Benefit Fraud or Just Plainly Immoral? [Housing Benefit]

NewUserHere

Okay, so two of us and one dependent (2 yo).
She earns £140/week (employed).
I earn £150/week (self employed). Was avg £230/week until I went back to college FT (16hrs/week locally).
Household savings about £1500, but being used for course fees (as below).

So i've calculated we are entitled to a tiny amount of housing benefit, possibly none if earnings between April-Sep are taken in to consideration.

So I have a dormant Ltd company, and am aware for HB purposes I enter employed and can provide PAYE payslips.

So if I bring the company back to life and operate as Ltd with my £150/wk, pay myself £70/week, then I should get about £50/week HB. In the meantime until april the remaining £80pw will accumulate. So come next April the company will be holding about £2500 which will be paid as a bonus under paye in the new tax year. So obviously come new tax year i'm unlikely to be eligible for HB with this large bonus payment but my child tax credit calculation for 15/16 will benefit as my 'income' for 14/15 will be based on the £70/week. Then by time 16/17 tax year comes about and this £2.5k bonus payment + the income for that year is considered I should be out of education and in to a career.

So is there anything wrong with this? Legally?

Morally I suppose it's a blatant abuse (?) but i'm looking for short-term gains over the next 1 year or so just to support us whilst i'm in education.

tomtontom

Immoral. Great example to set to your child.

NewUserHere

tomtontom wrote: »

Immoral. Great example to set to your child.

When you've worked years in a menial job without any of the perks you get under PAYE through genuine employment earning between £4.40 and £5.40 then come back and tell me if you would do what you could to turn things around.

In the meantime, my desire is to create a better quality of life in the longrun whilst maintaining at least a very modest quality of life in the shorter term.

I have no doubt there are some immoral issues here, but really looking for any pointers on the legal side of things also if anybody knows.

nannytone_2

tom answered the question you asked and now youre complaining ?
you asked 'benefit fraud or just immoral'
tom said 'immoral'

dippy3103

You said bring the company back to life? Are you currently s/e but proposing employing yourself & paying yourself £70 per week for the same work you were getting £150 per week?

What would you declare

sandie11_2

Compared to the way millions of people in this country have ripped off the system I would say it's not too bad.

We have struggled all our lives working to end up with nothing. While others we know have never lifted a finger and are extremely well off. So do it, you might as well.

Housing_Benefit_Officer

Self employed - income minus expenses = income used for benefit purposes.

Company Director - drawings or directors remunerations = income for benefit purposes.

Nothing wrong in becoming a company director to reduce income - perfectly legal and a good accountant will guide their client to the best way to minimise any tax burden.

If we had a self employed person suddenly reactivating a dormant company to funnel their self employed earnings we would examine this closely - we normally get HMRC to examine income and outgoings for tax evasion. Once they are alerted to unusual behaviour they will keep auditing year after year.

dippy3103

HBO

Could that accruing money be "income available on application"?

Prothet_of_Doom

Are you self employed ? or a disguised employee ? Google IR35, and do the HMRC self survey.


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Housing_Benefit_Officer

dippy3103 wrote: »

HBO

Could that accruing money be "income available on application"?

At work I have a stack of guidance and training notes and I am sure there is something about looking out for money being hidden and paid out as a bonus - we normally look for the P35 and detailed company accounts. We don't accept directors wage slips as we need more detailed evidence. But each officer or benefit office could be working differently depending on training and the officers understanding of Directors pay. My current local authority appears to have lots of company directors paying themselves next to nothing but my previous local authority had lots of self employed and few company directors.

dippy3103

Housing_Benefit_Officer wrote: »

At work I have a stack of guidance and training notes and I am sure there is something about looking out for money being hidden and paid out as a bonus - we normally look for the P35 and detailed company accounts. We don't accept directors wage slips as we need more detailed evidence. But each officer or benefit office could be working differently depending on training and the officers understanding of Directors pay. My current local authority appears to have lots of company directors paying themselves next to nothing but my previous local authority had lots of self employed and few company directors.

My old authority was much tougher on it than my current one... Going back to the o/p, the scenario described certainly would be investigated at my LA