Self-employed income loss: distinguish turnover, profit and replacement

Start with the business and your personal role

Describe work you performed yourself, the organisation of the business and the source of your private income. A sole trader, partnership and company can raise different legal and financial issues. Have personal losses distinguished from losses belonging to another party. Do not decide this solely from the account into which a customer paid.

Add an account of actual duties: practical work, selling, administration, planning and managing others. Entrepreneur alone explains little about absence. A self-employed tradesperson with few staff differs from someone whose team can take over assignments. This helps financial experts understand figures affected by your absence and those with causes elsewhere.

Turnover, profit and cashflow show different things

Turnover concerns sales revenue; profit also depends on costs. The Dutch Tax Administration explains business profit as part of income from work and home. Tax computation and civil damages assessment are not identical exercises. Ask which figures are needed and whether amounts are presented including or excluding VAT.

Cashflow can become urgent when customers pay later, even for work previously completed. Show which work periods invoices concern. Falling bank balances do not independently establish injury-caused loss. Conversely, payment for old assignments can temporarily hide financial consequences. Separating those moments makes the file easier to understand.

Use a representative financial series

Collect annual accounts, returns, assessments and recent interim figures. Ask the accountant which period gives a useful picture of ordinary activity. Growth, seasonal work and recently started businesses may not be represented by one previous year alone. Identify unusual major orders, investments, refurbishment and extended absence planned before injury.

Preserve forecast assumptions too. A budget made before the accident differs in context from a later claim estimate. The latter is not necessarily unusable but needs explanation. Reconcile figures with records and identify missing information. An expert can work better with visible uncertainty than apparently complete figures whose origins cannot be found.

Substantiate missed assignments specifically

Distinguish signed orders, returning customers and non-binding enquiries. Record agreed period, activities and correspondence. The whole quoted price is not automatically personal loss; some costs may be avoided because work is not undertaken. Provide those details without deciding every legal and tax adjustment yourself.

For example, one job cannot proceed because of your absence while materials have not yet been ordered. The turnover figure does not tell the whole story. For another, a colleague organises cover and retains the client. Describe both separately. Per-order records avoid counting missed sales and replacement expenses as the same loss without explanation.

• Separate confirmed orders from enquiries and state the work period.
• Record costs saved and additional replacement costs incurred.
• Have accountant and claims adviser use the same figures, explicitly identifying VAT and legal form.

Replacement can reduce loss but needs agreements

Where someone takes over work, record tasks, hours, rates and why assistance was needed. Keep invoices and relevant messages. Discuss large expenses beforehand with representation and, where possible, the liability insurer. This guarantees nothing but permits earlier discussion of purpose and reasonableness than presenting one total months later.

Distinguish extra hiring and staff already employed. Record shifted duties, overtime and assignments still lost. Identify revenue preserved through replacement. The aim is a coherent comparison without the accident. Replacement costs and income loss can overlap, so have the calculation checked rather than blindly adding both sums.

Keep insurance and payments identifiable

If you hold disability insurance, check its own reporting route and conditions. Notification there differs from a claim against a liable party. Record payments with periods and reasons. Their legal treatment needs assessment: they do not necessarily have the same significance as turnover or an opponent’s compensation advance.

Ask what information your own insurer requires and share medical information through suitable channels. Accountants do not automatically need your full health history to organise finances. Medical advisers do not need all customer details for every question. Clear roles prevent indiscriminate distribution of one complete sensitive business-and-health folder.

Future earning capacity exceeds present turnover

Turnover may recover after return while you perform different tasks or need more help. Describe changes to hours, duties, business risk and expenses. Similar final totals may conceal different actual circumstances. That does not automatically establish future damage but identifies questions for vocational or financial expertise.

For future scenarios, ask how growth, markets, capacity and duration are supported. Multiplying only the best historical month creates false certainty. Assuming an enterprise would simply continue unchanged may also be wrong. Display influential assumptions separately so differences between higher and lower scenarios are understandable.

Build the initial financial file in layers

Begin with a one-page summary of legal form, personal duties, absence, known changes and current payment pressure. Add financial history and assignments. Keep medical records separate. These layers let an adviser request relevant additions without immediately copying every invoice from the whole administration.

Before instructing financial expertise, ask about scope, expense and the question to be answered. Monitor deadlines and necessary liability notices. Financial urgency may support discussing a substantiated advance, but do not present the entire future amount as an inevitable outcome. The income tool only organises figures; it assesses neither business, tax position nor legal rights.