universal credit for a 1 person ltd company owner director, employing partner

tboo

seatbeltnoob wrote: »

If you are not sure how UC is treated it's best not to reply so authorativiely challenging a view.

Sorry I only asked a question - I'll back off now

Icequeen99

seatbeltnoob wrote: »

Yes I skimmed through that. will this help or hinder someone in my position? I don't know. If they can sculpt my high months into my low months then the negative impact of the MIF will be reduced I would have thought.





What is a loss? When you actually make a loss in business, or when you've earned below the MIF. In that case it could help people smooth out the income for universal credit purposes?

It depends on the actual figures, but the surplus earnings rules can make the MIF impact worse. Losses carried forward don't stop the MIF applying.

The premise is that in months you have high earnings from S/E, any surplus is carried forward and treated as income in subsequent months. The MIF still applies.

IQ

helenmarino

I am the director of a limted company. I pay myself £476 per month salary. I have just moved out of the family home and am paying rental of £850 per month.


I do take dividends which this year came to circa £35K however I only have £2K now left in my business account.


Will the job centre treat me as self employed? How will they assess my claim? Will it be month to month going forward?


Also I claim carers allowance for my disabled son. Will they now take this away from me as I am not at the family home?


Many thanks

Dazed_and_confused

I am the director of a limted company. I pay myself £476 per month salary.

Is that sufficient to earn a years National Insurance for State Pension purposes or is that not an issue for you?

calcotti

Dazed_and_confused wrote: »

Is that sufficient to earn a years National Insurance for State Pension purposes or is that not an issue for you?

That amount is below the slower Earnings Limit so OP is not getting any credits towards her State Pension. OP needs to be earning £512/month to get NI credits. If her accountant has advised her to only pay herself this much she appears to have been badly advised.

There is also an argument that as an employee of the company she should be paying herself at least the minimum wage.

calcotti

helenmarino wrote: »

I am the director of a limted company. I pay myself £476 per month salary. I have just moved out of the family home and am paying rental of £850 per month.

I do take dividends which this year came to circa £35K however I only have £2K now left in my business account.

Will the job centre treat me as self employed? How will they assess my claim? Will it be month to month going forward?

Also I claim carers allowance for my disabled son. Will they now take this away from me as I am not at the family home?

Many thanks

For UC purposes you are tested as self employed and you income each month for UC purposes is the difference between your business income and business expenditure. It makes no difference what money you actually take or how you take it. You will have to report this information on a monthly basis.
https://www.gov.uk/self-employment-and-universal-credit

You will be subject to the Minimum income Floor
https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

Regardless of the rent you pay the amount of help you can get is limited by the Local Housing Allowance https://lha-direct.voa.gov.uk/

You don’t have to be living with your son to receive Carer’s Allowance, you do have to be providing a minimum of 35 hours/week of care. [STRIKE]However your earnings (which includes dividend income) appear to exceed the £123/week maximum permitted to qualify for CA so I am not clear how you are getting it.[/STRIKE]

EDIT: Corrected (see later exchanges).

helenmarino

I.m not sure. I pay my salary via my accountant.

helenmarino

Thanks very much for your advice.


My understanding on carers allowance is that dividends are not taken in to account?

calcotti

helenmarino wrote: »

My understanding on carers allowance is that dividends are not taken in to account?

I wasn't sure about that before I posted so I looked it up.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/843575/dmgch15.pdf

Directors of limited companies
15056 A limited company, of whatever size, is separate from its employees and shareholders1. This means that the profits of the company do not belong to the directors. A director of a limited company is an office holder in the company, and is an employed earner.
1 R(SB) 57/83

Establishing a director’s income
15057 The income of a director can include
1. payments for services as a director or any other employment with the company
2. share dividend
3. debenture interest.

Payments as a director or other employee
15070 Directors have no legal right to receive payment for their services as a director, but can still be voted payment. Or they may be entitled to payments under the company’s Articles of Association. Any payments voted to a director or to which they are so entitled should be taken into account as earnings.

15071 A director may also be employed by the company for another reason, for example as a sales manager. Such a person has a contract of employment with the company and is entitled to a salary. Any salary should be taken into account as earnings.

15072 If a director in a small company does no other work in it, the services provided will be limited and the amount of payment expected will be small. If the director also does other work in the company, then more payment will be expected.

15073 Many small companies operate with only two directors, for example the claimant and partner. Such companies normally obtain contracts and pay employees a salary for work done. Any earnings paid to the claimant will usually be for work done as an employee of the company.

15074 Directors may 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 should be taken into account as actual earnings.

From paragraph 15057 it appears to me that dividends are taken into account.

NedS

If you claim UC and are caring for your disabled son (regardless of whether or not you are in receipt of Carers Allowance), you will receive the carer element of UC. As a carer, you then can not be subjected to the Minimum Income Floor (MIF), so only your self employed income (business income - business expenses) will be taken into account each month.

If you are in receipt of Carers Allowance, this will be deducted from any UC entitlement - you will not get it twice