Income falling by £70k - how do I claim tax credits?

tinkerbell84

meester wrote: »

Need? As far as I can see the idea is to get what you are entitled to.

http://www.moneysavingexpert.com/protect/benefits-check

Is your family income under £66,000? If so, you may be entitled to benefits and tax-credits.

but you are NOT entitled.

you already deliberately pay yourselves too little (officially) to pay tax in. then you manipulate the system to be able to take money out.

meanwhile, DINKIES like me are paying through the nose to educate your children and to treat you for free through the NHS.

i hope you do it. i hope you get caught. and instead of retiring to bali, you'll be retiring to prison.

tinkerbell84

mitchaa wrote: »

Apologies, not following that. Where is £18700 coming from? If you're getting £18700 per year allowance, why dont you pay yourself £18700?

it's his 11.2k salary plus 7.5k of handouts he'd get by fiddling the system.

Nomad25

Surely dividends are based on profit - and profit has to be declared each year and is subject to tax? Or am I being dumb? I am reading this and your other thread Meester and I think I can see what you are trying to do - I am intrigued to see what will be the outcome.

jumpingjackd

So our income will fall to £11,200 on which level I believe we are entitled to around £7,800/year in tax credits.



If only we were all so lucky!! We get nowhere near the £7,800 in tax credits.

meester

tinkerbell84 wrote: »

but you are NOT entitled.

you already deliberately pay yourselves too little (officially) to pay tax in. then you manipulate the system to be able to take money out.

meanwhile, DINKIES like me are paying through the nose to educate your children and to treat you for free through the NHS.

i hope you do it. i hope you get caught. and instead of retiring to bali, you'll be retiring to prison.

I think you'll find that you are not paying to educate my children, because one is a baby and the other is private school. State schools don't provide adequate education any more, so I'm paying for a proper education to ensure that my kids are productive and successful themselves in the future. I paid in direct taxation about £25k this year, and when I needed the NHS recently I had to pay for that as well because they wanted me to wait for months.

Legal tax avoidance is perfectly legitimate and widespread.

I am not sure why you are talking about being caught, since I am doing nothing illegal.

I am entitled to pay myself what I like, it is 100% definitely legal. The only question is whether I would be deemed as "avoiding income", by not paying any dividends, and have it (but what? - my dividend payments vary each year) classed as part of my income. That is a question of fact, and I was hoping for some sensible input on it.

People do not get sent to prison for claiming benefits to which they are legally entitled. At the moment I am trying to clarify the extent of that. For instance, I should definitely get the basic £1,090 for having a baby, because the MOST my family will earn is 1 * £40k + £5.2k for my wife, because as of next year under the new rules, she is NOT ALLOWED to get a dividend any more from my company.. So we lose £40k from this year, due to the government's own law changes. So we drop back to £40k income.

At anything up to £55k joint income you can claim the full Child Tax Credit Family Allowance, which is £1090 with a baby.

So I can definitely claim £1090. That much is 100% clear to me. As for the rest of it I am struggling to see where my income will be between about £11k join, and £45k joint. As far as I can see, there's no reason why I SHOULD pay out any dividend for me (~£33k gross), if I don't want to. I don't need it. And frankly the way that business works today is that people accumulate cash within their business and wind it up after a few years and pay capital gains tax on it (10% on business assets). Why should I behave differently?

All I see from this thread is a lot of people understandably upset that someone as affluent as myself should be entitled to beenfits, I agree with them, it is wrong, but I didn't make the rules, I just want to understand the rules and maximise my own personal financial benefit. That's it. My grandparents who gave their house away to avoid paying for their care, getting that for free at the taxpayer's expense. I mgiht choose not to pay myself large dividends and get benefits. If it's not against the rules then do it.

Tell me that what I am doing is immoral if you will, but what I think is very unhelpful is people saying that it is illegal when they have no idea whether it is or not.

meester

Nomad25 wrote: »

Surely dividends are based on profit - and profit has to be declared each year and is subject to tax? Or am I being dumb? I am reading this and your other thread Meester and I think I can see what you are trying to do - I am intrigued to see what will be the outcome.

I own a company. Like Tesco. But smaller. And not selling fruit and veg.

But a company.

So the company is taxed on its profits. Nothing to do with me personally.

As director of the company, I can opt to declare what ever dividends, paid out of company profits, that I like (although it is illegal to pay out dividends in excess of profits). At the point that my company (or Tesco) sends me a dividend cheque, it is then personal income. If my company (or Tesco) opts NOT to send me a dividend cheque, I have not made any personal income out of it.

In addition to that, my company pays me a small salary via PAYE, and the same to my wife. This gives us our NI stamps (without actually paying any NI, because we don't earn enough), and also reduces the company profits which are chargeable to tax. And because the salaries are the same as the personal allowance, we pay no personal tax on them.

dmg24

Anybody else thinking that meester is just a big old troll?

flowerscotland

i thought tax credits were for people on a low income in NEED

the op doesnt sound like hes in much need when hes the director of a company and sends his children to boarding school as mainstream school is no longer 'adequate' :mad: :mad: :mad: :mad: :mad:

NAF_3

I don't think he is a troll but I offered what I thought was decent advice and got no recognition for it while those who are getting uppity at what he is doing DID get recognition. I'm not concerned with who is morally right on this. The only people who will be able to decide for sure what he is entitled to are the HMRC (Stifle that laughter). Best laying everything on the table with the HMRC and let them be the ones who decide whether it is legal or not.

pennypuppy

dmg24 wrote: »

Anybody else thinking that meester is just a big old troll?

Maybe but it's all gone wayyyyyyy over my head.

Naf you are right. I only got an accountant for our business this year because I always did up our books then took them to the tax office and asked them to check over things with me. They stopped agreeing to do this - hence the accountant. Anyway even at the tax office they used to tell me to claim for things I had left out.

I think its a dangerous thing to have an "I'm alright jack" atitiude, god help society if we are all self obsessed.