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

IFA

meester wrote: »

Don't care.

Seeing that you seem to spend most of your time on the 'Gambling Introductory Offer Loopholes ' forum, it's a bit rich to talk about greed.

Be fair, I'm not harming government funding on essential services by not paying into the system. Whatever makes you happy, money is not everything..

stebiz

I am not going to judge the OP. There are loop holes in everything like I found out wiping out 3 credit cards and getting bank charges back. Those responsible are the government for not tightening those loopholes. I know many people who own shares in private companies who do not get paid a dividend - and therefore are entitled to Tax Credit. I know farmers who do the same and have farms worth over 2 million pounds.

Blame the government - not the OP. Providing he keeps within the law these are benefits he is probably entitled to. To some it may suck but like I say he did not make the rules.

Stebiz

donnalove

lil_me wrote: »

I think this is the first time I have even thought this, but people like this make me sick, never wished for someones business to to seriously fail until now. It's fraud, I don't care what back exit you are using to do it, it's fraud. I don't agree with it, I find it disgusting, I hope that one day your children find out that you brought them up by doing such things and hate you for it.

see what a great mood this thread has put me in, I'm usually a nice person. dmg, ok this person has not disclosed their details to us but I am sure that if HMRC believed something illegal was going on they would ask MSE website for as much detail on the person as possible. I've ran a forum who's had to hand over details to DWP before inc logs, email addresses, names, IP addresses etc etc.

you know this post made me really mad.:mad:
IT'S NOT FRAUD

my sister and her husband( three children between them) have just brought into a buisness that soon will start making a profit, my brother in law's accountant has told them that until it's bringing in enough money( after getting back what they paid for the buisness)to pay themselves nothing but the basic which is around 70-80 a week) and the rest in dividends so as to claim tax credits, they have been living on the bread line since last august but decided it's worth a gamble as it will be very profitable in the long run. are you gonna say the same to them!!:mad:

when you run a buisness you take advantage of all the loopholes, after all it's the governments fault for them being there

The op is doing nothing wrong in the way he is heading, he is thinking about his and his family's future like we all do and the best way to maximise his returns to secure his children's future, which don't forget that by the time they grow up there will be none of this around.
i have three children two with dissabilities, i too have fibromyalgia and have only one wage and my little income coming in along with tax credits but i wouldn't begrudge this guy just for being a success

ohreally

donnalove wrote: »

when you run a buisness you take advantage of all the loopholes, after all it's the governments fault for them being there

"Taking advantage of loopholes" is an euphemism for exploitation and unfortunately it tends to be the least well off and financially most vulnerable which ends up footing the bill to pay for this through inversely proportionate and unaffordable taxes.

Stantheman

Meester, I started off sympathising with you over the replies you've received to what I thought was a genuine query. However reading through the thread you seem to be taking every opportunity to boast about your wealth and about your "cunning plans" to avoid tax. Sorry to say but I think you should maybe consider that some people are not as fortunate as you and that your statements may be regarded by some as crass and totally out of keeping with the spirit of this website.

The tactics you use are common trolling tactics and you have achieved what in my opinion you have set out to do which is to wind people up. If you really need some advice on what is a complex matter then I suggest you invest just a little of your wealth on professional advice.

And yes for the record I also hang out on the gambling board. You should try it. Its all tax free!

Murphy_The_Cat

meester wrote: »

Because the friendly government has decreed that all dividends, as of April, paid to her, are deemed as having being paid to me instead. Which means that instead of receiving £30k, inside the basic rate allowance, and no further tax to pay, I would have to pay higher rate tax on it, which is 25% on dividends

And hence I would have to pay £7.5k extra tax to get the money out.

Have you got a link to that, please.- or does this one cover the situation?

Is Mrs mester 'active' in the business ? if not, it could well be time to reassess the situation and see what contribution she could ACTIVELY make to the Company.
Company Secretary is always a good one to start with as is any role that could be considered to be administrative oversight. i.e. she comes in and makes sure that the office is working, on a regular established basis - perhaps on the day that she brings the baby into town to do the shopping and shows the little'un around the office. oh, and make sure that she is a signatory on cheques and that she signs a fair number of them each year -- after of course she has taken full consideration as to whether they should be paid or not (count that as being 30 mins per cheque, 10 per week is 6 hours justified).

etc. etc.

