Loaning my company money so I can claim Universal Credit Loaning my company money so I can claim Universal Credit
Page 1 of 2 12 LastLast
Posts 1 to 10 of 11
  1. #1

    Nervous Newbie


    Join Date
    Apr 2020
    Posts
    4

    Default Loaning my company money so I can claim Universal Credit

    Hello,

    I'm an ex-contractor pivoted to working on my own startup end of last year (using same LTD company). I've been living off savings since then and used my income from contracting as seed. I planned to launch in March - it's a B2B SaaS tool which has been heavily impacted by COVID-19, so I've had to halt any sales I had planned, so I'm just working on a few backlog features whilst I have the time.

    I have over 16k savings which I was saving for a deposit on a property, so me and my partner are not eligible for Universal Credit. I also didn't payroll myself salary since end of last year, so also not eligible to furlough myself and sit this out.

    An idea that popped into my head was to potentially loan my company money to bring my savings under the threshold so we could claim Universal Credit, for at least a few months until things go back to normal - can this work/is it a good idea?

    Alternatively, I could continue living on savings (it isn't ideal, but it is what is is). I don't need a lot of money to keep afloat for now - a couple hundred a month would be good enough, at least to tide me over until the COVID-19 situation improves and business start to open so I don't eat too much into our savings - during this time I could keep working on backlog non-MVP features.

    Another option is to go back into contracting to make some money in the interim.

    Any suggestions are appreciated - I'm also sorry ahead of time if I've misunderstood how any of the schemes work, I've rarely needed to use them (I claimed JSA once after college but haven't needed government support since then a decade and a half ago).

  2. #2

    More time posting than coding

    KinooOrKinog's Avatar
    Join Date
    Mar 2019
    Posts
    376

    Default

    Is it really worth committing benefit fraud for the sake of a grand?
    If you don't have anything nice to say, say it sarcastically

  3. #3

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    44,259

    Default

    The money in the company counts towards the target I believe.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

    Nervous Newbie


    Join Date
    Apr 2020
    Posts
    4

    Default

    Quote Originally Posted by KinooOrKinog View Post
    Is it really worth committing benefit fraud for the sake of a grand?
    Absolutely not my goal, didn't know it could be viewed as fraud. I'll scrap that idea then!
    Last edited by acccc; 18th April 2020 at 00:11.

  5. #5

    Nervous Newbie


    Join Date
    Apr 2020
    Posts
    4

    Default

    Quote Originally Posted by northernladuk View Post
    The money in the company counts towards the target I believe.
    Understood, thanks for the info!

  6. #6

    Should post faster


    Join Date
    Nov 2017
    Posts
    145

    Default

    Quote Originally Posted by acccc View Post
    Absolutely not my goal, didn't know it could be viewed as fraud. I'll scrap that idea then!
    Of course it's fraud, you've planned to deliberately and knowing deprive yourself of assets in order to gain access to a state benefit - it's the simplest defintion of fraud, and why the seven year rule was brought in on tax gifts (to stop parents gifting all their cash just before being placed into care)

    Oh... and also it wouldn't work anyway as its savings and cash based assets, if you loan the limited the cash you still "own" the money so you haven't solved the problem. If you actually gave the money to the company and signed away all personal rights to it then it could be considered not yours anymore, but then it would be liable to VAT, Corp Tax and PAYE/Divi Tax on withdrawal - all in all not that smart a move

  7. #7

    Super poster

    Hobosapien's Avatar
    Join Date
    Feb 2016
    Location
    LA - la la fantasy land
    Posts
    3,036

    Default

    I'm in a similar situation having closed my Ltd I used for contracting while going via a brolly for may last contract, and in recent months been working towards a new local public orientated business as a self-employed sole trader, so none of the handouts apply as I have over £16k in savings.

    I've accepted that I will have to rely on those savings and take comfort from the fact I don't have any debts so can go into semi-hibernation to keep outgoings down while I have no income possible.

    I did notice this morning while out for a run that there was way more traffic than last week, so maybe those not getting any or enough help are having to work as best they can. There seemed to be a lot of trades vans knocking about, and the rules say they can work if can't do it from home and can ensure social distancing with any workmates and customers.

    So I'm now thinking of ways to alter my original business plan to maybe do something during the months ahead when even if lockdown ends there is likely to be some form of social distancing required until a vaccine is available.

    It's a difficult time for most but there are always ways of making progress business and income wise without breaking the law but maybe bending the lockdown rules if common sense prevails.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

  8. #8

    Should post faster


    Join Date
    Feb 2020
    Posts
    101

    Default

    You can "sign-on" and claim UC as either an individual who has no job or as a Ltd Company (that is making no/little money), I was going down the 2nd route earlier this year as work had dried up to the the proposed IR35 changes, I dont know if the 16K savings still applies ?..Also what happens after a month or so when youve used up some of the savings ?. If there is now only 15K in the bank I assume you can then apply for UC ?

  9. #9

    Super poster

    Hobosapien's Avatar
    Join Date
    Feb 2016
    Location
    LA - la la fantasy land
    Posts
    3,036

    Default

    Yes the £16k savings limit still applies for universal credit.

    I have a lot more than that, so not too botherred about using up a few grand to cover living expenses until new normal returns. I'm sure it will all blow over in a few months.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

  10. #10

    Should post faster


    Join Date
    Nov 2017
    Posts
    145

    Default

    Quote Originally Posted by Hobosapien View Post
    I'm in a similar situation having closed my Ltd I used for contracting while going via a brolly for may last contract, and in recent months been working towards a new local public orientated business as a self-employed sole trader, so none of the handouts apply as I have over £16k in savings.

    I've accepted that I will have to rely on those savings and take comfort from the fact I don't have any debts so can go into semi-hibernation to keep outgoings down while I have no income possible.

    I did notice this morning while out for a run that there was way more traffic than last week, so maybe those not getting any or enough help are having to work as best they can. There seemed to be a lot of trades vans knocking about, and the rules say they can work if can't do it from home and can ensure social distancing with any workmates and customers.

    So I'm now thinking of ways to alter my original business plan to maybe do something during the months ahead when even if lockdown ends there is likely to be some form of social distancing required until a vaccine is available.

    It's a difficult time for most but there are always ways of making progress business and income wise without breaking the law but maybe bending the lockdown rules if common sense prevails.
    What time was your run? A lot more people went to school today as many parents who qualify for key worker status would already have taken time of to cover Easter School Hols, but are now back at their key jobs and having to take their kids to the government run creches (can't really call them schools at the moment)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •