Universal credit and dividends

AMR123

Just spoke to my ex and he thinks that it would be OK for me to receive it now and give it to him as the dividends now are for the last financial year to April 2022. It's so complicated. I'll follow up with UC as well.
Thanks for any advice 

poppy12345

AMR123 said:

Just spoke to my ex and he thinks that it would be OK for me to receive it now and give it to him as the dividends now are for the last financial year to April 2022. It's so complicated. I'll follow up with UC as well.
Thanks for any advice 

Your Ex is not correct. For UC it's treated as capital in the assessment period in which you receive it. As advised, if you receive it then it's classed as yours. If it takes your savings over £6,000 then you can't just give it away.

whizzywoo

Opening Poster have you spoken to the
Accountant who advised you to do this and told them you are claiming UC?

Many Accountants have very little knowledge of how the Welfare Benefits system works and it has probably not even crossed his/her mind that you are claiming benefits. 

I worked for Chartered Accountants for over 40 years before I retired.  In all that time never have I come across a client who has been advised to do what you and your ex are doing.

In my opinion it is money laundering and income tax evasion.  Not only could you and your ex be in trouble with HMRC and DWP, the Accountant in question could be breaking the rules of his/her regulatory body.

I suggest you make an appointment to speak to an independent Chartered Accountant and explain the situation to them and ask for their advice. 

AMR123

Thank you for the information- much appreciated! I had no idea. I will follow this up with some legal advice.
Thank you everyone who has commented 

whizzywoo

AMR123 said:

Thank you for the information- much appreciated! I had no idea. I will follow this up with some legal advice.
Thank you everyone who has commented 

Make sure you get advice from  Chartered accountant to begin with.   A solicitor isn't necessarily going to have the taxation knowledge. 

AMR123

Sorry everyone. Having spoken to my ex, it looks like I've gotten a little mixed up. 

There will be no money going into my account for this financial year (2022-2023) at all as it complicates my UC. We are likely to move me off as director. 

For the tax year 2021-2022, they (family business) have the tax money ready to pay it. If they use my tax code, less tax will be owed for last year. As I'm director they can use my tax free allocation for last financial year. All of the dividends for last financial year have already been given out in April 2022. They just need to pay the tax bill now. If they can use my tax free allocation, they'll pay less.
He has given me the option to not provide my P60 to him if I don't want to/understand this. 

This does make more sense to me now as I won't receive any money for last year. No one will as it's already been given out in dividendsin April 2022. They just need to pay the tax bill now and as I'm director, they can use my tax allowance. 

Does this seem an OK thing to do? Don't think using my tax code for last financial year up to April 2022 will impact my UC now? I have only just started recieveing UC and definitely didn't have UC in April so the two would be very separate events. They've just left paying off the tax until late rather than paying it off earlier in the year. I hope this makes sense! 

Thanks everyone. 

tomtom256

AMR123 said:

Sorry everyone. Having spoken to my ex, it looks like I've gotten a little mixed up. 

There will be no money going into my account for this financial year (2022-2023) at all as it complicates my UC. We are likely to move me off as director. 

For the tax year 2021-2022, they (family business) have the tax money ready to pay it. If they use my tax code, less tax will be owed for last year. As I'm director they can use my tax free allocation for last financial year. All of the dividends for last financial year have already been given out in April 2022. They just need to pay the tax bill now. If they can use my tax free allocation, they'll pay less.
He has given me the option to not provide my P60 to him if I don't want to/understand this. 

This does make more sense to me now as I won't receive any money for last year. No one will as it's already been given out in dividendsin April 2022. They just need to pay the tax bill now and as I'm director, they can use my tax allowance. 

Does this seem an OK thing to do? Don't think using my tax code for last financial year up to April 2022 will impact my UC now? I have only just started recieveing UC and definitely didn't have UC in April so the two would be very separate events. They've just left paying off the tax until late rather than paying it off earlier in the year. I hope this makes sense! 

Thanks everyone. 

But are you still registered as a company director, it sounds like you are, so that is something you need to declare to UC. When you remove yourself as a company director, it could be seen that you did this after April and didn't tell them about being a director, to maximise your benefit award and they may question why you gave up the business without any renumeration for it.

How many shares/percentage of control does companies house have you declared as holding? It's that, that could affect your benefit.

DullGreyGuy

You need to look at Companies House to see what exactly the situation is with you being a statutory director and/or a shareholder. 

If you are a director then you have legal obligations in relation to the company and may find yourself on the hook for things

If you are a shareholder, and they haven't tried to be clever with classes of shares, then you get a % of the dividends issue proportional to your shareholding.

Whose account money goes into doesn't change whose it is and who has to declare it when it comes to benefits or taxes etc. It may however result in awkward questions if others are flowing their money via your account.

AMR123

Thank you for your comments. This so much more complicated than I ever realised. I'm really grateful for all of the information and I will look into this further. 

ader42

This may help:

https://countingup.com/resources/can-you-pay-different-dividends-to-shareholders/