Claiming working/child/tax credits/other benefits by paying small salary/dividends?

[psychocandy]

been claiming it for the last 6 years no problem i pay NMW and then take dividends, if you earn around the 20 thousand mark its around £180 a month in tax credit, my son was also able to claim EMA for college when that was availble.

so it can be claimed and its based on earnings not profits, having said that my wife does not work but my overheads are minimal i can SURVIVE quite happily on that but then i am running around in a V plate renault Clio

so it all depends on if you think its worth it for the amount you can get and if you can live on that level of money.

and before we get the "its morally wrong Brigade harping on" my current contract see me regularly sitting in a building where the great unwashed and foreigners come to make there claims for benefits, a few hours in there and you will realise how people are taking the benefits system to the cleaners everyday, its the system thats in place thats at fault so work it to your advantage, everyone else does

So your saying you're only taking 20K per year out total - salary and div?

And your partner has no income either?

I assume then you're leaving the rest in the company?

[psychocandy]

Thanks for your replies. I worked out that on a total income of £15k (made up of salary and dividends) our household would be entitled to the following yearly benefits;

child benefit: £1762
child tax credits; £15907 (working and child)
council tax benefit: £1080
housing benefit: £11,313
plus free school meals, prescriptions etc.

Approx £30k

So add that to the £15k

Total income of £45k most made up of benefits

You get child benefit anyway as long as you're below higher tax rate.

[psychocandy]

Maybe, but you do have to declare your dividends as earnings on the annual review, so really, what is the point in keeping your income so low?

Exactly. If only salary were counted (which is isnt) we'd all be claiming it.

Might be a nice little earner in tax credits but then as NLUK says if you keep the money in the company its gotta come out some time.

Personally, I try to pay divs (for me and the mrs) up to upper tax bracket if I can. With me and the mrs, thats £40+k per year at pretty much 20% tax.

Surely, if you're tsking out only £20K thats a lot of unused allowance every year.

Must admit I was surprised that the benefits on £15/20K salary were so much. Hardly worth working is it?

Been thinking about this though and you sure it works like this?

Yeh. Cool if you can survive on £20K then let the government pay you extra. Surely not like £20L or something though?

[psychocandy]

Thanks for your replies. I worked out that on a total income of £15k (made up of salary and dividends) our household would be entitled to the following yearly benefits;

child benefit: £1762
child tax credits; £15907 (working and child)
council tax benefit: £1080
housing benefit: £11,313
plus free school meals, prescriptions etc.

Approx £30k

So add that to the £15k

Total income of £45k most made up of benefits

Are you sure these figures are right? Earn £15K and they make up your income to £45k?

By that rationale, every family in the country would earn £45K minimum....

EDIT: Just been on entitledto.co.uk

Family income of £20K with one child nets about £2500 per year.
Income of £23K nets £500 per year.
Income of £15K nets about £5500 per year.

Not worth the hassle IMHO unless you really can live on £20K per year.

Completely pointless if partner works. (My wife earns £15K p/t, so even if I paid myself £7K and zero divs, I'd get about £10 a week off the government).

Guess it might be worth doing if close to retirement. Do this for 3 years, pay hardly any dividends, then retire and pay yourself the dividends over the next 3 years.