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  • FIRST POST
    • Lionel Itchie
    • By Lionel Itchie 22nd Mar 17, 1:04 PM
    • 23Posts
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    Lionel Itchie
    Housing Benefit : How is income and capital worked out for Ltd companies?
    • #1
    • 22nd Mar 17, 1:04 PM
    Housing Benefit : How is income and capital worked out for Ltd companies? 22nd Mar 17 at 1:04 PM
    If you have a Ltd company, and it's a one man band (you're the director and sole shareholder), how does the council assess what your income and capital is when working out housing benefit / council tax?
Page 3
    • FBaby
    • By FBaby 25th Mar 17, 7:31 AM
    • 15,791 Posts
    • 39,491 Thanks
    FBaby
    My line Manager said I had to accept his income was just £100 per month! I made sure I had that advice in writing and processed the claim.
    Why did you have to ask your line manager? Is it because you didn't know all the legislation at the time, or is it because it was a case of someone in authority making the decision?

    If it's the latter, isn't there a risk that another manager could advise differently and decide to investigate?
    • minimoo1
    • By minimoo1 7th Jul 17, 1:54 PM
    • 2 Posts
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    minimoo1
    Rules from my local council
    I was so fed up with different people saying differers things at my local council that i made formal complaint and said they need to provide information on the rules etc if they are going to make decisions based on rules.

    They sent me this 1 year ago:
    Regulation 38 Calculation of net profit of self-employed earners

    (1) For the purposes of regulation 30 (average weekly earnings of self-employed earners) the earnings of a claimant to be taken into account shall be—
    (a) in the case of a self-employed earner who is engaged in employment on his own account, the net profit derived from that employment;
    (b) in the case of a self-employed earner whose employment is carried on in partnership or is that of a share fisherman within the meaning of the Social Security (Mariners´ Benefits) Regulations 1975(c), his share of the net profit derived from that employment, less—
    (i) an amount in respect of income tax and of national insurance contributions payable under the Act calculated in accordance with regulation 39 (deduction of tax and contributions for self-employed earners); and
    (ii) one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.
    (2) There shall be disregarded from a claimant´s net profit, any sum, where applicable, specified in paragraphs 1 to 14 of Schedule 4.
    (3) For the purposes of paragraph (1)(a) the net profit of the employment shall, except where paragraph (9) applies, be calculated by taking into account the earnings of the employment over the assessment period less—
    (a) subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of that employment;
    (b) an amount in respect of—
    (i) income tax; and
    (ii) national insurance contributions payable under the Act, calculated in accordance with regulation 39 (deduction of tax and contributions for self-employed earners); and
    (c) one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.
    (4) For the purposes of paragraph (1)(b) the net profit of the employment shall be calculated by taking into account the earnings of the employment over the assessment period less, subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of the employment.
    (5) Subject to paragraph (6), no deduction shall be made under paragraph (3)(a) or (4), in respect of—
    (a) any capital expenditure;
    (b) the depreciation of any capital asset;
    (c) any sum employed or intended to be employed in the setting up or expansion of the employment;
    (d) any loss incurred before the beginning of the assessment period;
    (e) the repayment of capital on any loan taken out for the purposes of the employment;
    (f) any expenses incurred in providing business entertainment; and
    (g) any debts, except bad debts proved to be such, but this sub-paragraph shall not apply to any expenses incurred in the recovery of a debt.
    (6) A deduction shall be made under paragraph (3)(a) or (4) in respect of the repayment of capital on any loan used for—
    (a) the replacement in the course of business of equipment or machinery; and
    (b) the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair.
    (7) The relevant authority shall refuse to make a deduction in respect of any expenses under paragraph (3)(a) or (4) where it is not satisfied given the nature and the amount of the expense that it has been reasonably incurred.
    (8) For the avoidance of doubt—
    (a) a deduction shall not be made under paragraph (3)(a) or (4) in respect of any sum unless it has been expended for the purposes of the business;
    (b) a deduction shall be made thereunder in respect of—
    (i) the excess of any value added tax paid over value added tax received in the assessment period;
    (ii) any income expended in the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair;
    (iii) any payment of interest on a loan taken out for the purposes of the employment.
    (9) Where a claimant is engaged in employment as a child minder the net profit of the employment shall be one-third of the earnings of that employment, less—
    (a) an amount in respect of—
    (i) income tax; and
    (ii) national insurance contributions payable under the Act, calculated in accordance with regulation 39 (deduction of tax and contributions for self-employed earners); and
    (b) one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.
    (10) For the avoidance of doubt where a claimant is engaged in employment as a self-employed earner and he is also engaged in one or more other employments as a self-employed or employed earner any loss incurred in any one of his employments shall not be offset against his earnings in any other of his employments.
    (11) The amount in respect of any qualifying premium shall be calculated by multiplying the daily amount of the qualifying premium by the number equal to the number of days in the assessment period; and for the purposes of this regulation the daily amount of the qualifying premium shall be determined—
    (a) where the qualifying premium is payable monthly, by multiplying the amount of the qualifying premium by 12 and dividing the product by 365;
    (b) in any other case, by dividing the amount of the qualifying premium by the number equal to the number of days in the period to which the qualifying premium relates.
    (12) In this regulation, "qualifying premium" means any premium which is payable periodically in respect of a personal pension scheme and is so payable on or after the date of claim.

    A lot of it seems gobbled de goop!
    • minimoo1
    • By minimoo1 7th Jul 17, 2:03 PM
    • 2 Posts
    • 0 Thanks
    minimoo1
    Bear in mind many people in the council dealing with your paperwork have NO or very limited training or qualifications in this type of assessment. Lots don't even know what Capital expenditure or capital profit or capital income is. This was their words to me last year which provoked a complaint from me.

    I have been a sole trader for a number of years whilst i have been trying to grow my business and have needed housing benefit to help me make ends meet. I would like to become a limited company now so that I can obtain certain professional registrations which I can only apply for if I am a limited company. this will, I hope in turn improve my business place in the ,market, improve my sales and reduce if not eliminate the need for housing benefit at all.

    I am really perplexed however that there is not a simple brochure about this at the council with all the rules in. They seem to have one for every other situation. Quite simply it is not about trying to get benefits but in order to make good choices, you need to know all the rules. Lets just say I decided to become a limited company, did it and took a chance on the council not cutting my housing benefit as there are no clear rules imprint on this at my council anyway. Then the council turn round and say, you cant get housing benefit. How will i pay the rent? I tried working and starting my business a few years back, in nearly killed me.
    So really a reasonable measure of information and response is required all the way round i think.
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