Universal Credit for Ltd Company Director - advice please

jacksonsmum

Hi
My husband is a handyman and a limited company director. He pays himself a small salary, the rest is dividends which I understand is not covered under either the employee or self-employed scheme.
As such we are trying to apply for universal credit as he will have no work after this week.
I am employed and the UC system is asking me to make a joint claim - I understand that they need to be aware of all money coming into the house but will me applying affect my tax and employment status? I assumed that my husband would make a claim, declare my income rather than me having to make a claim when personally, I'm employed and covered by my salary?
Any advice would be gratefully received.
Thanks

Potbellypig

Yes, your husband would claim UC with you being the joint claimant, and no it doesn't effect your tax or employment status. Depending on what you earn and your circumstances will depend on how much you are entitled to. 

jacksonsmum

Thank you! All I needed to know. Many thanks

josephorion

I am a forced limited company by my employer. I tried to claim UC and was told I am entitled to nothing. They take off any UC I would have from the 719 my accountants put through a month. So it was totally pointless. Without a bounce back loan I'd lose my job. 

calcotti

josephorion said:

I am a forced limited company by my employer. I tried to claim UC and was told I am entitled to nothing. They take off any UC I would have from the 719 my accountants put through a month. So it was totally pointless. Without a bounce back loan I'd lose my job. 

Are you saying that your accountants are declaring that your company pays you £719/month but you aren’t actually doing this? If that is the case you need to stop putting fictitious payments through the payroll. If you are being paid £719 then that could well result in no UC being payable depending on your circumstances.
For UC you will also need to report all business income and expenditure on a monthly basis. The salary the company pays you is a business expense.

dunstonh

Are you saying that your accountants are declaring that your company pays you £719/month but you aren’t actually doing this?

£719 pm was the figure for 2019/20 to take a salary to the primary threshold.  This qualifies you as if you have paid NI without actually paying any NI.   Anything above that taken as dividends avoids National insurance and reduces tax.

You ought to be showing that £719pm (as it was for last year - it will be different for this year) as a transaction.   Most would do a monthly standing order that they adjust inMarch to reflect the new figure for April.

Doing it this way does reduce the tax and NI you pay.  However, it does also reduce the amount of benefits you could get.  Which is not unreasonable when you think about it.

calcotti

dunstonh said:

Are you saying that your accountants are declaring that your company pays you £719/month but you aren’t actually doing this?

£719 pm was the figure for 2019/20 to take a salary to the primary threshold.  This qualifies you as if you have paid NI without actually paying any NI.   Anything above that taken as dividends avoids National insurance and reduces tax.

You ought to be showing that £719pm (as it was for last year - it will be different for this year) as a transaction.   Most would do a monthly standing order that they adjust inMarch to reflect the new figure for April.

Doing it this way does reduce the tax and NI you pay.  However, it does also reduce the amount of benefits you could get.  Which is not unreasonable when you think about it.

Yes, I understand why OP might be doing this but it isn't clear from post whether he is actually withdrawing the money from his business (in which case he can live of it) or whether this is a notional paper transaction in order to get the NI credits but without him actually having the money. If the latter he is shooting himself in the foot in respect of UC.

dunstonh

Sorry calcotti, it would have been better if I had quoted the OP rather than yours as you are quite correct.

calcotti

dunstonh said:

Sorry calcotti, it would have been better if I had quoted the OP rather than yours are you are quite correct.

No apology needed. The way the quotes appear in the new look forum can be confusing!

silvercar

josephorion said:

I am a forced limited company by my employer. I tried to claim UC and was told I am entitled to nothing. They take off any UC I would have from the 719 my accountants put through a month. So it was totally pointless. Without a bounce back loan I'd lose my job. 

Your  true employer is actually your limited company. Your limited company contracts to supply to whoever you are mistakenly calling your "employer". A forced limited company I am taking to mean that you can only take on the work by contracting as a limited company for a business to business contract. This leaves you as an employee and/or director of your own company. It reduces your tax bill generally (though not as much as people imagine as you are also liable for corporation tax), but leaves you exposed to cover your own holiday and sickness pay with no employment rights that a "normal" employee would automatically receive. 
You should be taking the £719 as income each month (rises to £732 from April 2020) and anything else you want and can afford to take out from your company as a dividend payment.
Sadly that leaves you without much help in the current climate.