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Moving back into work and maximising benefits / work income
property.advert
Posts: 4,086 Forumite
I'm looking at getting some work but whilst I can plug numbers into calculators, my options are more complex and there is no online answer to my situation available that I can see. I wonder if you'd have a look and comment.
I currently receive Income Support (IS - £278) , Housing Benefit (HB - £965), Council Tax Benefit (CTB - £100), Child Tax Credits (CTC - £235) and Child Benefit (CB - £86) for one child. I know I will retain the CB whatever happens. Figures are monthly.
If I get work, it is likely I will be on contract. I will work through an agency but I will also work for and through an umbrella company (UC), so that I can offset expenses against taxes etc. The alternative if IR35 compliant is to use an Ltd Co. and invoice the agency directly.
If using a UC I would most likely be paid a salary of minimum wage or thereabouts. The same would be true of a Ltd Co. The remainder of income, via either method, would be dispersed via other methods, all maximising net returns within the law.
Of course, the easy answer is just to stop claiming everything but that is not being prudent. My problem is how to answer any questions on how much I earn and how to avoid any benefits overpayments. I'm not on about an end of year tidy up with a few pounds here or there but large overpayments.
I know that fundamentally I move from CTC to WTC when in work and I would also be eligible for some childcare assistance up to £140 per week.
I'm having a real problem trying to get to grips with what my net position could be, depending on how it is structures. Going PAYE is not an option.
Any ideas ?
I currently receive Income Support (IS - £278) , Housing Benefit (HB - £965), Council Tax Benefit (CTB - £100), Child Tax Credits (CTC - £235) and Child Benefit (CB - £86) for one child. I know I will retain the CB whatever happens. Figures are monthly.
If I get work, it is likely I will be on contract. I will work through an agency but I will also work for and through an umbrella company (UC), so that I can offset expenses against taxes etc. The alternative if IR35 compliant is to use an Ltd Co. and invoice the agency directly.
If using a UC I would most likely be paid a salary of minimum wage or thereabouts. The same would be true of a Ltd Co. The remainder of income, via either method, would be dispersed via other methods, all maximising net returns within the law.
Of course, the easy answer is just to stop claiming everything but that is not being prudent. My problem is how to answer any questions on how much I earn and how to avoid any benefits overpayments. I'm not on about an end of year tidy up with a few pounds here or there but large overpayments.
I know that fundamentally I move from CTC to WTC when in work and I would also be eligible for some childcare assistance up to £140 per week.
I'm having a real problem trying to get to grips with what my net position could be, depending on how it is structures. Going PAYE is not an option.
Any ideas ?
0
Comments
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How about you just be honest when declaring your earnings?
Gone ... or have I?0 -
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Morgan_Ree wrote: »God you're hilarious!
Have a pat (or thanks) on the back and take yesterday off :T
Looks like I was correct.0 -
Looks like I was correct.
Be careful, someone will start a thread about you!
Sorry OP, we are going off topic. There is however only one piece of advice that you need - be honest about the income that you have. Doing this means there is no scope for any comeback on you, and your children will be proud of you wanting to provide for them yourself. Good luck getting back into work! Gone ... or have I?0 -
property.advert wrote: »I know that fundamentally I move from CTC to WTC when in work and I would also be eligible for some childcare assistance up to £140 per week.
I thought parents got both, if their income was low enough? Sealed pot challenge #232. Gold stars from Sue-UU - :staradmin :staradmin £75.29 banked
50p saver #40 £20 banked
Virtual sealed pot #178 £80.250 -
Agree wholeheartedly with DMG - just be honest with your pay information and you should be fine in regards to overpayments. The only real issue with overpayment problems is if you're not honest with your information.
With regards to what you might receive, you say you have one child, but as you are claiming IS, I assume (maybe wrongly) you are a single parent. You should also be claiming child support from your child's father (although while not working, some of that would be claimed back I'm sure to alleviate the burden on the system.) Wondering why with five children.....I work after reading the above!0 -
AnxiousMum wrote: »Agree wholeheartedly with DMG - just be honest with your pay information and you should be fine in regards to overpayments. The only real issue with overpayment problems is if you're not honest with your information.
With regards to what you might receive, you say you have one child, but as you are claiming IS, I assume (maybe wrongly) you are a single parent. You should also be claiming child support from your child's father (although while not working, some of that would be claimed back I'm sure to alleviate the burden on the system.) Wondering why with five children.....I work after reading the above!
ROTFLMAO :rotfl:- thanks. I am the child's father :beer:Be careful, someone will start a thread about you!
Sorry OP, we are going off topic. There is however only one piece of advice that you need - be honest about the income that you have. Doing this means there is no scope for any comeback on you, and your children will be proud of you wanting to provide for them yourself. Good luck getting back into work!How about you just be honest when declaring your earnings?
It really is hard to explain how it all works without boring everyone senseless but it is tax mitigation, not tax avoidance.
I know that the perfect result is to move to a 3 bed house and get a live in nanny but the chicken / egg problem of not being able to set that up financially before starting work means no live in help and my having to get before nursery and after nursery care. I've been putting off focussing on work because of this but I can't stagnate and banging out surveys and the like is not going to buy big ticket items or improve my lot very much.
The HB I get is high because of where we live but if I went to rent where I used to live, a 2 bed flat would cost the state around £495 per week in HB and that would probably mean no work, ever !
The thing is that you have to put down your estimates for the year, which is easy if you are on a set wage but that is not possible and contracts are for varying lengths with voids in between. Whether allowed or not, I do not want to state minimum wage and then tidy it all up at the end of the tax year when all receipts and expenses are in and dividends can be paid out. Not only would that mean a large bill but also it is too complex for them to understand and they'd get lost in translation. I only see me as the loser in this.
My sensible head is to guestimate and go with that, keeping a spreadsheet weekly which matches the actual against the predicted and then maybe making corrections every 3 months.
If I had a slab of money to kick off with then I would not worry so much but I will have to commit to expenses of about £1000-1200 a month before anything comes in just for the childcare.
Finally, I have to pitch a price for contracts in some cases so I really need to think it through and make sure that after the dust settles, I come out ahead. Otherwise, I might as well resign my fate as not being able to go back to that good income but high expenses line of work and try and start a small business which brings in the same net but which does not need the high onward costs.
Thanks0 -
I am well aware of the purpose of umbrella companies. If you intend to be honest then just overestimate your true income initially and then the worst that can happen is a nice bonus at a later date.Gone ... or have I?0
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