WTC - Director - Company profit???

WorriedinSussex

My claim for WTC has been stopped on spurious grounds.
I own a Ltd company from which I currently take no remuneration although I do have a reasonable expectation of doing so in due course. I therefore currently have no 'income'.
HMRC have shifted their position several times... They now claim that a Ltd Co. must be in profit for a claim for WTC to succeed. I would particularly like to know where such a 'rule' might be found. I can't find it online in the HMRC compliance manual.
Does anyone have experience of this approach by HMRC and know how best to deal with it?
I can't pay my rent so I am realistically facing homelessness due to HMRC's malicious behaviour (been here before).

marliepanda

How long has your company been in existence?

Are you now coming under the minimum income floor expectation? Work must be undertaken with the view of getting paid for it, if you are not getting paid then you may fail this.

WorriedinSussex

Co. has existed since autumn 2013.
Work is indeed undertaken with a view to getting paid. Co turnover is decent but costs are significant. Also, Co. has had to change direction over the last couple of years in order to survive at all.
Rome wasn't built in a day etc.

marliepanda

WorriedinSussex wrote: »

Co. has existed since autumn 2013.
Work is indeed undertaken with a view to getting paid. Co turnover is decent but costs are significant. Also, Co. has had to change direction over the last couple of years in order to survive at all.
Rome wasn't built in a day etc.

If you still cannot sustain a minimum wage after 4 years then the business is not viable. Sorry.

WTC are there to help you build a business but this is not indefinite. Its not spurious, and Im surprised theyve given you 4 years to become profitable.

WorriedinSussex

Pleasecould you tell me where in the HMRC compliance manual (CCM6755) I might find the ruling that you are relying on here?
Many thanks

marliepanda

WorriedinSussex wrote: »

Pleasecould you tell me where in the HMRC compliance manual (CCM6755) I might find the ruling that you are relying on here?
Many thanks

https://www.gov.uk/government/publications/revenue-and-customs-brief-7-2015-new-rules-for-the-self-employed-claiming-working-tax-credit/revenue-and-customs-brief-7-2015-new-rules-for-the-self-employed-claiming-working-tax-credit

Darksparkle

marliepanda wrote: »

https://www.gov.uk/government/publications/revenue-and-customs-brief-7-2015-new-rules-for-the-self-employed-claiming-working-tax-credit/revenue-and-customs-brief-7-2015-new-rules-for-the-self-employed-claiming-working-tax-credit

Company directors are not self employed. These rules don’t apply.

marliepanda

Darksparkle wrote: »

Company directors are not self employed. These rules don’t apply.

So are you able to answer the OP's questions as to why his WTC is stopped after 4 years of an inability to pay himself a wage?

I appreciate he is not self employed, but he is employed by a company that he owns and is the only employee. For quite a few things this does come under self employment (My partner is similar, I am aware of the differences)

A company could not pay its employees under minimum wage, which is what the OP is doing to himself.

So, what can he do?

pmlindyloo

I think this might be a useful link

https://www.gov.uk/hmrc-internal-manuals/tax-credits-manual/tcm0118180

but, hopefully, DarkSparkle can give more detailed advice - too complicated for me!

gettingtheresometime

We had the same trouble when OH set up his ltd company - DWP's view was that he had obviously set up a company to earn a living as he wouldn't be doing it for free.


It took us getting our MP involved.


However I think the main difference is that OH's company had just been set up and we were surviving on my part-time wage - I think the OP would have a hard job in saying that no money had been taken from the company (in whatever form) for 4 years

Darksparkle

:beer:

marliepanda wrote: »

So are you able to answer the OP's questions as to why his WTC is stopped after 4 years of an inability to pay himself a wage?

I appreciate he is not self employed, but he is employed by a company that he owns and is the only employee. For quite a few things this does come under self employment (My partner is similar, I am aware of the differences)

A company could not pay its employees under minimum wage, which is what the OP is doing to himself.

So, what can he do?

No I didn’t reply because I’m not aware of any new rule regarding directors.

It might come under self employed for something else but it doesn’t for tax credits. Whether we agree with that is another matter but it’s always been the case that directors are considered “employees” for tax credits but there is no clear guidance on how they should be dealt with as NMW doesn’t apply. There are rules round out if directors are deliberately depriving themselves of income.

The OP should ask them what legislation or guidance they have used to make this decision. If he doesn’t agree then he should do a mandatory reconsideration, appeal etc..