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Tax credits question

1 reply

abitbuggered · 06/07/2012 20:45

Not sure if this is the right place, but i'll ask anyway.

My partner and i are about to put in a joint claim to tax credits. My income is low due to self employment, so not the issue here.

My partner works in a garage and is on PAYE, however he has a very small company (LTD) of which he is a director of, with his dad. Its a rental company, which makes about 10-15k a year. Its run for a few years and doesn't grow. Dp doesn't take a wage as it takes no time to run it and he hopes at some point there may be enough to buy another property, so he classes his personal income as nil (he is not self employed), although the figure is given in to the Inland revenue each year.

However, reading through, i think tax credits may consider that this is a nominal income, and that he could take a wage, the fact he doesn't is irrespective.

My question is, would he be swaying onto dodgy ground if he paid himself a small wage to cover the few hours a months work it takes to run, say £200 a month, then declares that as a wage on top of his normal garage wage to tax credits? Then he is taking some money, but an amount that reflects the small amount of work he does? Or would that be viewed as wrong?

He certainly couldn't sustain or justify taking a large income each month, but obviously i don't want to fall foul of any income rules.

Hope someone can help!!

OP posts:
CogitoErgoSometimes · 07/07/2012 10:52

Tax credits are determined on the household's taxable income. However he derives his income and wherever itcomes from he should declare it to HMRC in order to pay the correct tax. That's the number to also declare to HMRC for Tax Credits. Would recommend anyone in your partner's position to employ an accountant.

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