New enterprise allowance and universal credit

almanak

NedS said:

almanak said:

Hi,
 It is a bit confusing is NEA for self-employed or for ltd businesses etc?
https://www.gov.uk/moving-from-benefits-to-work/starting-your-own-business

Under UC, directors of a limited company are treated as self employed, so it makes no difference. The important point is that in order to receive New Enterprise Allowance (NEA), it must be a New Enterprise so can not be an existing business. So when you mention a limited business, I'm thinking of a business that already exists, or are you thinking of starting a new limited business?

sorry thanks but did you go through the process yourself? I know it is the same but they still do ask if you are registered as self employed and that does make a difference. For me a business is a limited company.

calcotti

almanak said: For me a business is a limited company.

Sole trader, partnership and limited company are all different ways of conducting a business.

nickstone

How do you get it?

calcotti

nickstone said:

How do you get it?

https://www.gov.uk/moving-from-benefits-to-work/starting-your-own-business

NedS

almanak said:

NedS said:

almanak said:

Hi,
 It is a bit confusing is NEA for self-employed or for ltd businesses etc?
https://www.gov.uk/moving-from-benefits-to-work/starting-your-own-business

Under UC, directors of a limited company are treated as self employed, so it makes no difference. The important point is that in order to receive New Enterprise Allowance (NEA), it must be a New Enterprise so can not be an existing business. So when you mention a limited business, I'm thinking of a business that already exists, or are you thinking of starting a new limited business?

sorry thanks but did you go through the process yourself? I know it is the same but they still do ask if you are registered as self employed and that does make a difference. For me a business is a limited company.

For the purposes of New Enterprise Allowance it is not relevant how you set your business up in the future, because that has not happened yet. If you have already set up a limited company, then by definition it is not a new enterprise, so you would not be eligible for new enterprise allowance.

But I get your point. Again, for UC purposes it doesn't really matter if it is structured as a limited company and you pay corporation tax, or if you structure as a sole trader, register with HMRC as self employed and pay income tax under self assessment. Either way, UC will treat you as being self employed so you should declare yourself as self employed whenever you are registered as a director of a company. Don't dwell on it - for UC purposes you are self employed.

almanak

NedS said:

almanak said:

NedS said:

For the purposes of New Enterprise Allowance it is not relevant how you set your business up in the future, because that has not happened yet. If you have already set up a limited company, then by definition it is not a new enterprise, so you would not be eligible for new enterprise allowance.

But I get your point. Again, for UC purposes it doesn't really matter if it is structured as a limited company and you pay corporation tax, or if you structure as a sole trader, register with HMRC as self employed and pay income tax under self assessment. Either way, UC will treat you as being self employed so you should declare yourself as self employed whenever you are registered as a director of a company. Don't dwell on it - for UC purposes you are self employed.

I have found information and in terms of the LTD company it can be set up but the trading is something that would exclude you.
So I do have my company set up for couple of years but it has never started trading and it was dormant from the begining as I was working on PAYG. As a result there was never Corporation Tax due.

srpsrp

So presumably after a year they would be classed under the minimum income floor on universal credit anyway. I don't know what the rules are currently, but basically they wouldn't get anything because they would be assumed to be working 35 hours a week.

Spoonie_Turtle

srpsrp said:

So presumably after a year they would be classed under the minimum income floor on universal credit anyway. I don't know what the rules are currently, but basically they wouldn't get anything because they would be assumed to be working 35 hours a week.

Depends entirely on their circumstances. Single, even a couple, not disabled, not renting, probably not. A couple, with children, renting, may well still be entitled to some. 

almanak

srpsrp said:

So presumably after a year they would be classed under the minimum income floor on universal credit anyway. I don't know what the rules are currently, but basically they wouldn't get anything because they would be assumed to be working 35 hours a week.

they cant be classed under the minimum income floor if the COMPANY WAS NEVER TRADING and if they have REGULAR INCOME on PAYE. Dormant company doesn't exist for universal credit. And the minimum income floor doesnt apply during COVID19

almanak

Spoonie_Turtle said:

srpsrp said:

So presumably after a year they would be classed under the minimum income floor on universal credit anyway. I don't know what the rules are currently, but basically they wouldn't get anything because they would be assumed to be working 35 hours a week.

Depends entirely on their circumstances. Single, even a couple, not disabled, not renting, probably not. A couple, with children, renting, may well still be entitled to some. 

Dont take it personally but please use your brain before writing here so people do not waste their time