Tax Credit for company directors...

tbumps

Hi

My husband and I both work for limited companies which we own & of which we're the joint directors. We each pay ourselves £100 per week - the companies don't make more money than that so we have no issue about dividends, etc. But I'm not sure how many hours we work for Tax Credit purposes. In practice, we both work 40 hours+ but put in some hours for both companies, not just the one that pays our wages.

I count that as work as an unpaid Director & so I have previously said that we both work at least 30 hours. But I've had a compliance letter from the TC people who queried our working hours at length last time we claimed. I don't know whether we can legally work as unpaid directors & count those working hours so whether we may lose our extra WTC/CTC for working 30 hours+. Can anyone help?

Victoria

mmgmum

hi just found this on hmrc website which may help a bit

"Working Tax Credit is based on the hours you work and get paid for, or expect to be paid for, either as an employee or a self-employed person. Unpaid work doesn't count as work when claiming tax credits. Check if your work can help you qualify for Working Tax Credit."

so therefore if you pay yourselfs 100 a week your are only working 17 h 25 mins each a week, so i can understand why it sparked a compliance investigation as you both should of been earning around 170 a week last year for 30 hours therfore they would investigate as your annual income was much less than what would of been expected if i was you i would ring tc's and advise them that you are only getting 100 a week paid and the rest of the hours worked are unpaid so therefore you are acctualy only working the hours i stated above at minimum wage
this is only my opinion based on the info found on hmrcs website above hope this helps

tbumps

Thanks, they already know that as we went through it last year. Just found out that we only have to be working 16 hours each a week so it may be easier just to tell them that & not worry about the unpaid work...