Claiming benefits whilst on the bench

[HairyArsedBloke]

Since the warchest has all gone and I've been without any gig since March, my conscience is clean.

Never feel guilty about having some of your own money back.

Personally, I live by this credo.

[RichardCranium]

Some more info on how to do this.

You do not have to make your LtdCo dormant.

You do not have to issue yourself with a P45.

You continue to be a director (or in my case, Company Secretary) of your LtdCo.

The DWP (Department of Work & Pensions) (the one's that work out if you get JSA [Jobseeker's Allowance] ) are OK with this.

Imagine a factory making widgets. When no orders come in, the staff are laid off. They are NOT sacked, they are sent home on zero pay but continue to have a contract with WidgetCo Ltd.

They will be expected by the DWP to try to seek alternative employment, but they tell the DWP that as soon as WidgetCo Ltd gets an order, they will be going back to work there if nothing else has turned up in the meantime. This happens all over the country all the time.

This is exactly what happens with your LtdCo. You are "laid off". So you continue to be a Director and an employee BUT you are receiving no salary and you are doing no work for your LtdCo.

It really is as simple as that.

No redundancy and no telling Companies House anything.

[MPwannadecentincome]

Thanks for the pointers on this one guys - useful!

Just been researching this, I was going to submit a claim for Council Tax Rebate, but I don't qualify.

With good intentions and hoping to minimise inheritance tax, my parents many years ago put 25% of their property in my name so I have more than £16,000 of 'capital'.

I hope I'm not on the bench too long as the 'capital' disqualifies me from claiming JSA income based benefits which allows claims for Mortgage Interest after 13 weeks.

[RichardCranium]

Just been researching this, I was going to submit a claim for Council Tax Rebate, but I don't qualify. With good intentions and hoping to minimise inheritance tax, my parents many years ago put 25% of their property in my name so I have more than £16,000 of 'capital'.

It might be worthwhile double-checking with them over that one. They count "savings and investments" and include things you can easily liquidate - but you can argue you cannot sell ¼ of your parent's home. But I may be wrong.

You cannot qualify for any Housing Benefit or (most) Council Tax Benefit if you and any partner have £16,000 or more in savings and investments. The home you live in and personal possessions do not count.

How much is the value of all cash, savings, bank deposits, Tessas, PEP's, Unit Trusts, ISA's, building society accounts, Tax Credit arrears etc. and all "liquid assets"?

How much is the value of "fixed" or non liquid assets and investments - shares, buildings and land (but not the house you are living in). Deduct 10% of the value to cover cost of sale?

[FiveTimes]

Some more info on how to do this.

You do not have to make your LtdCo dormant.

You do not have to issue yourself with a P45.

You continue to be a director (or in my case, Company Secretary) of your LtdCo.

The DWP (Department of Work & Pensions) (the one's that work out if you get JSA [Jobseeker's Allowance] ) are OK with this.

Imagine a factory making widgets. When no orders come in, the staff are laid off. They are NOT sacked, they are sent home on zero pay but continue to have a contract with WidgetCo Ltd.

They will be expected by the DWP to try to seek alternative employment, but they tell the DWP that as soon as WidgetCo Ltd gets an order, they will be going back to work there if nothing else has turned up in the meantime. This happens all over the country all the time.

This is exactly what happens with your LtdCo. You are "laid off". So you continue to be a Director and an employee BUT you are receiving no salary and you are doing no work for your LtdCo.

It really is as simple as that.

No redundancy and no telling Companies House anything.

I thought you had to supply a P45 - that's what I was told anyway

If you are a director of Ltd can you also draw a divi if there is some money left ?

[OrangeHopper]

I thought you had to supply a P45 - that's what I was told anyway

If you are a director of Ltd can you also draw a divi if there is some money left ?

No, you don't have to produce a P45.

When I claimed after the Y2K boom, I was told that what is in the company is irrelevant.

However, I'm of the opinion that different offices may interpret things differently.

[VectraMan]

If you are a director of Ltd can you also draw a divi if there is some money left ?

If there's money left, why are you not paying it as salary?

[RichardCranium]

If there's money left, why are you not paying it as salary?

Bank charges, accountant's bills, anticipated expenses, toner cartridges, paper, use of home as office, broadband bills, ISP bills, web hosting bills, insurance premiums, Company House bill, Pensions Regulator bill, etc.

You still have a duty, as a director, to maintain the company.

And there is no reason why you can't have £100k in the company, if you wish. It is the company's money, not yours.

[VectraMan]

And there is no reason why you can't have £100k in the company, if you wish. It is the company's money, not yours.

I would suggest that having £100K in your company, choosing to leave it there and not pay yourself anything, and then throwing yourself on the mercy of the state claiming to be destitute is immoral at best.

Anyone genuinely in business would look at it that way. "I'm out of contract therefore I'm unemployed" is disguised employee thinking.

[RichardCranium]

I would suggest that having £100K in your company, choosing to leave it there and not pay yourself anything, and then throwing yourself on the mercy of the state claiming to be destitute is immoral at best.

I agree. But them's the rules. The company money ain't your money.

I chose to live off what was in the company and when that ran out, signed on. I took it to the other extreme and lived off the tax money too (rather than sign on). Many would say that is also immoral and, with hindsight, I think I have to agree.

Anyone genuinely in business would look at it that way. "I'm out of contract therefore I'm unemployed" is disguised employee thinking.

They shouldn't; that's permie thinking. They should think "The company has been unable to gain any clients, so the workforce has been laid off".

NB: 'laid off' is not the same as sacked or redundant; you remain on the payroll but receive no pay and do no work. It is accepted by both the company and the employee that if the company manages to find a clustomer, the employee will return to work. A contractor signing has been 'laid off by their employer'. While 'laid off' you can sign on and receive benefits provided you seek work from an alternative employer. The Job Centre accepts that spending your time seeking work for your employer so your employer can pay you is a valid use of your time and worthy of receiving Job Seeker's Allowance.

As far as I can see, there is no reason why you shouldn't sign on the day after each contract ends, provided you stop your salary & award no dividends.