issues with universal credit

[Blacklaw]

hopefully, someone from the legal profession can help me with this conundrum.
Previously we used to get tax credits for our kids, which they have now scrapped and forced everyone to sign up for universal credit, which is a nightmare TBH, as it means we now get treated like unemployed.

Both myself and my wife are self-employed and have small businesses. We now have to report the company income every month, and even though it is a ltd company (which they know), they are treating any profit the company makes as though it is personal income and thus decide that we are not entitled to anything because there is profit left after the costs each month.

I cannot seem to get it through to them that this is not how a ltd company works, and the money doesn't belong to us, it belongs to the company, and I cannot just withdraw every penny from the business each month for my own personal use, that a company needs working capital in the bank to operate and pay upcoming bills and costs for providers and services etc.
We pay ourselves only what our business can afford to pay us.

Alas this is putting us in a serious financial situation now as we were reliant on those tax credits each month and no amount of scrimping and saving and cost-cutting is going to make up for that deficit.

I have tried pointing them at the details on companies house that explains how a limited company works and how its different form a sole trader, but it has fallen on deaf ears.

anyone got any advice how to deal with this?

 

[DWS]

That is how UC works for a Ltd Company, they base it on the Companies monthly profits

 

[Russ Michaels]

That is how UC works for a Ltd Company, they base it on the Companies monthly profits

But you cannot treat a company bank account as your personal slush fund or you will go out of business as the company will have no money to pay it's bills

 

[DWS]

I understand that, but UC treat the Companies profits as yours, that is their rules I’m afraid,
Their point is, what is to stop you leaving all the money in the Company and claiming the maximum UC, and then you can withdraw it all at a later date.

 

[Blacklaw]

But you cannot treat a company bank account as your personal slush fund or you will go out of business as the company will have no money to pay it's bills

exactly my point

 

[ethical PR]

hopefully, someone from the legal profession can help me with this conundrum.
Previously we used to get tax credits for our kids, which they have now scrapped and forced everyone to sign up for universal credit, which is a nightmare TBH, as it means we now get treated like unemployed.

Both myself and my wife are self-employed and have small businesses. We now have to report the company income every month, and even though it is a ltd company (which they know), they are treating any profit the company makes as though it is personal income and thus decide that we are not entitled to anything because there is profit left after the costs each month.

I cannot seem to get it through to them that this is not how a ltd company works, and the money doesn't belong to us, it belongs to the company, and I cannot just withdraw every penny from the business each month for my own personal use, that a company needs working capital in the bank to operate and pay upcoming bills and costs for providers and services etc.
We pay ourselves only what our business can afford to pay us.

Alas this is putting us in a serious financial situation now as we were reliant on those tax credits each month and no amount of scrimping and saving and cost-cutting is going to make up for that deficit.

I have tried pointing them at the details on companies house that explains how a limited company works and how its different form a sole trader, but it has fallen on deaf ears.

anyone got any advice how to deal with this?

You may be better having one of you taking up paid employment if your business isn't generating enough income to support both of you.

 

[Craiglincs]

You can deduct money saved for tax and some other things. Might be worth paying annually for some stuff if you can

 

[mahad]

UC treats company directors like you and your wife as self-employed even though you're not sole traders. They assess your entitlement based on your monthly net profit, not the company's total profit. So to adress the issue you can do a few things:
First off gather evidence like detailed financial statements for your businesses and show the account for bussiness and the account for personal income.
Then you can request a "New Style Statement" Meeting from UC to discuss your situation.
Throughout this you can consider to hire an advisor, he knows best, if you hire the best.

 

[Blacklaw]

You may be better having one of you taking up paid employment if your business isn't generating enough income to support both of you.

not quite that easy i'm afraid, i'm sure everyone wishes great jobs were falling out of the trees,
Both of us have health problems/disabilities, which is one of the primary reasons we are self-employed and work from home.

due to the current recession and inflation, our mortgage payments quadrupled, then they got rid of tax credits as well, which crippled us. Prior to that we were doing just fine.

 

[ethical PR]

not quite that easy i'm afraid, i'm sure everyone wishes great jobs were falling out of the trees,
Both of us have health problems/disabilities, which is one of the primary reasons we are self-employed and work from home.

due to the current recession and inflation, our mortgage payments quadrupled, then they got rid of tax credits as well, which crippled us. Prior to that we were doing just fine.

I wasn't suggesting 'great jobs are falling out of trees' and you hadn't mentioned both of you have ill health. I am sorry to hear that and hope there is some work out there you might be able to find that can fit around your ill health. For example both the NHS and local government have roles you can do which are home based from customer services to finance, legal, policy and clinical advice

 

[Craiglincs]

For example both the NHS and local government have roles you can do which are home based from customer services to finance, legal, policy and clinical advice

I've not seen anything from them as remote. It's a major reason why I'm looking to start up. Where are you seeing the roles? Official websites?