Can a Ltd company director get any benefits?

hnwestuk

Daisywing: I work 40 hours a week and pay myself £100 a week. I'm a director so I'm not bound by minimum wage, that's why it looks so terrible! I had hoped to top it up with dividends, but the company hasn't made any money the past 2 years so I've just been sliding down through my overdraft.

Claire can't have a student loan because she's doing her second degree - she had a loan for the first one and so she's not eligible for another. I've been reading up and advised her to find out if her uni will do a crisis grant. She's not in quite as much trouble as me because her boyfriend earns enough for them both, but it does seem ridiculous that she's eligible for less than I am even though we work the same amount, and she's doing uni on top! She can't get WTC because she's in full time education, even though she's also technically in full time work.

It's a bit of a weird one, trying to say how many hours we do - for instance, I could count this fact-finding as work. And all the other fruitless hours of trying to figure out a plan.

hnwestuk

Olly: So, the company has to be dormant in order for us to claim any benefits, is that right? I'm not sure that's going to be an option, as we are renting out the property so money is still coming in and out.

Soubrette: Eek! I've googled it, and found that unless we explicitly say otherwise then we're counted as 'office holders' not 'workers'. I'm perfectly happy with that assumption. We can't afford to pay the 5k, we certainly can't afford a proper salary even if we don't have backdate anything. Surely we can defer it or something? Until... never?

I'm more concerned about my business's financial state at the moment - I can get another job, either in addition or instead of what I do now; or JSA. But the business is a bit stuck.

olly300

OK I didn't realise you had money coming in and out of your business. In that case you can't let it go dormant.

However your accountant will give you advice on whether you can stop paying your salaries. Which I am sure you can if your company relies on you both paying a salary up to the tax allowance plus dividends. The thing is to make sure your company isn't insolvent.

If your partner is doing a second degree and lives with her OH who is working, then unless he is earning little they aren't entitled to anything. Lots of people are shocked when they find this out.

In your case as you have dependants and if your wife isn't working, then CAB will look at your income to see if there are any other benefits you can claim i.e. like housing benefit.

I would talk to the accountant first (use the phone) before going and seeing the CAB because then you will know what your income is.

hnwestuk

However your accountant will give you advice on whether you can stop paying your salaries. Which I am sure you can if your company relies on you both paying a salary up to the tax allowance plus dividends. The thing is to make sure your company isn't insolvent.

So, not going insolvent is an officially sensible reason to stop our salaries? That's good to know!

The rest of your answer though - most of it is negated higher in the thread. Thanks anyway, I appreciate you spending time responding.

Mk70_2

Hi I work as a Housing and Council Tax Benefit assessment officer for a local authority in London.

Firstly if you have over £16000 in savings and capital, you will not be entitled to Housing or Council Tax Benefits or Job Seekers Allowance.

If Claire rents her home, as full time student Claire wouldn't be entitled to Housing or Council Tax Benefit or, as you mentioned, Job seekers Allowance. Did she receive a student loan? Though, if she has a Child she could claim Housing and Council Tax Benefit while being a full time student.
Housing Benefit regulations state that a full time student must be under a course of study of over 16 hours per week. Is this the case? If the details of her course state that she is required to attend less than 16 hours she can claim Housing Benefit

If you rent your property and pay Council Tax, you could, as a company director, be entitled Housing and Council Tax Benefit. If you own your property, you won't be entitled to Housing Benefit but could make a claim for Council Tax Benefit.

As a company director, you'd be treated as an emloyed earner and as such, just your earned income + WTC and a tarrif income calculated from any savings or capital you have amounting to £6000 and above (i.e. bank/building society savings, shares etc. - below £6000 your savings/capital is ignored) would be taken into consideration in the assessment.

As an aside - If you live by yourself or live with other occupants who are under 18 or who are students you could claim contact the Council tax Department and ask them to give you a "Single Persons Discount" which is 25% off your years Council Tax bill.

If Claire lives by herself you should be exempt or with other students and/or no one else lives with her who is over 18, she too should contact her Council Tax Department as the property where she lives should be exempt from any Council Tax liability.

