Claiming benefits as a company director

barginseeker

mandij30 wrote: »

Shocking Grammar for a Teacher lol

ha ha... lmao, hope he doesn't get a job at my kiddies school!!

leveller2911

I,m NO accountant but ive been self employed for 22 yrs and I can tell you there are very few "perks" now for being limited.
If your OH isn't working and she may well be your secretary why don't you form a partnership at least you can use her tax allowance and you can spread the tax liability between you.
I just don't get all this LTD crap anymore..for one thing your accounts need to be audited each year and your accountancy bill will probably treble at least.Once Ltd you don't own the company and It can be a real job realising the assets .

Jowo_2

The following council give out a form to self-employed people claiming housing benefit which is similar to yours -a company has not previously submitted an annual account.

http://www.carlisle.gov.uk/advice_and_benefits/benefits/housing_benefits/how_do_i_claim_housing_benefit/benefit_in_work.aspx

http://www.carlisle.gov.uk/PDF/BENS_Self_employed_pro_forma.pdf

This form is focussed on profit (income minus expenses) and doesn't care how it is distributed (i.e. through dividends or salary).

If this is representative, then your desire to reduce your impact on benefit entitlement by paying yourself the minimum wage and leaving a nest egg in the business account to pay to yourself later as a dividend isn't going to work. In your mind, it's dormant money but not according to the local council.

There's another leaflet here that covers HB and CT and again, a claimant has to show their full income and receipts to prove expenses.

http://www.cheltenham.gov.uk/downloads/self_emp.pdf

AndyLGR

tidy_sum wrote: »

Correct NASA, it would, and would have to be declared as such. A director is just an employee of the company.

Also OP, any dividends received will also have to be included for Tax Credit purposes - probably when you make your Section 17 End of Year Declaration.

How do the TCO know you are a director of a company? Do they check up on the company name and its address and its directors?

Or do they know you are a director once you declare your dividend to the TCO?

Jowo_2

AndyLGR,

I am a self-employed company director and have an accountant who completes my tax return. If I remember rightly, the tax returns always request the national insurance number. How the tax systems and benefit systems interact, I can't tell you.

Suppose the OP was earning £500 per week for this teaching contract, based on a reasonable hourly rate of £12.50 - this means a healthy monthly gross income of £2166, equivalent to an annual salary of 25k. I know this is just a theoretical rule of thumb sum, it could be nothing like it. Clearly, they hope that they can reduce its impact on benefits by not giving themselves dividends until such time that they are no longer drawing benefits and then later convert the nest egg in their business account into a divi.

But most benefits are means tested and someone earning a decent full time wage is rightly not eligible for much in the period in which they are drawing what amounts to be a living wage.