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Housing Benefit & Ltd Company

dirkziggler
Posts: 3 Newbie
Hi all!
We currently get some assistance with rent (housing benefit). In the past we were self employed and were required to send our business accounts to the council to show our earnings.
We have now moved to become a Ltd Company and myself and wife are directors and now pay ourselves a wage from the company.
The council now want full profit and loss statement from the Ltd Company to see how it is trading.
I thought that our payslips would be enough to show what were earning.
Do they have a right to ask for full limited company accounts? Isnt housing benefit based on salary/income/etc?
We have nothing to hide and have only a small wage which we are more than willing to show for.
I guess ultimately Ltd Co accounts are available to the public at companies house if they really want it.
Thanks for any advice. :T
We currently get some assistance with rent (housing benefit). In the past we were self employed and were required to send our business accounts to the council to show our earnings.
We have now moved to become a Ltd Company and myself and wife are directors and now pay ourselves a wage from the company.
The council now want full profit and loss statement from the Ltd Company to see how it is trading.
I thought that our payslips would be enough to show what were earning.
Do they have a right to ask for full limited company accounts? Isnt housing benefit based on salary/income/etc?
We have nothing to hide and have only a small wage which we are more than willing to show for.
I guess ultimately Ltd Co accounts are available to the public at companies house if they really want it.
Thanks for any advice. :T
0
Comments
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Ltd. company accounts for a small company are available but a year later than what council need.
Yes they have a right to ask about closely held companies....i.e the company that you own quite a large percentage of.
They will add the profit of the company to your declared wages to determine your housing benefit.:footie:Regular savers earn 6% interest (HSBC, First Direct, M&S)
Loans cost 2.9% per year (Nationwide) = FREE money.
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I suppose the council want to see the full turnover and actual profit of the company to help with calculations.
As you know, company directors can pay themselves a wage (usually a small one to lessen tax/NI) and then either keep the profits in the business bank account to re-invest or pay themselves dividends separately and in addition to their salary.
I expect the council want full info on what is coming in and out of the company, the net income.
I've seen on posts related to tax credit queries the belief (don't know if it is false) that someone running a limited company only have to declare the salary they pay themselves and not their actual profit. They believe that if they only pay a salary of 6k per annum for example, they don't have to declare the fact that their business bank account is essentially a savings account for them, one where they don't want to make any withdrawals via dividends for themselves because they either want to reinvest into the business or want to minimise their income in order to maximise their benefits.
Is it your belief that only the salary that you pay yourself from the profit is counted for housing benefit and that the balance in your business account and any dividends that you pay yourself are irrelevant?0 -
Hi HappyMJ
Thanks so much for your prompt response!
Cheers! :j0 -
Yes, your Ltd company could have the ability to pay you £200k/year ... but you might only be paying yourselves minimum wage on paper.... in order to claim benefits. So they're just checking if you're having sleight of hand over the income.0
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I would have thought that all salary and dividends paid to myself should be taken into account when it comes to benefits.
Balance in business account doesn't really benefit me at the moment as its there for the business purposes and day to day expenses.I suppose the council want to see the full turnover and actual profit of the company to help with calculations.
As you know, company directors can pay themselves a wage (usually a small one to lessen tax/NI) and then either keep the profits in the business bank account to re-invest or pay themselves dividends separately and in addition to their salary.
I expect the council want full info on what is coming in and out of the company.
I've seen on posts related to tax credit queries the belief (don't know if it is false) that someone running a limited company only have to declare the salary they pay themselves and not their actual profit.
Is it your belief that only the salary that you pay yourself from the profit is counted for housing benefit and that the balance in your business account and any dividends that you pay yourself are irrelevant?0
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