UC director ltd company help

[PrezelwithMarmite]

Dh is a director of a ltd company. He draws a wage and i have a small wage for the secretarial work around the dcs.

We have received UC for approx 3 years.
The business is relatively new so this is the 1st assessment period weve had to submit.
Now as a household we've only received our 2 salaries.
The business only made 320 profit that month with all the outlay costs and obviously being new
Weve put in the incone and expenditure to the penny.

Our award was done but under dh its says £320 self employed earnings. However this is in the business not out household income. Obviously a business needs to build which will take time.

Is this correct? Because it means we're short as a home. Its not like its in the thousands! And will declare dividends when they happen or wage rises.

This has been one big headache. And the business made so little but its been taken into consideration for out household income. Is this correct?

Surely you need to declare both the wages that the business is paying you? Does the business pay you both a set amount and the £320 is profit after wages have been paid?

Sorry yes. The accountant does all that, both wages were submitted
The 320 was what the company had in the bank

Where you are a director UC take into account the profit made by the business plus any PAYE salary you pay yourself.

This is so that directors aren't not treated differently to sole traders.

Unfortunately they do not take account of you needing money to grow the business, or that money may need to be put side for future outlay.

revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/companies/

The PAYE wages should be treated as an expense off the self employed profit though. They shouldn't be double counting.

@WelfareRights is that a link to the official guidance page? I find it really difficult to read and understand

as a director I obviously have cash in the bank for future VAT and Corporation tax fees. Are these taken into account for the cash in the bank profit I’ve got?

Yes it was taken as an expense.

320 was what was left after everything.
But they said that's his earning as self-employed. Its not. That's to cover any future expenses or leave in there

I thought being self employed or a Director the advice was to leave yourself a buffer for when you weren’t working

i've recently closed down my Limited company but was fortunate enough to have 6 to 12 months in the company account for being between contracts

it really doesn’t seem fair. I appreciate it's to stop people hiding huge sums in their company accounts but you'll have to pay eventually to take it out of the business

Exactly just a buffer. If thousands he would draw divedend

To be fair you are trying to claim benefits. It’s right that funds in a controlled company should be taken into account. Otherwise we could all be paid via a company and could manipulate our salaries for benefits purposes

Our salaries haven't been manipulated at all. We've taken the most we can without leaving the company in an overdraft. Its not like theres thousands in the company being ' hidden' its a couple of hundred.
But its one of them thing's. Hopefully business is picking up and we can up our wage. In the meantime as we try to progress the company we have credit cards we can use to make up the deficit in universal so our household doesn't suffer. We have ways around it.

It's to put you in the same position as a sole trader in order to stop self employed "manipulating" figures to claim benefits.

A sole trader's declaration is "money in less business expenses", i.e. the same as you as a limited company. Monies kept back for the future as a sole trader are counted as "income" in the same way as a limited company, because you've not spent it yet. You can't claim an expense that you've not yet incurred!

Yes i do understand that now but that's different to how the job centre explained it. They said only paye wage, dividend and bonus would be counted.
Either way we cant use that money in the limited company business account to pay our rent, weekly shop etc.
So as a household we now need to use credit cards to survive because the money that was left which was barley anything does need to be aside for the vat bill, vehicle rent.
Assessment period was to 2nd. 4th vehicle hp goes out. So its just a bit of a faff. But fingers crossed it will progress that the income increases to pay himself a high wage not to need UC