Of course these things are a lot easier to do if your Company actually 'does' something i.e buys/sells things, has tangible assets etc Rather than (say) providing consultancy services, which only you can do.

Murphy_The_Cat

OP, you don't have a Company Car do you ? If so, your calculations will have to reflect its benefit in kind valuation.

Voyager2002

I can understand the indignation that Meester has aroused, but let's remember that he is simply small fry compared to the many seriously rich people who pay minimal tax to this country, while living here and benefiting from the services for which all of pay.

Seriously rich people pay experts to answer questions of the kind that Meester has posed: their time is far too valuable to mess around with tax credits. And they avoid some of the pitfalls into which Meester is likely to fall. For example, that brilliant idea of taking remuneration in the form of pension rather than salary: in fact there are limits on the proportion of salary that can be paid into a pension scheme each year, so Meester is going to waste a lot of time and trouble, and maybe attract official attention, before finding that this scheme will not work.

Above all, it will be obvious from the dramatic reduction in salary exactly what he is doing, and why. HMRC are likely to respond by conducting a full investigation into his tax affairs, and the cost to him of this (direct costs of preparing the necessary documentation, as well as the time and trouble involved) will vastly outweigh the value of the tax credits he receives.

Anyway, I hope that anyone who has been angered by this glimpse of how the other half live will now appreciate that the taxman does do a useful job, and will stop voting for political parties that promise lower taxes and to get the taxman off your back -- he spends most of his time on the backs of people who are really taking the mickey out of all of us!

meester

Voyager2002 wrote: »

I can understand the indignation that Meester has aroused, but let's remember that he is simply small fry compared to the many seriously rich people who pay minimal tax to this country, while living here and benefiting from the services for which all of pay.

Seriously rich people pay experts to answer questions of the kind that Meester has posed: their time is far too valuable to mess around with tax credits. And they avoid some of the pitfalls into which Meester is likely to fall. For example, that brilliant idea of taking remuneration in the form of pension rather than salary: in fact there are limits on the proportion of salary that can be paid into a pension scheme each year, so Meester is going to waste a lot of time and trouble, and maybe attract official attention, before finding that this scheme will not work.

Wrong, wrong, wrong.

Perhaps you should consult an adviser, so that you are not so misinformed?

As an individual you are entitled to contribute 100% of salary into a pension, or £3,600, whichever is higher. A company is allowed to contribute £235,000/year, the only caveat being the "Wholly & Exclusively" doctrine, which states that total remuneration should have a business purpose (i.e. as a fair market salary for the job), but by definition it would do, since the purpose of paying it would be to not be deemed to be underpaid for tax credits purposes, so the two are self-supporting.

Above all, it will be obvious from the dramatic reduction in salary exactly what he is doing, and why. HMRC are likely to respond by conducting a full investigation into his tax affairs, and the cost to him of this (direct costs of preparing the necessary documentation, as well as the time and trouble involved) will vastly outweigh the value of the tax credits he receives.

The number of investigations per year is tiny relative to the total. My personal tax affairs are very simple, and in any case I am fully insured against tax investigations.

Anyway, I hope that anyone who has been angered by this glimpse of how the other half live will now appreciate that the taxman does do a useful job, and will stop voting for political parties that promise lower taxes and to get the taxman off your back -- he spends most of his time on the backs of people who are really taking the mickey out of all of us!

No political parties are promising to cut the overall tax burden.

Incidentally, yours is quite the most inane comment I have read on this thread: as you have seen, a tax rise has motivated me to seek a loophole. The higher taxes are, the greater the lengths people will go to avoid them.

if taxes were cut and simplified, then it would not be as worthwhile to avoid them, and everyone would ultimately pay a fairer proportion. I assume you're aware that bank workers etc. on £100k+ don't pay 40% tax on all their income.

Perhaps you should campaign to cut the bloated welfare state, so that people don't exploit it instead.

Step 1: Change the rules.
Step 2: Send people that are actually breaking the rules, such as this guy, http://news.bbc.co.uk/1/hi/england/london/7202363.stm to prison.

liney

Whether you are techically breaking the law or not, you are ensuring that 'I, The Taxpayer' pay for your exisitance, instead of paying your own way, which you are perfectly capable of doing.


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Sound familiar?