Universal credit & shared ownership Housing costs

oldboy64

Prothet_of_Doom wrote: »

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.

You are absolutely right. Directors whilst employees of the company are in fact 'officers' of the company and are exempt from having to justify their low wage. This is normally shown in the accounts as a 'loan account' They have a 'current account' out of which they can draw whatever they like.

Many director friends that I know already play this game with the company having a substantial cash deposit which is undrawn income of the directors. The purpose of this is that the money is 'loaned' to the company to provide additional capital.

They take only the bare minimum they need say £50 a week, leaving £10,000's in the company that cannot be treated as income.
Consequently they then rake in as much as possible via benefits to subsidise their 'low' wage. You could say that the state provides 'grants' to the company indirectly that are not repayable.

Even large companies have found this to be a very attractive proposition in the past when applying for grants for expansion from the government - on paper the company is struggling only being kept afloat using the wages that the directors haven't taken out.

londonbabe73

Son is 10 , but my income obviously changes it gone up this year and will probably rise again as I've had pretty continuous work this year

MissMoneypenny

londonbabe73 wrote: »

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

Which means that you don't pay yourself the minimum wage from your limited company for your 35 hours you work per week. Which doesn't matter at the moment for the benefits you claim, but it will matter by the time your child is over 12 and you claim Universal Credit; although there is (limited) transitional protection, for some claimants.

londonbabe73 wrote: »

With Uc do you automatically receive the housing 'element '? Im presuming on my rented 50% Even if you haven't previously claimed anything before ?

I'm not sure if it will be automatic as I assume you will have to give the figures if you want to claim this element. They can't force you to take extra benefits. I believe I read that those who want to claim Universal Credit, will have to claim UC every month, as oppose to the yearly claims (for Tax Credits) that claimants make now. I'm sure someone will correct me if that is wrong.

If you end up losing some of your benefits because you can't earn the 35 hours mimimum wage ((35 x £6.31) x 52 = £11,484.20 from 1 October 2013), wouldn't it be better to try to claim for any housing you can get too, to make up for any shortfall from your previous benefits?

Or are you saying that you just don't want to claim for any housing help? Universal Credit is the "one payment benefit", instead of receiving lots of different amounts at different times to your bank account, so it won't show up on your bank statement as "housing". I assume it will be between you and the government, what exactly you are claiming for.