How much information can they ask for?

NYM

benniebert wrote: »

<snip>.... I am wrong maybe ....<snip>

Yes, you are.

poppasmurf_bewdley

benniebert wrote: »

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.

I don't need to try and wind you up. You are doing that all by ourself. For instance, it's obvious from your post above that you do not even know the difference between a Limited Company and a Public Limited Company. As if a director of Virgin would be applying for housing benefit!!!

You are showing that you know little or nothing about the subject you are espousing to be an expert on. Others on here have already shown you do not know what you are talking about.

MUMZ2BEE

Braman wrote: »

Since the award of my Housing Benefit late last year, the council has asked to see every one of my (and fiancee's) bank statements.
Now there's also a few other things including audited company accounts, and our last personal tax returns (in which they want us to itemise every expense and provide original copies of 'the proof')

This all seems a bit over the top to me. Is it normal for then to constantly request this sort of information?

How come you are getting Housing Benefit if you are living with someone, I can't claim it!?

thorsoak

benniebert wrote: »

Seems that you know. Question Why??


Would it make any difference if he was spending £100 a day on Cocaine? or maybe he likes to lease very expensive cars or has regular expensive holidays or meals out.


What he spends on his lifestyle has no bearing whatsoever on any HB claim. HB claims are based on earnings BEFORE he spends it.

My initial, gut- reaction to your post? Well as I am contributing towards your benefit, maybe I would like to know what you are spending my money on!

I know that is a totally and utterly unreasonable reaction, but your reaction to being asked to verify your income is a tad unreasonable too!

missapril75

benniebert wrote: »

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. .

But they don't want to see the accounts for every limited company. Just those where someone is claiming a benefit and it appears they have arranged matters so as to deprive themselves of "the going rate" of income reasonably expected. You still seem to think the LA can get the company "to do" something. That's not what it's about, it's about considering an income of £xx would be reasonable for the service provided and maybe assuming that income for benefit purposes.

Whether "the company" responds is up to them.

benniebert wrote: »

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??

Well done, that's exactly what might happen if the rate of pay to the friend was the going rate.
The alternative is for the benefits system to subsidise the employer paying less than the going rate.

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.

How come you understand the point and then suddenly you don't understand the point?

It's only going to happen if there is reason to think it should.

A qualified plumber with the occasional job paying £100 looks legit.

A qualified plumber working Monday to Friday, 40 hours a week, for his brother and getting paid only a £100 a week would be looked at.

No comparison with a bunch of other employees or even NMW would be necessary to decide that a higher wage would be appropriate and it would be a clear case for consideration of notional earnings.

benniebert

NYM wrote: »

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

Dividends are treated as capital.
Correct

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 ?
Correct. Any capital over £6000 for those under 63 and £10,000 for those over 63 is taken into account for HB.

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.
Correct. But in the main they would only need to take the NMW to avoid any problems with the LA.


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.
Correct. And to be honest any director that does this AND is wanting to maximise his/her entitlement to benefits is really being a little naïve. Generally most directors loan accounts (where this money is held) is in debit due to the capital that they have invested in the first place. It is only when that account goes into credit that things get difficult.



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.
Correct. This is the much better option if you want to maximise your benefit entitlement. In small companies, the directors are the shareholders (they own the business). In which case leaving the 'unpaid salary/bonus' as profit the company will pay tax. It is well worth doing this considering that the director will be liable to Income Tax at the same rate.
If the claimants capital is below the limit, as in above, the company can pay a dividend to get the capital up to that limit. The director then uses that capital during the forthcoming year on necessary and appropriate expenditure.

I personally can't see what the fuss is all about on this subject. If you are able to legally manipulate your income/capital in this way, why not do it? At least you are working and not claiming out of work benefits - you are trying to improve your future. Every little bit of help is needed. For those that decide to make a life out of living off the state for example, retiring at 63 and claiming Pension Credit instead of being productive is a far worse crime to my way of thinking.
And before anybody shoots me down or attempts to, I worked as a self employed consultant from 60 (when I retired) to 65 whilst claiming ESA with a Pension Credit top up.

NYM

benniebert wrote: »

I personally can't see what the fuss is all about on this subject. If you are able to legally manipulate your income/capital in this way, why not do it? At least you are working and not claiming out of work benefits - you are trying to improve your future. Every little bit of help is needed. For those that decide to make a life out of living off the state for example, retiring at 63 and claiming Pension Credit instead of being productive is a far worse crime to my way of thinking.
And before anybody shoots me down or attempts to, I worked as a self employed consultant from 60 (when I retired) to 65 whilst claiming ESA with a Pension Credit top up.

A self employed 'consultant' in what though...?

Correct. This is the much better option if you want to maximise your benefit entitlement. In small companies, the directors are the shareholders (they own the business). In which case leaving the 'unpaid salary/bonus' as profit the company will pay tax. It is well worth doing this considering that the director will be liable to Income Tax at the same rate.
If the claimants capital is below the limit, as in above, the company can pay a dividend to get the capital up to that limit. The director then uses that capital during the forthcoming year on necessary and appropriate expenditure.

I sincerely hope that you didn't advise anyone that taking a dividend attracts income tax at 20% :eek:

Someone paying themselves a Dividend that falls within the basic rate tax band on top of their personal allowance pays no further tax at all on dividends, as the 10% basic dividend tax rate is cancelled out by the 10% tax credit.

benniebert

NYM wrote: »

A self employed 'consultant' in what though...?




I sincerely hope that you didn't advise anyone that taking a dividend attracts income tax at 20% :eek:

Someone paying themselves a Dividend that falls within the basic rate tax band on top of their personal allowance pays no further tax at all on dividends, as the 10% basic dividend tax rate is cancelled out by the 10% tax credit.

I said "In which case leaving the 'unpaid salary/bonus' as profit the company will pay tax. It is well worth doing this considering that the director will be liable to Income Tax at the same rate." - I make/made no reference to dividend income as we were discussing salary/bonuses.

And the reason you want to know is??

Your attempt to derail is obvious.

missapril75

benniebert wrote: »

I personally can't see what the fuss is all about on this subject. If you are able to legally manipulate your income/capital in this way, why not do it?

Why not indeed. But expect others to think "it's not quite right" and expect enquiries from any agency one wants something from on the basis you have manipulated your income.

At least you are working and not claiming out of work benefits

I dunno about that. Working but manipulating one's income to claim an in work benefit...is that somehow more 'honest' than not having a job to manipulate? :think:

NYM

benniebert wrote: »

I said "In which case leaving the 'unpaid salary/bonus' as profit the company will pay tax. It is well worth doing this considering that the director will be liable to Income Tax at the same rate." - I make/made no reference to dividend income as we were discussing salary/bonuses.

And the reason you want to know is??

Your attempt to derail is obvious.

:doh: you are so exasperating...

NO income tax is due unless salary drawn is above the personal allowance. Your statement that a Director will be liable to income tax at the same rate is incorrect.

Thank you for 'marking my work' though.