Partner hasn't submitted dividends

[universalcred8]

Please don't judge as I am so upset and worried, I have changed some minor details as could potentially be outing.

Partner owns business, takes £900 wages and the rest in dividends.

I claim UC, had my DS 11 months ago and have had health complications since. I do plan on going back to work when I've had the 2 operations I need.

Partner moved in and had to move to a joint claim, absolutely fine, attended meeting at job centre, had to give copies of business registration, certificates, quotes, proof of earnings etc. all submitted.

UC been paying for 8 months and have just asked for 6 months worth of bank statements. Absolutely fine, uploaded bank statements, partner hasn't realised he has to declare dividends, now I've seen them and uploaded them I have such bad anxiety that I'm going to be in trouble.

I am out of my mind with worry. Does anyone know what happens? I've left a note on my journal to my work coach but no reply yet.

How did he not realise you have to declare dividends if you do? Was there not a question that said 'do you receive dividends'?

That was my point @stilllovebeetroot

So he didn't 'not realise'.

Presumably therefore you have been fraudulently claiming UC.

Dividends are generally treated as capital, but I’ve been out of the welfare rights system for a couple of years so check this. Turn 2 Us are a great resource

You'll need to pay back anything you're not entitled to

partner hasn't realised he has to declare dividends

Bullshit.

Otherwise every single self employed person in the land would pay themselves as much as possible in dividends and claim UC 🙄

What a shame he’s dragged you into his crime.

Don’t worry - speak to them, blame him, and agree a repayment plan. You’re not going to prison over this.

There is no way you or him didn’t realise considering it’s a specific question.

So he pays himself min wage to dodge tax and then pays dividends which is taxed lower than earned income, and then you all claim benefits in top?
I hope they throw the book at you.

You'll just have to pay back what you owe. They only usually prosecute is very large sums are involved and it involves housing benefit etc. You'll be offered a repayment plan.

Just out of interest @Ponoka7 - what is considered a very large sum?

How much are his dividends? Is it enough to make you not eligible for UC?

How much are the dividends?

Chances are you will have to pay everything back but that’s it.

Years ago I submitted my DH dividends to tax credits and god knows what they did but they didn’t put it on the paperwork so I got more then what I should have …. I just put the money in a separate account and when I had to renew I owed them some money and I just paid it off and that was it.

Also it’s more likely you and your partner did know you had to declare dividends as it asks and just didn’t hoping to get away with it which they also know as they asked for 6 months of bank statements

They've asked for 6 months of bank statements because they suspect he's been playing the system by not declaring the dividends. You will get asked to pay the moneys owed back to them at the least.

Frankly, you're right to be worried. What on earth did you think would happen? You've knowingly been claiming UC in full knowledge that your partner is paying himself in dividends and keeping his salary low. It's fraud. Like hell it happened 'mistakenly.' The forms are very clear and specific. He's obviously lied and pretended he's only on a 900 a month salary.

@universalcred8 - I don't want to make things worse for you, but I do hope he has declared the Dividends on his self-assessment tax return, because if he hasn't then the tax office will also want any tax due repaid

Try not to panic. What's done is done, for whatever reason. You'll have to repay any UC overpaid, but it is unlikely that for £8k that they will take you to Court. You could, of course, contact them immediately and say you have just discovered that the Dividend payments should have been included but you/he didn't know. On the other hand that might make them pretty sure that you were both 'at it' and knew perfectly well, since you have contacted them after you got the letter

Tax avoidance is not the same as tax evasion. Donating to charity, participating in salary sacrifice schemes, putting money away into an ISA etc are all tax avoidance and all perfectly legal. As is a self employed director of a Limited company taking dividends. Most self employed people with their own limited company take a mix of salary and dividends. There are rules in place over who can receive them, when they can be paid, records that have to be kept and the income tax that has to be paid by shareholders who receive dividends above £2,000. So you're unfair to claim the OP's partner is dodging tax.

A mistake has clearly been made with their UC application (I can understand how the OP may not be on top of things, given her health conditions, new baby etc.) and any overpayments will no doubt have to be repaid, but there's no need to stress her out further by telling her you hope they throw the book at her.

As stated by others dividends need to be declared as they are earnings, just paid in a different way.

Sorry but your partner would be well aware of that.

How much are his dividends that haven’t been declared? This is the key question.

You will then have to pay back the overpayment that you’ve received.

We would still be entitled to UC even with the dividends I'm guessing just not as much?

I am ashamed and embarrassed, I have never claimed benefits in my life, neither has my partner and I genuinely didn't realise.

The reason he only pays himself £900 is because that's what his accountants advise, everything is above board, done through accountants.