask yourself

When setting out what you want to do, key questions might include:

  • Are you going to be able to get the relevant insurance, because of your convictions
  • If setting up a company, do you want to become a Director? If you, you need to ensure you are not disqualified from Companies House. See Becoming a Director of a Company for more information.
  • Do you want your name attached to your work, particularly if your conviction was featured in the media. You could think about changing your name first.
  • If you’re looking to contract with companies, will they be requiring you to provide details of your criminal record? If so, what level of disclosure will they require?

Useful resources

Lets Talk About Self-Employment (NIACE) – This has lots of information regarding the steps that people with convictions, who are exploring the option of self-employment, should take.

Specific help and services

New Enterprise Allowance

The Work Programme is not the only Welfare to Work provision for those seeking self-employment. There is an alternative national scheme called New Enterprise Allowance (NEA). It is alternative in the sense that you cannot be on both programmes.

It has significant benefits. NEA offers business advice, assistance in producing a business plan, funding support and business mentoring. It offers a weekly allowance worth £1274 over 26 weeks, paid at £65 a week for the first 13 weeks and £33 per week for a further 13 weeks. There is also access to a loan of between £300 and £1000 to help with start-up costs. The loan has to be paid back but the allowance doesn’t.

The offer of a loan is not guaranteed. It is subject to status and available for projects with “high growth potential”.

To be eligible you must be aged 18 or over, have a business idea and receive one of the following benefits:-

  • Job seekers allowance (or your partner does)
  • Employment and support allowance (or your partner does)
  • Income support
  • You may be eligible if you receive Universal Credit

Any JSA claimant can now access NEA from the first day of their claim, instead of having to wait for 6 months as was previously the case.

One interesting feature of NEA is the setting up of Enterprise Clubs, where aspiring entrepreneurs can meet with local business people to get advice and participate in collective self-help. However, there is no money available from government for setting up Enterprise Clubs, unlike their employment equivalent, Work Clubs.

Details of the organisations responsible for the NEA in each Jobcentre Plus district are available here. More information about the NEA is available on the GOV.UK website here. If you’re interested in the NEA, talk to your Jobcentre Plus advisor.

Useful organisations

GOV.UK has a detailed section online about setting up a business.

Business Link is a free business advice and support service, available online and through local advisers. To find your nearest office, you can visit the GOV.UK for details of various business support helplines.

StartUp Britain is a new campaign by entrepreneurs for entrepreneurs, launched on 28th March 2011. Designed to celebrate, inspire and accelerate enterprise in the UK, it has the full backing of the Prime Minister, the Chancellor and HM Government.

School for Startups is the UK’s leading provider of business training for entrepreneurs. We provide accelerated business training that helps entrepreneurs launch more successful startups and run more successful businesses.

Startup is a programme that offers ex-offenders, and those about to be released from prison, the opportunity to become self-employed, giving a real chance of a fresh start. Whether you are still in prison or recently released, just write briefly to them with details of yourself and your date of release, your business idea and any work experience/qualifications you hold. They should be able to send you a questionnaire to be completed.

UnLtd is a charity which supports social entrepreneurs – people with vision, drive, commitment and passion who want to change the world for the better. We do this by providing a complete package of funding and support, to help these individuals make their ideas a reality.

The Princes Trust provides practical support; advice and financial assistance to young people aged 18-30 who are interested in setting up their own business. Support available includes: Low interest loans, grants, marketing assistance, business mentoring

Business in the Community mobilises business for good. Its members commit to improve the way in which they manage their resources, be that their people or the planet. Its power is the unique platform this creates for collaborative action.

Companies House incorporate and dissolve limited companies, examine and store company information delivered under the Companies Act and related legislation, and make this information available to the public.

Young Enterprise UK works with the business community to deliver programmes to develop young peoples enterprise skills and experience for the future.

HMRC have sections devoted to people who are interested in starting up, or who have started, their own business; providing information on Tax, National Insurance and VAT issues.

The Health and Safety Executive provide information and advice on Health & Safety issues for people who are setting up their own business.

The national enterprise network provides a comprehensive range of quality services and support for Start-Ups, Micro Businesses and the Self Employed from a network of Enterprise Agencies.

Federation of Small Businesses is the UK’s largest campaigning pressure group promoting and protecting the interests of the self-employed and owners of small firms. Formed in 1974, it now has 200,000 members across 33 regions and 194 branches.

Fredericks Foundation is a charity that helps people wishing to set up, or expand their own business as a means to achieve financial independence whilst rebuilding their confidence and self esteem but are unable to access the finance required from conventional sources.

