Self Employed LTD Company worker entitled to anything?

Entitled_to_Anything

I filled out the form on the entitled to website and it said we were entitled to some benefits, but I'm not sure this is correct.

Can anyone please provide any info?

Me and my spouse both work as freelancers through our LTD company.

We get a salary and dividends from the LTD company.

Last year, that came to £18,XXX each (haven't got the exact figure to hand).

Salary was £8,xxx and the rest dividends.

This tax year should be similar

Some more info about us:

• We have two kids in school.
• We rent privately (£1350 a month).
• Council tax is £ 1,671 per year.
• We get child benefit of about £137 per 4 weeks.
• We have no savings.
• We each work 30 hours a week (although can vary).

If I put those figures into the Entitled To website, it said that we could get Universal Credit:

£97.30 / weekly
We estimate your monthly Universal Credit will be £421.70.

Can that be right?

If so, can you claim Universal Credit when working through a limited company like we do?

If we could claim, would they need to see our bank accounts or just our tax returns?

Can we back claim for last year/months past?

Any info much appreciated!

Thanks.

Rubyroobs

Universal credit cannot be backdated except in very exceptional circumstances like serious illness where it has been difficult to claim.

calcotti

Entitled_to_Anything wrote: »

If so, can you claim Universal Credit when working through a limited company like we do?.

Yes you can.

Entitled_to_Anything wrote: »

If we could claim, would they need to see our bank accounts or just our tax returns?.

You will be treated as self employed. Every month you will have to provide details of all the business income and expenditure for that month. Your 'earnings' for UC purposes will be the difference. How you actually pay yourself will be irrelevant.
https://www.gov.uk/self-employment-and-universal-credit

Entitled_to_Anything wrote: »

Can we back claim for last year/months past?.

Maximum backdating for UC is one month and only in exceptional circumstances which will not apply to you.


Remember when do the benefits calculation that the amount of help you can get with rent may be less than your actual rent. It will be capped by the applicable Local Housing Allowance for your post code https://lha-direct.voa.gov.uk/. The number of bedrooms you are entitled to will depend on the ages and sex of your children.

Entitled_to_Anything

Thanks, that's great.

So do those numbers sound right, £36,000 between two people with two kids, getting £97 a week?

One problem is is that the LTD company has a turnover of about £50,xxx but after expenses, we get £18,xxx each.

£50,xxx is probably couldn't to mean we don't get UC?

Is there a way to see a sliding scale of how much someone (us) can earn and still get benefits/UC?

When you say:

Every month you will have to provide details of all the business income and expenditure for that month. Your 'earnings' for UC purposes will be the difference.

How are these details provided and in what format etc?

Also, our income fluctuates from month to month.

So would we provide our income details at the end of each month (or a set date), then they calculate what we would get in benefits the following month?

If one month, it's over the limit, we get nothing, if one month it's under, we get something?

What if we have a few low earning months, then a big earning month, would we have to pay money back?

£97 a week would be a massive help. But there's a lot of negative press about UC and I would be wary of getting caught up in a Kafkaesque system and making a mistake then getting fined etc!

Reading the Gov website you linked to, it says I need to report self-employed earnings at the end of each monthly assessment period including "how much tax and National Insurance you paid". As I pay tax at the end of the year, and won't know how much tax I have to pay until the end of the year, how would this work?

Sorry for the questions! Just putting my thoughts into words in case anyone is familiar with this situation.

calcotti

There are too many variables to advise you on whether the figures are right. Entitlement will be calculated on a monthly basis so the annual totals are not relevant.


The gross amounts are irrelevant/ Your earnings are the difference between income and expenditure.


At the end of each monthly assessment period you provide the information required on a 'cash in, cash out' basis and a week later you get a payment based on those figures. So some months you may qualify, others you may not.


However if you have been self employed for more than 12 months and earn below the Minimum Income Floor you will still be treated as earning the MIF amount as referred to in the link I provided earlier/. More information here https://www.citizensadvice.org.uk/benefits/universal-credit/on-universal-credit/how-the-minimum-income-floor-works-if-youre-self-employed/


If you have been correctly paid UC you do not have to pay it back in the future because of having a good month. If you have a very good month there may be excess earnings which are carried forward for UC purposes into a later month. These rules are complicated. See https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/universal-credit-and-work/


You report tax when you pay it. It cam be beneficial to set up a monthly payment plan to spread this cost.

Entitled_to_Anything

Thanks again!

Would we both report our income individually each month?

Or is it a joint thing, with the total income for both us reported each month?

As we are a couple, would it matter if the £18,000 each was split differently, such as £20,000 / £16,000?

Thanks for the link. It looks like the minimum income floor would apply to us. But I can't see what the floor amount is. I assume we earn over that amount though.

As for the tax, say in the month the tax was due, I paid £1,000 tax for the year, that would be offset against the income for that month? So I would report what I earned, minus the tax payment?

Are there any downsides to applying and starting UC? Even if there's a chance we might not qualify?

As we haven't been getting it any way, the stress of not getting it won't be a problem, which seems to be the main compliant self employed people have with UC from what I've read here.

Also, is there somewhere we can go and talk to someone about this and get advice?

Thanks

calcotti

You can get advice from Citizens Advice who may be able to do a benefits check for you.

How you report your earnings will be by agreement with DWP at the time. In your situation it would seem logical to do one report for the both of you given that any subdivision between the two of you is effectively artificial. However it makes no difference to the outcome how you are asked to report it.

If you pay a large tax bill in one month you report it that month. The risk with this is that it takes you below the MIF which is then applied and you effectively lose benefit entitlement. Hence my comment that spreading tax payments can be beneficial.

The downside with applying is simply having to go through the process and, if accepted, doing the monthly reporting.

Entitled_to_Anything

Thanks. Two more questions:

1) As we rent privately and many landlords and agents don't want people on benefits, would we have to declare this when renting? We wouldn't use any money from UC as part of our income calculation, eg 30x the monthly rent affordability test.

2) At the moment the money from clients goes into our LTD Company business bank account. Then we leave the expenses and a percentage for corporation tax in that account, then send the left over to our personal bank account. When doing the UC reporting, would we report the money coming into our personal accounts? Or the LTD company business account?

I didn't know it was possible to pre-pay tax in installments. Will look into that.

Thanks again.

calcotti

For UC you report all business related money received and all business related expenditure on a cash basis.

Entitled_to_Anything wrote: »

I didn't know it was possible to pre-pay tax in installments. Will look into that.

https://www.gov.uk/pay-self-assessment-tax-bill/budget-payment-plan

In my opinion it is no business of a landlord where your money comers from. Others on this forum take a different view.

poppy12345

calcotti wrote: »

In my opinion it is no business of a landlord where your money comers from. Others on this forum take a different view.

I'm one of them, sorry. Having claimed benefits including housing benefit myself for quite some time, i wouldn't be able to sleep at night knowing i was keeping something from a landlord. Even more so because some mortgage companies won't allow landlords to rent to anyone claiming benefits.



OP as you're privately renting you'll need your tenancy agreement to be able to claim any housing element.

calcotti

poppy12345 wrote: »

I'm one of them, sorry.

No need to apologise. Different points of view - and I confess that my opinion is from someone who is not renting so may be less valid than yours.