Claiming benefits when you're not entitled

[Aprilcherry04]

Was recently at an event with a fairly close friend and we were discussing benefits etc with a few other mums. One of them was talking about EMA and my friend asked if she could claim it for her son who is in sixth form. I said it depends on your income but would expect as they own a successful business they probably wouldn't be eligible. During the conversation it came out that her family get rather high amount of tax credits and also free school meals. I have to admit I was shocked as they are fairly affluent and own several properties. She says they never take money from the business unless it is cash only or they can charge it as expenses. They lead a fairly extravagant lifestyle go on holiday a lot, drive new cars etc. Sometimes my friend would ask why I don't buy expensive branded clothing for my kids and I would say I cant afford it but it never bothered me as I felt her family deserved a nice lifestyle. Also her husband sometimes mocks people who don't work. I know it is not my business but I feel a little disappointed in her as a person and feel like I didn't know her as well as I thought I did. I think I am being unreasonable but just wanted to vent.

Its quite common and not illegal per se. Ethically it's a bit grim.

If she owns a business she contributes more than most to the public pot so if she’s entitled to take it back I don’t see the problem.

I think that's pretty common and always has been. I went to university back in the dying days of grants and a lot of the kids I was at school with whose parents owned decent sized lucrative businesses suddenly tootled off to university with a full grant because on paper they had very little.

Wow, just wow good so presumably you're okay with benefit fraud too.

That's the point. They're not contributing to the public pot as they claim not to earn anything.

That is bollocks @Goodlookingcreature business owners do not automatically contribute more to the pot. And even if they did that does not entitle you to more help!

With some small business people, bending the rules is almost like a sport.
Don't even ask them about what things they consider tax deductible (spoiler- it's all the things!)
Agree with Jeremy this sounds legal if cheeky as fuck.
If its any comfort, Universal Credit is much stricter so the party will be over once they get moved over.

Well they are entitled to claim those benefits so your Thread title is misleading.

Maybe ask MNHQ to change it to "Business owners - should the financial rules be changed?" or similar?

So all the rental from their properties is paid in cash?

People who claim public money that they're not entitled to give me so much rage. It's basically stealing. Look at all the threads on here of people who darent even have a new partner stay over for fear of being labelled a benefit fraud because they claim as a single person.

I had a friend who did exactly that - her partner worked away a fair bit so they claimed she was single and they got all of the single person benefits as well as two incomes. No wonder she could always go on holiday.

As a business owner I can safely say if they're getting that much to lead that lifestyle I'd assume they're VAT registered plus paying corporation tax on the earnings their business makes, whether they choose to take that out as a wage (and pay more tax) or take it out as small dividends or loans if they've invested heavily in it which sounds like they are doing. So yes, they'll be putting more in the pot than most

Properties are in other family members name.

Yes I've got a friend like this, I also found out recently that they get tax credits and child tax credits as they make out they earn less than they actually do for his business (her words). This was also done to keep maintenance payments down to his Ex for his 2 older children (again, she told me this)
Their outgoings are far more than ours, even before food, petrol, day to day etc. therefore they must earn way more than us and we aren't eligible for any tax credits. They really do live the Life of Riley, always out, expensive car, new caravan, weekends away etc.
It's a bit galling really.

High earners can (with the help of accountants) make it look like their revenue is 10K a year meanwhile be millionaires through carefully set up trusts and business accounts.
Perfectly legal.

Surely if they weren’t entitled to it, they wouldn’t get it?

There must be some legal documents that show their names as owners.

I don't know all the details about how they do it as this is the first I'd heard of them claiming benefits but her dh has told mine that they own 6 rental properties

Personally I find obsession with designer label clothing, especially for children, shallow, but I'm surprised given they are so image conscious that they have their children on free school meals (if they can easily afford not to). I remember my poor friend feeling so embarrassed about having these. It's very wrong that children should feel ashamed but that's another issue.

I’m not understanding this, how can she still get tax credits and other benefits If they are high earners?

I don't know how they can claim expenses back for childrens' clothing. I claim my clothing back that I need for my work, but I cannot claim back for my dc's uniform. Would love to know-how lol

Because they don't officially take a salary from the business so therefore legally they have no earnings. That's what she said. That's all I know because she started to change the subject as she realized she'd said too much. One of the other ladies also said she'd asked her not to mention it to anyone else

I would not be friends with these people. What's the betting that they are also under declaring rental income and the like...

Total scum in my opinion. It's also sounds like they have progressed beyond "playing the system" to actually cheating it. A deep dive from HMRC on their business might reveal a lot that they can't explain. I'd consider an anonymous phone call to their fraud team but I guess that depends how close they are to you.

This is legal so op get your wanky title changed. This is about the legal loopholes in the tax system, that benefit the wealthy. This can lead them to being able to claim benefits and tax credits legally.

Can they be changed? Yes absolutely.

Will they be changed? Probably not in my life time.

There is no political will to go after the couple of percent actually claiming benefits incorrectly.

There is no political will to challenge and go after tax evasion, let alone tax avoidance which this is.

My friends ex husband paid her less than £100 per month for 5 children and currently pays her nothing. This is because of the way he has structured his dividends as a company director.

The cms would not do anything either. Another area where there is no political will to make a change.

Unless of course, those 6 houses in someone else name are in fact future inheritance. Which would make sense, and would be funny as fuck in years to come the owners will the houses to someone else.

So in effect, the 'pot' is only for the deserving? No wonder the UK is going to the dogs.
Basically, if you're poor, then you should die in the gutter and never had a handout because you don't contribute anything.
But someone with money, can get help from the pot because they know how to bend the rules?
Sick!