Commercial insurance

Download our list of commercial insurance brokers 

Aim of this page

The aim of this page is to set out what is meant by commercial insurance and what you may need to disclose about your criminal conviction when you are purchasing it.

It forms part of our information section on insurance.

Why is this important?

If you are looking to purchase a commercial insurance policy, you will usually be asked to provide details of all the directors of the company. If any director has ‘unspent’ convictions then these would normally have to be disclosed.

Changes to consumer insurance disclosure law came into force in April 2013 but, these changes did not extend to commercial polices which is why this information is important.

What is meant by commercial insurance?

In most cases, it will be obvious. For example, it will normally involve policies that have a significant commercial element to them, including commercial buildings and contents, public liability, commercial motor or insurance taken out by companies.

Ultimately, if in doubt, the best advice is to check with the insurer, because in some cases, it will depend on the individual case. For example:

  1. A car used for pleasure and business. It will depend on the balance of the use. Personal use, with occasional business use, is likely to be regarded as ‘consumer insurance’.
  2. A van used for both business and pleasure. Again, it will depend on the balance of the use. Business use, with occasional personal use, is likely to be regarded as ‘commercial insurance’
  3. Buy to let insurance. An individual letting his own property out (possibly as part of his pension) could be classed as a consumer, whereas a buy-to-let landlord with numerous properties is likely to be a commercial client.
  4. Taxi insurance. This is likely to be regarded as a commercial insurance policy.

What do I need to disclose for commercial insurance?

On the 12th August 2016, the Insurance Act 2015 came into force. It applies to all commercial insurance contracts and has been described by the UK government as “the biggest reform to insurance contract law in more than a century”.  Part 2 of the Act creates a new ‘duty of fair presentation’ aimed at encouraging active (as opposed to passive) engagement by insurers, as well as clarifying and specifying known or presumed to be known matters.

Previously, insurance law was underpinned by a principle of utmost good faith. Generally this meant that you needed to volunteer any information that a reasonable insurer may have regarded as a material fact. This included any circumstances that could:

  1. Affect the insurer’s willingness to insure a particular risk; and
  2. Cause the insurer to charge a higher premium, or alter the terms of the policy.

On this basis, most insurers may have expected that you would disclose an unspent conviction which related to either yourself or other directors.

Under the 2015 Act, you will be required to disclose sufficient information to put an insurer on notice that they may need to make further enquiries about a potential material circumstance. In this context, it could mean that an insurance company would expect you to notify them if you/fellow directors have unspent convictions. It would then be up to the insurer to decide whether to make further enquiries.

We would advise anybody with unspent convictions to ensure that they disclose all unspent convictions of people who are covered by the policy. This is even where there isn’t a specific question about convictions. Ultimately, if the insurer doesn’t believe it is relevant, they will inform you of this, and you should keep a written record of this if you end up purchasing a policy from them, in the event of a dispute later on down the line.

If you are not sure whether a policy is regarded as consumer or commercial insurance, you should err on the side of caution and disclose all unspent convictions, getting some form of written confirmation of your disclosure, which will be helpful in the event of a dispute.

Remember that you don’t need to disclose spent convictions.

Where can I get commercial insurance?

Unlock’s list has details of companies that can provide commercial insurance.

However, it is also likely that, given this is an area of insurance that is less developed for people with convictions (because it is less common), you are also likely find brokers who do not necessarily specialising in helping ‘people with convictions’ who will be able to help you simply because you are looking for commercial insurance.

Discuss this with others

Read and share your experiences on our online forum.

Below you will find links to useful websites relating to this page. More specific details (including addresses and telephone numbers) of some of the organisations listed below can be found here.

More information

  1. For practical information – More information on insurance and our list of commercial insurance brokers
  2. To discuss this issue with others – Read and share your experiences on our online forum – commercial insurance
  3. Our policy work – Read about the policy work we are doing on ensuring fair treatment by insurance companies
  4. Questions – If you have any questions about this, you can contact our helpline.

Get involved

Help us to add value to this information. You can:

  1. Comment on this page (below)
  2. Send your feedback directly to us
  3. Discuss your views and experiences with others on our online forum


We want to make sure that our website is as helpful as possible.

Letting us know if you easily found what you were looking for or not enables us to continue to improve our service for you and others.

Was it easy to find what you were looking for?

Thank you for your feedback.

12 million people have criminal records in the UK. We need your help to help them.

Help support us now