Working Tax Credits - Repaying

leveller2911

pierrelejohn wrote: »

So as a business person yourself - self employed - what happened when you bought your tools, equipment, van, etc.

I presume you paid for them from your business, or did you pay for them from your own pocket, then reclaimed the money back,

did your income drop - because you needed this investment ?
if so what did you do ?

All of my plant and machinery was paid for as and when I could afford to buy it.All of the investment was paid for out of my earnings.All of my equipment was paid for by me and NOT the tax paying public.One machine cost £12,000 which I saved up for(took me a few years).Of course my income was lower but I just worked harder to try and make up the difference.

as an employer of 8 people all paying tax and NI (and no they aren't on the minimum wage) collecting VAT for the government our business pays a huge amount of tax.

Your employees are paying their tax not you, you may be stopping it from their wages and forwarding it to HMRC but its not your tax its theirs.Lastly.

Lastly as for the VAT that you "COLLECT" isn't your money thats being paid to HMRC its the end user so why bring that up?....

Sorry my friend but you cannot justify your actions......Disgraceful


At the end of the day youve manipulated the system, earning over £40k a year and £500 a month WFTC....

Jowo_2

Is it totally legit for the tax credits to be based upon the salary (and any additional dividends drawn) and not on the business income generated after expenses?

In other words, is the tax credits assessment based solely upon the money drawn out of the business rather than the balance in the business bank account?

I'm just looking here for clarification on how HMRC perform the assessment, wondering whether a self-employed person is judged on what they extract out of the business rather than than a more holistic turnover approach (basic profit calculation of income minus expenses).

Deepmistrust

leveller2911 wrote: »

The facts are rather than taking earnings as income you invested your income from the business back into the business, you earned the money my friend end off.Why should the tax payer subsidise the investment of your company by giving you benefits..

Oh and lastly don't play the old "corporation tax" gag,(you may pay corporation tax but pay naff all in income tax) the two main reasons people set up a LTD company is 1/ Limited Liability with company debts and 2/ Tax incentives.....

It still stands that you earn £40k plus and your getting £500 a month tax credits....

PS Ive been self employed and run my own business for nearly 25yrs and I know about being LTD....

Isn't self-employed different though. I thought Self Employed persons (i.e. sole trader) was defined that they and the business is one entity.

Whereas a limited company is a seperate entity (in it's own right) from it's directors. So the income of a sole trader is their profit or loss, but the income in this case is the drawings or wages paid to the directors?

Edit: Though I have no idea what figures HMRC use from income purposes for limited companies. I'm assuming as your money is capital and tied up in the business it falls under the normal rules as applies to anyone - that only interest earned on capital is considered. So unless you pay yourself dividends, I doubt they would consider it. But I'm just guessing to be honest.

Deepmistrust

Jowo wrote: »

Is it totally legit for the tax credits to be based upon the salary (and any additional dividends drawn) and not on the business income generated after expenses?

In other words, is the tax credits assessment based solely upon the money drawn out of the business rather than the balance in the business bank account?

I'm just looking here for clarification on how HMRC perform the assessment, wondering whether a self-employed person is judged on what they extract out of the business rather than than a more holistic turnover approach (basic profit calculation of income minus expenses).

I was thinking the exact same thing

leveller2911

Jowo wrote: »

Is it totally legit for the tax credits to be based upon the salary (and any additional dividends drawn) and not on the business income generated after expenses?

In other words, is the tax credits assessment based solely upon the money drawn out of the business rather than the balance in the business bank account?

I'm just looking here for clarification on how HMRC perform the assessment, wondering whether a self-employed person is judged on what they extract out of the business rather than than a more holistic turnover approach (basic profit calculation of income minus expenses).

There is more than likely a loop hole the OP is using.He might not have intended too do so and the Benefit Agency arent exactly the sharpest knives in the draw...It can't be right for someone who earns over £40k a year to also get £500 a month in TC,s

leveller2911

Deepmistrust wrote: »

Isn't self-employed different though. I thought Self Employed persons (i.e. sole trader) was defined that they and the business is one entity.

