Amex 'Household Income'

Botany

Hello,

my OH would like to apply for an Amex credit card, and the application process asks me for our household income, which must be above 30K. My OH is a contractor who operates via a limited company he directs. He has a small fixed salary (16K) and then draws dividends whenever possible. If you consider the dividends, our household is well above the 30K required, but the dividends vary from year to year so I'm not sure what we should include in the application. If I include the salary only, then there is no point applying, and surely dividends count as income?

Are there any small company directors with limited fixed salaries + variable dividends who could suggest what to do?

marksoton

Dividends are indeed income, albeit they are often taxed at a lower rate. The best information a self employed person would be able to provide would be the figures from their last tax return.

97trophy

Botany wrote: »

Are there any small company directors with limited fixed salaries + variable dividends who could suggest what to do?

Yes, I am one.

Use the average of his last 3 years dividends + fixed salary.

Botany

Thank you for your answers, good advice :beer:

FungusFighter

97trophy wrote: »

Yes, I am one.

Use the average of his last 3 years dividends + fixed salary.

No your Not, your a docker mate;)

never-in-doubt

FungusFighter wrote: »

No your Not, your a docker mate;)

lol :rotfl::rotfl:

Botany

Ok, an update on what was said above. Today, after much faffing, I finally decided to apply for AMEX (intending to put salary +dividends as income). Since the small print next to the 'income' box mentioned salary and income from investments but not divis, I thought I'd give AMEX a ring 'just in case' and I asked them if I could consider dividends as income, expecting them to say yes of course (I'm panic-prone and I like to double-check and triple-check things). Anyway, the man on the phone told me I could not include dividends. I protested - told him this is silly as dividends make up most of the income in our household. He seemed nice and concerned and asked a colleague but then confirmed that dividends should not be incuded in the 'household income' part of the form.

No AMEX for us then...

Anyway, I thought I'd mention it in case someone else in a similar sitaution wanted to apply for this card. They've got an 0800 so might as well give them a ring and see what they say. Just my two pence.

PS .... this attitude on the part of AMEX is really silly beyond belief.... why turn down people with money to spend (legal, clean, good money) on a technicality on whether that money is classed as salary or divis on a tax return???

Rant over :mad:

olly300

OP you are funny. I would never have bothered to phone Amex up.

If the question is "household income" not "household salary" then you are well within your rights to apply for a card with the "household income" figure stated.

If you got the card and some point along the line they disputed it, you would have fun taking them to the FOS (if you had a loss) and reporting them to the FSA for misleading consumers.

Degenerate

Botany wrote: »

PS .... this attitude on the part of AMEX is really silly beyond belief.... why turn down people with money to spend (legal, clean, good money) on a technicality on whether that money is classed as salary or divis on a tax return???

It's a bit of a grey area. Dividends are indeed income, the problem is whether they can be considered regular income, as they are not a contractually guaranteed payment. Companies can reduce or halt dividends at any time at the discretion of the board, and dividends are legally limited by the profitability of the company, whereas a loss-making company still pays out wages (at least until bankruptcy.) Although it's really a different situation with a small company such as yours, where there are one or two main shareholders who also control the company, Amex are within their rights to consider them the same as dividends from any other source.

Incidentally, why a £16K salary? I'm in the same situation and we pay ourselves just our personal allowance as salary, and the rest entirely made up from dividends. There's a big saving in NI contributions doing it that way.