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.

Thank you @C152 I have been in tears and panicking about this since I realised yesterday. I feel sick and have enough to deal with. His dividends aren't anywhere near £2000.

This is quite an over reaction - you've made a mistake - you've never claimed benefits before - they'll understand and worst case you'll have to pay it back over time. Stop stressing.

Stop stressing. You’ll have to pay it back but hopefully they’ll let you do it in instalments. I think your partner knew but didn’t want to admit to it. It’s his mess and money to sort out.

Actually there's not much difference anymore. There is tax on dividends which roughly equates to the tax and NIC if he were declaring as self employed. Things have changed a lot since Brown's days when he buggered it all up!

So not only does he reduce his tax liability by paying himself dividends but he’s also happy to take UC that someone else has paid their tax to provide. Sadly, not illegal (hopefully) but a very off-kilter moral
compass somewhere 🥹

It may be within the rules blah blah but’s it’s not right is it? How can someone (a family) who has an accountant (!) be in receipt of benefits?! And here we are, silly people, paying full whack paye tax, probably subsidising your income handsomely. Christ.

@stilllovebeetroot sorry i meant to quote a pp about tax on dividends etc.

That's not true. Dividends are paid out of company profits that have already suffered corporation tax. The current rate of corporation tax is 25%. The combined tax rate on dividends at the lower income tax rate is nearly 32% and for higher rate taxpayers it is almost 51%. There is no tax dodge.

Pretty sure that as a self employed person, they want to know the business's profit per month, not however much your boyfriend chooses to pay himself. I'd check this, as you may not be entitled to anything if his profit is much higher than his wage and dividends.

Funny how your partner has only realised since he’s been asked for bank statements.

Sorry, he’s either lying or you both are.

Do you have a work coach? Do you have regular appointments at the job centre.
You may need to leave your journal message as ‘a payment’ so you get a response.

Likely you’ll just get letter about an overpayment and you’ll need to organise a repayment plan.

@universalcred8 I am so sorry you are getting a very hard time on here - but it is on AIBU, so probably to be expected

As @Kovus says, tax on Dividends is not straightforward, and a good Accountant will advise how to best deal with Finances. Tax planning is NOT Tax evasion and is not illegal. If your partner has an accountant, then all be well from his financial affairs point of view ( unless the accountant is a crook, but highly unlikely!! as he could get struck off)

From the Government Website:

How are tax planning and tax avoidance different?
Tax planning is different to tax avoidance. While tax avoidance is an unethical bending of the rules to use loopholes to dodge tax payments, tax planning is the use of the existing tax law in a way that would not be considered “dodgy’’ by HMRC.

So, as I said in a previous post, please try not to panic. If you have been overpaid, yes they will want the cash back, but you should be able to pay it back in instalments. If it's worrying you so much, I would get in touch with them and explain how it happened that it was missed and ask what will happen now?

It is highly, highly unlikely to go to court or that you finish up in prison. Would cost too much money to get back the money you might owe them for the last 6 months

We're aware that tax avoidance isn't tax evasion, and taking a lower salary plus dividends to avoid paying as much tax is perfectly legitimate. What isn't ok is lying about taking dividends in order to claim public funds!

Paying a wage and then claiming dividends isn’t “dodging tax”.

as a small business you pay corporation tax on the income and then pay again on your dividends

Exactly. But many people don’t understand this!

I made someone watch me divvy up £1000 once (I’m cautious and round up£
15% to vat account (flat rate)
20% to corporation account
then transfer dividend to me -
then I put 25% in my personal tax account
so basically out of a grand I personally get £300.

Yes. But you understand money and how a small business works. That’s the difference. I understand as well.

On a very basic level, people get benefits if they don’t earn enough money from work.

So the govt has to check how much money you earn from work.

What on earth made your partner think that he didn’t have to tell them about a large sum of money he was earning?

I agree with you - was just demonstrating how I try to explain it to those who don’t quite get it )m(and are crying tax evasion for oerforcu standard practice)

I wish people understood the costs and taxes and VAT small businesses pay before dividends.

Taxes should be taught at school!! So many people with little understanding is a bit scary.

Corporation tax, VAT, business rates, PAYE (which incudes the NI payments and Income tax we take from salaries, we are responsible for paying them to the government.) Then we also have to pay 13.8% of each staff members salary to the government through paye as an additional payment. This isn't taken from the staff salary but an extra expense to the business. Plus pension contributions

But, to answer OP. Put your tin hat on because you will have lots of questions from UC. Any over payments you can make slowly.

But HMRC will be all over your partner and there will be fines and interest to pay.