Whereas a limited company is a seperate entity (in it's own right) from it's directors. So the income of a sole trader is their profit or loss, but the income in this case is the drawings or wages paid to the directors?

Edit: Though I have no idea what figures HMRC use from income purposes for limited companies. I'm assuming as your money is capital and tied up in the business it falls under the normal rules as applies to anyone - that only interest earned on capital is considered. So unless you pay yourself dividends, I doubt they would consider it. But I'm just guessing to be honest.

There are a cpl of chaps/chapesses on hear who hopefully can clarify it.My point is they clearly earn decent money but chose to invest all but £12k in their business rather than take it all as a divi.They then Pay themselves a dividend of £12k only when they could have paid themselves the normal £40k and in doing so are then eligable for £500 a month TC,s...Which basically means you and I have indirectly subsidised his business.He then goes on to say he pays corporation tax, but neglects to also say that in being LTD they pay sod all income tax...Trying to justify it...

From my understanding of being LTD there are as many cons as there are pro,s now.I was advised against going Ltd, one of the cons is being able to realise the assets of the company in later years.

Nice sig Deepmist, have you read his books on Anarchism?? Excellant reading

Deepmistrust

leveller2911 wrote: »

There is more than likely a loop hole the OP is using.He might not have intended too do so and the Benefit Agency arent exactly the sharpest knives in the draw...It can't be right for someone who earns over £40k a year to also get £500 a month in TC,s

if he is using any loophole, it's the one that means his entitlement NOW is based on his lower income of £11k last year.

To be fair, that could happen to anyone who takes a massive rise in earnings this year. Their entitlement is still based upon last years figures.

The other loophole, is that his capital assets are not taken into account. So a person can effectively be sitting in (and owning) a £3 million pound house, and claiming the same if they also do a spot of work each week.

Deepmistrust

leveller2911 wrote: »

There are a cpl of chaps/chapesses on hear who hopefully can clarify it.

Nice sig Deepmist, have you read his books on Anarchism?? Excellant reading

There is nothing he has written that I disagree with
The man has this world sussed.

pierrelejohn

I visited the link above
Benefits Check Up: 5 mins to get what you're entitled to

but I really shouldnt have gone - because I dont actually deserve anything

All of my plant and machinery was paid for as and when I could afford to buy it.All of the investment was paid for out of my earnings.All of my equipment was paid for by me and NOT the tax paying public.One machine cost £12,000 which I saved up for(took me a few years).Of course my income was lower but I just worked harder to try and make up the difference.

good for you -highly commendable - not quite sure how the tax paying public stumped up all the money for our investment though, we have only been awarded £4500 (by the way it was the tax credits people giving it to us - we didn't even realise we were entitled to it - OOOOPs we aren't though are we)

Your employees are paying their tax not you, you may be stopping it from their wages and forwarding it to HMRC but its not your tax its theirs

yes - I still pay their NI, but at least im employing people, at least they are not claiming the dole, or other benefits that they arent entitled to.

Lastly as for the VAT that you "COLLECT" isn't your money thats being paid to HMRC its the end user so why bring that up?....

Well its just another tax, and as I have invested in the company our turnover has gone over the threshold meaning that we have to charge VAT unlike you probably who doesn't.

but the goverment is probably going to raise the VAT to 20% anyway to help lower this huge debt that exists because they are claiming things they shouldn't.
but vat doesn't come into it

£4500 benefit claim in 25 years of working.
I am totally ashamed of myself !

leveller2911

Deepmistrust wrote: »

There is nothing he has written that I disagree with
The man has this world sussed.

Yep, I couldn't agree more.His ideas of Anarchism are spot on,shame those in power don't agree but I guess they wouldnt be in power if they did..:D