How much information can they ask for?

poppasmurf_bewdley

benniebert wrote: »

Tosh!!


Are you seriously saying that the LA have the rights and power to investigate the financial affairs of a limited company? To investigate if Aunt Fanny is being overpaid for the work she does? A limited company is a legal entity in its own right. What, how, when it earns and spends is for HMRC to consider not some clerk in the LA offices. Besides which, I doubt that many if any at the LA would understand the meaning of a 'Limited Company'.

Too right I am, mush!

benniebert

Londonsu wrote: »

But ANY money a claimant may have access to is everything to do with the LA when it comes to handing out free money.


Even my 84 Dad who worked and paid taxes for 70 years had to go through hoops to claim housing benefit- if he had to then so does everyone else

But he doesn't have access to it if it is retained by the company. It would be a poor do if LA's up and down the country wanted to see the accounts for every limited company and then if there was still money in the company's pot, force the company to pay it to the directors. There would be no capital reserves available to the company if it wanted to purchase something at a later time.


Personally what I would do is arrange for the directors to borrow money from the company via their loan accounts instead of being paid a salary. That would make it capital in the hands of the director and not income.

poppasmurf_bewdley

benniebert wrote: »

But he doesn't have access to it if it is retained by the company. It would be a poor do if LA's up and down the country wanted to see the accounts for every limited company and then if there was still money in the company's pot, force the company to pay it to the directors. There would be no capital reserves available to the company if it wanted to purchase something at a later time.


Personally what I would do is arrange for the directors to borrow money from the company via their loan accounts instead of being paid a salary. That would make it capital in the hands of the director and not income.

The local authority wouldn't force the company to pay the money to the directors. The local authority would, however, take the money into account when awarding benefits. It is not the duty of the taxpayer to help a limited company build up its reserves at the expense of the council taxpayers.

benniebert

missapril75 wrote: »

Nice of you to warn o the contents.



I imagine none whatsoever. What they might consider though is notional earnings whereby someone performs a service such as work for a commercial enterprise and doesn't receive the sort of payment commensurate with the service provided.

Notional earnings??? Wow. So if I worked for a company and was paid NMW, yet a friend of mine was doing the same job and was being paid £15 per hour, I would have notional earnings for benefit purposes of the difference between my income and £15 an hour??


The DWP and LA's would have a field day if they were allowed to compare employees in that way and 'fine' them because the LA believed that the employer wasn't paying the correct level of wages.

benniebert

poppasmurf_bewdley wrote: »

Too right I am, mush!

They don't and never will! However if I am wrong maybe you could point us all to the relevant sections contained within the HB Regs??

benniebert

poppasmurf_bewdley wrote: »

The local authority wouldn't force the company to pay the money to the directors. The local authority would, however, take the money into account when awarding benefits. It is not the duty of the taxpayer to help a limited company build up its reserves at the expense of the council taxpayers.

I'm sorry but are you attempting to wind me up?


So your argument is that if the company has capital reserves at the year end it can keep them? But unfortunately for the directors those capital reserves will be treated as their income albeit unpaid?


Using that argument would completely destroy almost every company in this country. So if the likes of say Virgin retained profits for future expansion, all of the directors and I presume the rest of the employees would all be assessed as being entitled to a share of it and that 'unpaid' share would be used in the calculations for benefits that any employee made.


An employee (of which the directors are) are paid an income/salary/wage. If the company has a good year, there is no legal authority that can treat those retained profits as income in the hands of the employees.


It is the right of every individual in this country to manage and plan their financial/business affairs in such a way that they legally pay the least amount of tax and claim the maximum amount of benefits.

antrobus

benniebert wrote: »

They don't and never will! However if I am wrong maybe you could point us all to the relevant sections contained within the HB Regs??

Reg 42 HBR 2006
http://www.legislation.gov.uk/uksi/2006/213/regulation/42/made

antrobus

benniebert wrote: »

I'm sorry but are you attempting to wind me up?...

No, I think the poster is trying to explain to you that HB regulations state that;

where — (a) a claimant performs a service for another person; and (b) that person makes no payment of earnings or pays less than that paid for a comparable employment in the area, the relevant authority shall treat the claimant as possessing such earnings (if any) as is reasonable for that employment unless the claimant satisfies the authority that the means of that person are insufficient for him to pay or to pay more for the service.

The fact that you don't like it can't be helped I'm afraid.

rogerblack

benniebert wrote: »

Using that argument would completely destroy almost every company in this country. So if the likes of say Virgin retained profits for future expansion, all of the directors and I presume the rest of the employees would all be assessed as being entitled to a share of it and that 'unpaid' share would be used in the calculations for benefits that any employee made.

Of course not.
Firstly, only the directors have the power to do this, so only they would be affected. Secondly, it would need to be considered that they did this to obtain more HB, and not due to not having the means to pay. Thirdly - if virgin would fall over due to having to pay housing benefit - something is very wrong.
For HB - as mentioned:

(b)that person makes no payment of earnings or pays less than that paid for a comparable employment in the area,

the relevant authority shall treat the claimant as possessing such earnings (if any) as is reasonable for that employment unless the claimant satisfies the authority that the means of that person are insufficient for him to pay or to pay more for the service.

In other words - if you're paying less than market rate, without good cause - the authority has the duty to treat you as having received the money.
If you initially setup the company in such a manner that you can't draw more than NMW say - and have no power to alter this - they can _still_ treat it as paid - if you chose to do this to increase your HB.

NYM

A Company Director is an office holder and as such doesn't need to be paid any income for that role.

Dividends are treated as capital.
Debenture holders are entitled to interest at a fixed rate. Any interest payments are regarded as capital. If any of the loan itself is repaid, the amount repaid is a repayment of capital.

Capital is taken into account for HB purposes I assume ?

A Company Director that is also working for that company as for example, Contracts Manager/Sales Manager or whatever else they may want to call themselves, is an employee.
As an employee, they are entitled to receive at least minimum wage for the hours they work. If they don't receive at least that amount, they need to prove that the business can't afford to pay it maybe because it's a new business and is making little if any money.

Directors often leave earnings that they are entitled to in a company bank account. If the director is free to draw on the account at any time, the money is actual income. It can be taken into account as actual earnings for those wishing to claim HB.

Of course though, any money in a business account that isn't earmarked for allowable expenditure, is subject to Corporation Tax.

In essence, if you pay yourself as little as possible and leave 'profit' in the business, you'll pay 20% Corporation Tax.