On the bench - JSA, salary etc

[psychocandy]

Happened to me quite some time ago, and can't really remember how it all went down, but I do remember claiming JSA.

Anyway, currently pay myself £7K per year then pretty much take all of the dividends out every month or so (of course, leaving VAT and CT behind). My understanding is that this £7K means I pay over the minimum level so I get NI credit but don't actually pay any NI. Also, I pay no personal tax on this amount either.

Everything else, which is split between the dear Wife and me is subject to CT at 20%. Lovely. Unless we go over the 40% bracket no more to pay.

Good chance I will be on the bench shortly. But I've got one more invoice to come in. I do have another form of business income but its only £400 a month but at least it'll pay for accountants fees etc. But there won't be enough to pay £624 salary unless, of course, I leave money in this month and dont take a dividend (or as much) thus allowing me to continue paying myself salary for rest of tax year.

Am I right in saying this?
If I dont pay any more salary this year, in effect, I'll lose out on (£624 x 5 of tax free = £3120). Basically, because its already been paid out in dividends I'll pay 20% CT on this instead. i.e. £624.(£124/month in effect)

Next thing then is JSA. I know you can claim it if you're out of contract but not so sure if you;re company is still paying you a salary? Debatable I guess because you're not working but are getting a salary. Not a huge amount but £80 a week is better than £0. Might be a case of paying £124 more tax or getting £320 JSA a month I guess.

Anyone been in similar position lately? I know claiming JSA can be somewhat difficult in our cicrumstances and results can be variable.

And yes, I'm sure my accountant will advise me on the salary/tax position but hes not going to be able to comment on the JSA position, is he?

[northernladuk]

I would hope my accountant would have a view on JSA as well so can't do any harm asking.

Have you searched for the answer to your JSA? We had some pretty indepth discussions about it.
Try this...

jsa site:http://forums.contractoruk.com/accounting-legal/ - Google Search

Personally I wouldn't lower myself to do it again for the money even if I am owed it and all that.

[Scoobos]

Don't claim JSA if you are paying yourself a salary.

[psychocandy]

I would hope my accountant would have a view on JSA as well so can't do any harm asking.

Have you searched for the answer to your JSA? We had some pretty indepth discussions about it.
Try this...

jsa site:http://forums.contractoruk.com/accounting-legal/ - Google Search

Personally I wouldn't lower myself to do it again for the money even if I am owed it and all that.

Yeh. Know what you mean. It can be somewhat of an experience visiting the jobcentre. I found last time I did it though that the people in the jobcentre were pretty good after a bit. I think it was like a breath of fresh air to get someone who was going to be polite.

I remember the fella asking me about how far I was willing to travel etc. Then he told me that some people would start swearing and kicking off because the job centre asked them to take a job that was a 20 min bus ride away.

But, hey, on the bench, £80 a week or whatever it is for popping in once a fortnight. To be honest, I always look at it as being £350 a month or so that I dont have to take out of my warchest/savings. i.e every little helps to make it last longer.

[psychocandy]

Don't claim JSA if you are paying yourself a salary.

Wasn't sure about this to be honest. Although I'm sure someone has mentioned in the past, that small businesses are allowed to do this if there is no business coming in etc?

[FiveTimes]

To claim it dont you have to hand over part of your p45, so you would need to tell your accountant to issue one and stop taking a salary.
Hand it over and get the £120/two week.

[psychocandy]

To claim it dont you have to hand over part of your p45, so you would need to tell your accountant to issue one and stop taking a salary.
Hand it over and get the £120/two week.

Is that deffo about the P45? I've seen other threads where its been argued that P45 is not necessary.

[VectraMan]

If you have the company funds, pay it as a dividend. Or wait until you get a new gig, and pay it as a dividend then (or even as a lump sump as salary). Either way paying a regular salary AND claiming JSA seems rather perverse, even if you can get away with it.

I had about 10 months in total over a couple of years where I could have claimed JSA, and probably housing benefit too, but I didn't and kept paying myself a minimum wage salary, telling myself that I was a business and just because business was quiet didn't mean I could stop paying the staff, at least as long as the company was in the black. With hindsight, I'd have been a couple of thousand pounds better off now if I had done.

[jamesbrown]

I thought you had to have minimal assets to qualify for JSA, and even then you had to be benched for many weeks before qualifying and then go through regular progress reports on what you're doing to search for jobs? I think I'd have to be pretty desperate to go through that, which is sort of the point of JSA. And I doubt they'd really understand your situation at the jobcenter, which could be pretty painful. My g/f went through this several years ago for a very short period (fortunately) - she's an academic, and they had literally no clue about appropriate positions....got the impression that anything out of the ordinary is a bit of a saga.

[Craig at Nixon Williams]

You will not be able to claim JSA and continue to receive a salary from the company, indeed you will need to hand over a P45 in order to claim JSA. If you want to ensure that you are paying the full £7k salary within the tax year then you could increase the monthly salary payment after you stop claiming JSA.

The other issue here is that you have other business income of £400 per month – this income may affect your eligibility to JSA, you would be better asking the Job Centre about this though.