WIBU to claim tax credits in this situation?

[dingledangledongle]

I have never had tax credits before. I work part time and earn about £20K before tax. DH was employed in a high earning job (over £100K pa before tax), taking home about £4800 per month.

He then became a partner in his business which is sort a fledgling venture and currently they aren't making a profit. He still gets the same take home monthly 'pay' but this is classed as a director's loan because if the company never gets profitable as far as I understand it, he could have to pay it back. Therefore as far as HMRC are concerned he is self employed earning nothing.

I think if the company does well then he will be taxed on it retrospectively but it will be as if he earnt that in one year - still the tax bill would be big and I think his company are keeping a portion back for this purpose in future if needed.

We live in a big house, bigger than we probably need. Apart from that I don't think we live an extravagant lifestyle but don't count every penny either. We are in overdraft at the end of each month because he earns significantly less than when we bought this house (used to get a big bonus). We have some savings but not loads because we've put a lot into the house.

We have three children (2 at school, 1 not yet). We have one summer holiday and normally go to DH's home country in the winter to see his family.

We stopped receiving child benefits when they changed the criteria to make it means tested. I recently started them again because as I say, my DH is not classed as earning anything.

I then checked and discovered we would be entitled to substantial tax credits, potentially £1000 per month plus.

WIBU to claim this? On one hand it doesn't sit well with me because I feel tax credits are aimed to help people who are struggling to cover the basics. On the other hand, if we have to repay this money, the 'directors loan' he is currently getting, in future, I would wish that I had claimed what we were technically entitled to.

One option is I could claim it and put it in a separate account.
I've had advice from a relative who is a chartered accountant who says there's nothing dodgy about it and if we are entitled to it I should claim it.

What do people think?

I don't think you should claim it. You don't need it.

If by the end of the tax year your partner pays a tax bill for a large salary. You will end paying the lot back. I would assess whether you want that hassle.

Of course you would be unreasonable, but you know that already.

He’s still getting £4800 a month, so no. It’s dodgy AF to be getting it as a loan, so I’d be wary of that.

But no, with £5k + a month coming into your house you don’t need it. It would be a pisstake.

Yes. It’d make you a massive arsehole

I claim tax credits and work with vulnerable people who claim them. I speak to people on a daily basis struggling to feed their children, people who have to ration gas and electricity.

Today a lady cried with relief when I told her her tax credits claim was in payment after they’d stopped unexpectedly.

I think your’re pretty fucking low. If it’s a rise you wanted you got one here

Sure, if you want people to think you are a greedy scrounger

You don’t need it- you could downsize your house, cut back your spending. You earn decent salary part time as it is- more than I earn full time.
Tax credits in your situation would likely end up having to be paid back anyway once your husbands substantial salary became an actual salary instead of a “loan”

YABU. If you DH decided to take a job he couldn't afford that is entirely your problem, not the taxpayers.

Claim it but stop your husband from taking money he shouldn't out of the business.

Wow.
Just wow.

No you shouldn't . I've heard it all now!

Those entitled to sites often over-estimate, you may not be able to claim for 3 children, you may already be in a UC area, if they overpay you you will have to pay it back and you don't need it. All very good reasons not to claim it.

You’re taking the piss surely

I don’t think you should claim it. Regarding pp’s comments about the directors loan, this is a perfectly standard thing to do as the director of a company. Doesn’t even have to be a set amount, directors can borrow as and when they feel like it. Nothing dodgy about it at all.

I still don’t think you should claim though as most people claiming this type of benefit are in far worse positions than you are.

Imagine all those shiny new handbags and shoes you could buy! OMG! You are totally entitled to it, don't let anyone tell you different. In fact, you could now probably afford 2 summer holidays!!! That's right! 2 SUMMER holidays!! And maybe even a quick winter get away if you do manage to keep it in a separate account!

Nothing dodgy about it at all

Morally it is, it’s tax dodging.

Morals aside I wouldn't do it. They are notorious for fucking up claims and then wanting huge sums of money back.

If you can manage to squeak by without then I wouldn't.

Me and my partner bring in 24k a year and we’re entitled to fuck all! I’m sure you can manage on 5k a month

director’s loans tax info

As you said it is for people who need the help and financial support. It’s not just for anyone who wants it and can manipulate their circumstances to fit the criteria. It also the form asks for any other income coming in to the house. You would not get the tax credits without lying on this part. You have 4500 coming in via your husband plus your own salary. This benefit is not for you.

Are you saying you have had a household income of 120k until now and you still do but may have to pay some of this year's back so you may claim tax credits?

Will you be trying your luck at the food bank?

I've had advice from a relative who is a chartered accountant who says there's nothing dodgy about it and if we are entitled to it I should claim it.

But what does your husband's company accountant say about it. That's who you listen to, not second hand advice from a relative.

And yes you are being very unreasonable, tax dodging as SoddingUnicorns pointed out. Likewise with the child benefit.

I think you'd be wrong to claim it but I think you already know that, otherwise you wouldn't have posted asking if it's ok!