Tax credits

[kwaboy]

Right just need some reassurance as I’ve had a conversation with someone on the HMRC tax credits helpine tell me some things which I believe are incorrect

As my business is new I’m not paying myself much this year. I have a limited company for which I’m a director. He is saying that I should be laying what I’m paying myself because it’s under min wage however I believed that as director I’m exempt from that. Also I have a van in the company name and use for company only and he said that’s a BIK, as well as a mobile phone that’s paid by the company (it’s in the company name) I said these are expenses to the company and separate to my pay and he said no that’s not the case, I’m confident he has got it wrong but I wasn’t going to argue with HMRC. I said I fill in all my details when I do my self assessment as well and I said I’ve confirmed it with my accountant but he said it’s all wrong.


Thoughts please

[SueEllen]

1. Posted in the wrong part of the forum should have put in accounting
2. Do you have an accountant to discuss this with?
3. With a vehicle it really depends which is why you need an accountant.
4. Don't ring up HMRC for advice ask your accountant that is what they are there for.

[kwaboy]

1) Apologies for wrong place
2) just a quick query as thoughts that what forums are for
3) my accountant has previously confirmed tris as correct
4) didn’t ring up for advice , rang up to advise of incorrect details

5) thanks for helping on a forum for helping people

[MarillionFan]

Right just need some reassurance as I’ve had a conversation with someone on the HMRC tax credits helpine tell me some things which I believe are incorrect

As my business is new I’m not paying myself much this year. I have a limited company for which I’m a director. He is saying that I should be laying what I’m paying myself because it’s under min wage however I believed that as director I’m exempt from that. Also I have a van in the company name and use for company only and he said that’s a BIK, as well as a mobile phone that’s paid by the company (it’s in the company name) I said these are expenses to the company and separate to my pay and he said no that’s not the case, I’m confident he has got it wrong but I wasn’t going to argue with HMRC. I said I fill in all my details when I do my self assessment as well and I said I’ve confirmed it with my accountant but he said it’s all wrong.


Thoughts please

Forget Sue, he's still having hormone replacement and is a tad touchy.

Sounds like you're not an IT Contractor.

If the van and phone are for the purposes of work, then yes they are an expense. If you're LTD they will go into your accounts, if you're self employed they'd be part of your self assessment but as expenses for trading.

No experience of the minimum wage thing I'm afraid

[eek]

Forget Sue, he's still having hormone replacement and is a tad touchy.

Sounds like you're not an IT Contractor.

If the van and phone are for the purposes of work, then yes they are an expense. If you're LTD they will go into your accounts, if you're self employed they'd be part of your self assessment but as expenses for trading.

No experience of the minimum wage thing I'm afraid

I suspect I know where the minimum wage thing is coming from - for tax credits it is assumed that the self-employed are earning minimum wage because if they weren't they would fall back on unemployment benefit. The simple fact is that you can't pay yourself less than the minimum wage and claim extra tax credits to make up the difference.

To be clear here you can pay yourself less than the minimum wage but tax credits will only pay you the amount they would pay you if you were on the minimum wage.

[NotAllThere]

1) Apologies for wrong place

Fixed now.

5) thanks for helping on a forum for helping people

You're welcome.

[SeanT]

7. (or whatever number it is): don't ask HMRC for advice, you won't get any (or, as above, it'll be completely wrong)

[Lost It]

I know a bit about this.

Your Ltd Co. pays you minimum wage. You work for your limited co. Because you are theoretically on minimum wage, you could in theory claim tax credits.

DO NOT DO THIS.

Because once HMRC realise what is happening you will have to pay it all back. Immediately. It won't be your Ltd. Co. that has to oay it back it will be YOU.

The money the Ltd Co earns is not yours. You are an employee of the Ltd Co. If you need a pay rise, then go out back and talk to yourself...

[fidot]

You are an employee of the Ltd Co. If you need a pay rise, then go out back and talk to yourself...

Except that you almost certainly aren't an employee of YourCo. Do you have a contract of employment? If so, then you would need to pay minimum wage. I believe most people here are merely officer holders within their limited companies, meaning that there is no requirement to pay minimum wage.