Hope this helps.

Emmzi

this is a really stupid question, but you are looking for another job, aren't you?

Daizzacat

Mk70 wrote: »

Hi I work as a Housing and Council Tax Benefit assessment officer for a local authority in London.

Firstly if you have over £16000 in savings and capital, you will not be entitled to Housing or Council Tax Benefits or Job Seekers Allowance.

If Claire rents her home, as full time student Claire wouldn't be entitled to Housing or Council Tax Benefit or, as you mentioned, Job seekers Allowance. Did she receive a student loan? Though, if she has a Child she could claim Housing and Council Tax Benefit while being a full time student.
Housing Benefit regulations state that a full time student must be under a course of study of over 16 hours per week. Is this the case? If the details of her course state that she is required to attend less than 16 hours she can claim Housing Benefit

If you rent your property and pay Council Tax, you could, as a company director, be entitled Housing and Council Tax Benefit. If you own your property, you won't be entitled to Housing Benefit but could make a claim for Council Tax Benefit.

As a company director, you'd be treated as an emloyed earner and as such, just your earned income + WTC and a tarrif income calculated from any savings or capital you have amounting to £6000 and above (i.e. bank/building society savings, shares etc. - below £6000 your savings/capital is ignored) would be taken into consideration in the assessment.

As an aside - If you live by yourself or live with other occupants who are under 18 or who are students you could claim contact the Council tax Department and ask them to give you a "Single Persons Discount" which is 25% off your years Council Tax bill.

If Claire lives by herself you should be exempt or with other students and/or no one else lives with her who is over 18, she too should contact her Council Tax Department as the property where she lives should be exempt from any Council Tax liability.

Hope this helps.

Hi, I wonder if you can help with the question like this?
How are future dividends are treated in calculating HB?
We have recently applied for HB, I am on contribution based JA, my husband on £500pcm as director. Our local authority asked us to provide projected husbands income (gross salary and dividends). Up until they received the letter from the accountant, they were telling us they will access our current income, and not future payments, as the company may go busted until then.

However, accountant wrote in the letter that dividends might be £11k, payable in January 2010, but he does not accept responsibility about anychanges in that (increased debts, lowers sales etc)

Yesterday, I have received the letter from council saying:
Your partenrs net profit from self employment is too high and you can not get HB.

Either they made mistake (as my husband is not self employed, and the dividends paid not treated as capital), or they treated dividends as notional capital.

Lost here, and although accountant promises sound nice, we know that because the season sales are over, the company will not be able to give such ammount of dividends..

Thanks for your help.

Daizzacat

Just clarify - a capital to be received can be divided by 12 and added to gross salary?

suewell

Have myself as a DIrector of a company that has not been trading since 30/12/2009 been trying to claim JSA since 10th January 2011 and have as yet not managed to sort it out. I am signing on at each appointment. I would not recommend anyone taking on a Limited Company.

I wa telephoned yesterday and asked if the company was still trading, I said no, she said but you could go back to it if you wated to......(this is the bigger picture) ......is it that you can work today but can work tomorrow.

I have explained that the company is not a viable concern as I had relocated to another part of the country.

In all this is a nightmare: its catch 22 you have a business you must be able to make money from it: if you owe money you cannot shut the comapny down and make it dormant by law but while trading no JSA = catch 22

suewell

suewell wrote: »

Have myself as a DIrector of a company that has not been trading since 30/12/2009 been trying to claim JSA since 10th January 2011 and have as yet not managed to sort it out. I am signing on at each appointment. I would not recommend anyone taking on a Limited Company.

I wa telephoned yesterday and asked if the company was still trading, I said no, she said but you could go back to it if you wated to......(this is the bigger picture) ......is it that you can work today but can work tomorrow.

I have explained that the company is not a viable concern as I had relocated to another part of the country and the shop was the going concern, I was asked about stock and fixtures and fittings too and the amount they were worth.

In all this is a nightmare: its catch 22 you have a business you must be able to make money from it: if you owe money you cannot shut the comapny down and make it dormant by law but while trading no JSA = catch 22