Director of a Ltd Company

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Potbellypig
Potbellypig Posts: 775 Forumite
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in Benefits & tax credits
Looking for some information or advise on claiming benefits as a Director of a Ltd company.

I earned circa £32k last tax year as PAYE and my partner earned about £8k. Since March 24th 2016 I changed to become the Director of a Ltd company. This tax year I will earn about £11k in wages and my partner will get about £11k in wages (not through my business). However, the company will turn a profit in which I will get dividends for (amount to be confirmed).

I have 2 children, rent a house and haven't claimed benefits for a couple of years.

How does it work for a Director of a Ltd company?
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  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    Potbellypig wrote: »
    How does it work for a Director of a Ltd company?

    Dividends are just another form of declarable income, so you'd declare your wages AND dividends as your household income.
  • Potbellypig
    Potbellypig Posts: 775 Forumite
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    Pennywise wrote: »
    Dividends are just another form of declarable income, so you'd declare your wages AND dividends as your household income.

    Thanks. Then it starts to potentially get messy. If I declare £Xk and end up with £Yk dividends then I'm on the road to OverpaymentVille.

    Am I missing anything else? Is it as clear cut as the only income that's attributable to me is my salary from the business and dividends? Anything that's left in the business (even though I'm the only director of the business) actually has nothing to do with the income that they take into account?

    Is it worth waiting until after April to a) see how much dividends I take out and b) don't they take the previous tax years income into account when giving you your benefits?
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    What benefits are you claiming/looking to claim?

    Different benefits have different rules.

    How many hours do you both work per week?

    Do you have childcare costs?
  • Potbellypig
    Potbellypig Posts: 775 Forumite
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    Darksparkle wrote: »
    What benefits are you claiming/looking to claim?

    Different benefits have different rules.

    How many hours do you both work per week?

    Do you have childcare costs?

    I assume we're entitled to child tax, working tax, housing bens and c/tax bens. We get the child benefit every 4 weeks.

    I work 40+, my partner works 37.

    No childcare costs at all.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    Your household income is too high for WTC. CTC will depend on how much the dividends and any other taxable income are. The cut off is approx £33,000 for 2 children (if no childcare or disabilities).

    Can't help with housing benefit/council tax but with a household income of at least £22,000 I don't imagine there would be that much available as it's not that low an income.
  • heartbreak_star
    heartbreak_star Posts: 8,286 Forumite
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    This ^^ Why on earth would you get benefits on a £22k income?

    Good luck with the company though :)

    HBS x
    "I believe in ordinary acts of bravery, in the courage that drives one person to stand up for another."

    "It's easy to know what you're against, quite another to know what you're for."

    #Bremainer
  • MataNui
    MataNui Posts: 1,075 Forumite
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    This doesnt work. I used to be in a similar position and in the end we just closed our tax credits claim (even though some years we would of been entitled to quite a bit). Its just really, really REALLY not worth the crap of having to spend so much time dealing with HMRC about overpayments and underpayments and the lies they tell about when they were notified etc.
  • Alice_Holt
    Alice_Holt Posts: 5,949 Forumite
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    Try:
    http://www.entitledto.co.uk/benefits-calculator/entitlementcalculator.aspx

    https://www.turn2us.org.uk/Find-Benefits-Grants

    At that income (£22k plus dividends) possibly only CTC.
    Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.
  • Potbellypig
    Potbellypig Posts: 775 Forumite
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    Need a bit of an update on this please, as my partner is starting a new job which I'll need roughly £90 a month of childcare costs for...

    So my company turned over £44k last tax year of which I paid myself a salary of £11k. The company turned a profit but it's staying in the company. No dividends. My partner earned £11k from her job. As per before, we have 2 kids and rent a house. After looking at the possibilities and reading on here, it's clear HB and C/tax benefit isn't worth the hassle.

    First question - is it worth claiming for CTC and childcare? On £22k the past tax year and £22k this year - any idea how much CTC and childcare would we be entitled to?

    Second question - if we did claim CTC and childcare, how does it sit legally with me being the Director of a Ltd company and paying myself a wage? I understand that legally they are 2 separate entities, however if the lovely people at the benefits office wanted to see my bank statements then I'm sure they could work out that I have spent more than £22k on bills and 'personal stuff' on a yearly basis. The last thing I want is to claim this and have thousands to pay back.

    Any help would be greatly appreciated.
  • Potbellypig
    Potbellypig Posts: 775 Forumite
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    Ignore the first question - I've just seen the link above it and done it. It works out at £101 a week (£5200 a year).
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