UC for ltd company director

afzaal1988

Hi, i recently started my own ltd company and pay myself wage through paye.

I would like to know before I started my own company I was employee and administrative earnings threshold was applied and my partner wasn't required to look for work as long as my wage was over AET.

Now I am treated as both self employed and employed by universal credit due to me being director of ltd company does AET still apply or it does not matter how much I earn my partner will still be placed in intensive work search regime?

Thanks

kaMelo

People who are gainfully self employed are subject to the MIF (minimum income floor) rather than the AET, however the MIF usually does not apply to those who are within the first twelve months of being self employed.

As you are self employed your partner, based upon her circumstances, will have her own MIF based upon her work related requirements. Add your MIF and her MIF together and you get the couple's earning threshold.

If your sole earnings are greater than the couples threshold then there will be no work requirements for your partner as you're earning enough. If your sole earnings are less than the couples threshold then she would be expected to comply with the conditions of her work related requirement group.

How the couple's earning threshold is calculated in the first twelve months, when you're not subject to the MIF, I'm not quite sure.

huckster

This is all explained in the link below.

Universal Credit and earnings - GOV.UK https://share.google/W5CoUIyh9T4wDu7sh

Grumpy_chap

UC will "look through the veil" of the Ltd Co. and income to the business, not just the salary drawn.

peteuk

i would also add that a few years ago, this was a common occurrence with bank nursing staff. But only paying themselves minimal wage, it was a tax cheat.

I now know of a few people being chased by HMRC for underpaying tax.

afzaal1988

Hi, i fully understand that minimum income floor will apply because I am treated as self employed and also any money in bussiness account will be treated as mine and any profit will be treated as self employed income.

My question was does my wage which comes through RTI (paye) count towards administrative earnings threshold?

Thanks

huckster

Yes employee wages via RTI count towards AET

kaMelo

https://forums.moneysavingexpert.com/discussion/comment/82086242#Comment_82086242

As I mentioned earlier, AET does not apply to you.

As a director of your own company you are, for UC purposes, analogous to a sole trader and have the MIF instead. As you are self employed your partner will also have her own MIF based upon her work conditionality. Add both your and her MIF together and you will get your couples earning threshold.

If your income is at least equal to your couples earning threshold then your partner will have no work requirements, if your income is less than your couples earnings threshold then your partner will be required to do whatever her work related activities group says she needs to do.

To cut to the chase, you seem to be asking whether your partner will be required to work/seek work. If so which one of the four work related activities group is your partner in?