Universal credit & shared ownership Housing costs

londonbabe73

Am reading up on the Uc and wondering if anyone can clarify as maybe I'm reading it wrong . I current get working and child tax credit and work 35 hrs pw as a contractor thru my limited company and pay corporation tax .i also have a shared ownership property 50% I do not claim housing or ct benefit though I was prev told I may be eligible for a small amount on the rented part of my flat but I never bothered as I didnt feel I needed it and apart from my sp discount I pay the full ct .

With Uc do you automatically receive the housing 'element '? Im presuming on my rented 50% Even if you haven't previously claimed anything before ? It's not really clear so just wondered if anyone had any thoughts .

So if that is correct how is that saving money if they are going to start including housing costs automatically for people who haven't claimed Hb seems madness .....

MissMoneypenny

londonbabe73 wrote: »

I current get working and child tax credit and work 35 hrs pw as a contractor thru my limited company

Do you pay yourself at least national minimum wage per hour, from your limited company? With UC, it's the amount you earn that counts x the hours you work. The minimum hours you will be required to work, will be stated on the conditions part of your Universal Credit claim.

Under UC, you can't pay yourself less than national minimum wage to maximise your welfare claim, like you can presently do with the benefit Tax Credits. The government are stopping that for welfare claimants and Tax Credits are a welfare payment. It won't affect the wages you declare to HMC for tax purposes. Although thinking about it, if you want to claim welfare too, you will need to declare at least a wage paid at the national minimum rate, on your taxes.

Not sure about housing costs with UC.

londonbabe73 wrote: »

So if that is correct how is that saving money .

I assume the welfare state will save money by eventually increasing the hours they expect claimants to work, to the point where they are working enough hours to support their own families/think about whether they can afford extra babies. The maximum hours per week the welfare state will be initially asking a UC claimant to work to avoid conditions, is just 35 x national minimum wage: 70 hours per week x NMW maximum, for a couple to avoid the UC conditions.

Prothet_of_Doom

MissMoneypenny wrote: »

Do you pay yourself at least national minimum wage per hour, from your limited company?

.

Interestingly Directors of thier own limited company are exempt from having to pay themsleves minium wage, and could if they choose pay themselves no wage at all and claim benefits and tax credits - Usually acceptable if they are building up a new business, or the business has taken a dive.

although I guess if your turnover was large, your costs small, but you took almost nothing in salary and dividend, and left a pot of money in the Ltd Company, but made large claims for Tax Credits and benefits, there might be a point where the HMRC started asking questions.

MissMoneypenny

Prothet_of_Doom wrote: »

and claim benefits and tax credits -

Tax credits are benefits too - our 3rd most expensive welfare payment, behind state pensions and housing benefit. Tax Credits are also an income based welfare payment: hence why they are going in with all the other income based welfare payments and becoming Universal Credit.

Universal Credit will replace the income based benefits presently known as; Child Tax Credits; Housing Benefit; income based Job Seekers Allowance; Working Tax Credits; Income based ESA; Income Support.

Many people with limited companies, pay themselves a minimum wage and take the rest of the money in dividends, to reduce their tax bill. They will still be allowed to do this for PAYING taxes, but if they want to CLAIM income based welfare payments such as Universal Credit (Tax Credit benefit is going) then their benefit claim will be worked out as them earning NMW x (the hours their are required to work under their UC claim conditions). If they claim to be PAYE for their own limited company, they will still have to comply with their benefit claim conditions every month.

HappyMJ

MissMoneypenny wrote: »

Do you pay yourself at least national minimum wage per hour, from your limited company? With UC, it's the amount you earn that counts x the hours you work. The minimum hours you will be required to work, will be stated on the conditions part of your Universal Credit claim.

Under UC, you can't pay yourself less than national minimum wage to maximise your welfare claim, like you can presently do with the benefit Tax Credits. The government are stopping that for welfare claimants and Tax Credits are a welfare payment. It won't affect the wages you declare to HMC for tax purposes. Although thinking about it, if you want to claim welfare too, you will need to declare at least a wage paid at the national minimum rate, on your taxes.

Not sure about housing costs with UC.



I assume the welfare state will save money by eventually increasing the hours they expect claimants to work, to the point where they are working enough hours to support their own families/think about whether they can afford extra babies. The maximum hours per week the welfare state will be initially asking a UC claimant to work to avoid conditions, is just 35 x national minimum wage: 70 hours per week x NMW maximum, for a couple to avoid the UC conditions.

No need to pay yourself minimum wage. The optimal amount for a director to be paid is £148. That amount is not subject to either tax or national insurance and is enough to be credited with National Insurance credits. Above that amount employers National insurance of 13.8% become due and employee National insurance of 12% is also due. The remaining profit can be paid out as dividends.

londonbabe73

As I said I do not claim hb or ctax benefit even though I've been told I can as they say I don't makes the rules I just work within them. Just trying to establish what the situation is for me when tax credits stop next year so trying to financially plan ahead if I'm going to have a drop in income but the way I'm reading it is that I'm going to be awarded housing costs regardless as part of the UC surely that can't be right ?

MissMoneypenny

HappyMJ wrote: »

No need to pay yourself minimum wage. The optimal amount for a director to be paid is £148. That amount is not subject to either tax or national insurance and is enough to be credited with National Insurance credits. Above that amount employers National insurance of 13.8% become due and employee National insurance of 12% is also due. The remaining profit can be paid out as dividends.

That's for PAYING taxes and (as I said above) will still be allowed.

Paying taxes and claiming welfare payments like Tax Credits, are 2 different things and will be treated as 2 different things under Universal Credit.

princessdon

londonbabe73 wrote: »

As I said I do not claim hb or ctax benefit even though I've been told I can as they say I don't makes the rules I just work within them. Just trying to establish what the situation is for me when tax credits stop next year so trying to financially plan ahead if I'm going to have a drop in income but the way I'm reading it is that I'm going to be awarded housing costs regardless as part of the UC surely that can't be right ?

How old are your children? Do you have a partner?

MissMoneypenny

londonbabe73 wrote: »

As I said I do not claim hb or ctax benefit even though I've been told I can as they say I don't makes the rules I just work within them. Just trying to establish what the situation is for me when tax credits stop next year so trying to financially plan ahead if I'm going to have a drop in income but the way I'm reading it is that I'm going to be awarded housing costs regardless as part of the UC surely that can't be right ?

I think they are behind in their estimation of stopping Tax Credits. The amount you pay yourself per week from your limited company, might affect your claim for Universal Credit if it is less than NMW. See other posts in this thread.

londonbabe73

I'm a single person with 1 dependant , and my income for purposes of tax credits is £9k .

princessdon

londonbabe73 wrote: »

I'm a single person with 1 dependant , and my income for purposes of tax credits is £9k .

In that case conditionality isn't going to be too much of an issue - If the child is over 12 then you will be approx 2k under conditionality and its expectations.