Claiming Benefits Whilst Contracting - Allowed??

[Gonzo]

Ok - Very simple question and I am sure the answer is straightforward.

If you are a contractor and being paid £5 an hour can you apply for council tax benefits and everything else that you might be entitled too??

In Gordon Brown's socialist utopia that is modern day Britain it is expected that you will suck on the teat of the welfare state to some extent. I don't actually know the truth of the matter since I have not been near the benefit system since the recession of the early 1990s.

I would hope that your other income would be taken into account and disqualify you from any benefits because I think that the welfare state should only be there to prevent the unfortanate from becoming indigent but then I am apparently old-fashioned.

Why am I falling for this troll?

[Bagpuss]

Any particular reason? You just think anyone earning is automatically ineligible for any benefits? That's certainly not the case.
Although I thought Joey was supposedly on £400/day even after being raped by his agent... I think you'd have to have severely disabled octuplets to get benefits on that kind of income.

Of course people on low incomes can get benefits, but the intention is not for people with a high incomes to get them, even if they do pay themselves a low basic salary. This reminds me of some uni students who got grants (when they were means tested) because their parents claimed to have low salaries, despite having high incomes. It is IMHO fraudulent and morally corrupt.

[Moscow Mule]

IF you don't take any dividends and can honestly claim to not have any other income or any savings of your own, then yes you probably can.

Whether you should or not is another matter. Personally, I would suggest that doing so was morally reprehensible.

[d000hg]

Yeah, trying to hide income should not be allowed... and I don't know if it is. If your company makes big bucks but you take only a meagre salary and you take no dividends I guess you should be able to claim, but probably HMRC would work to prove you were a disguised employee or something?

Benefits aren't just for those on minimum wage though... I don't know the details but I think if you have many children or are caring for someone, even a decent salary doesn't prevent you claiming.

My experience of benefits is limited to a few months' claiming JSA & housing benefit between jobs when made redundant... it allowed me to have a roof over my head and have time to find another decent job, which I guess is how it's supposed to work.

[The Lone Gunman]

There are several benefits which are based on salary and not on total income. Therefore anybody running a Ltd and taking minimum wage can claim those benefits.

I would suggest that doing so is morally wrong, but then again NL and the tax man seem to have no qualms about moral issues.

We owe it to ourselves to claim every last penny that we can legally claim.

[NotAllThere]

It's not morally wrong at all. It's fair. It's the flip side of IR35 and other moronic tax-take "improving" measures.

[FiveTimes]

There are several benefits which are based on salary and not on total income. Therefore anybody running a Ltd and taking minimum wage can claim those benefits.

Such as ?

[krytonsheep]

We owe it to ourselves to claim every last penny that we can legally claim.

If you're not happy with what you're earning, why not just phone up your agent/client and ask for a rate increase. A lot easier than messing about filling in forms and trying to get every last penny out of the system.

This is my plan B get about 100K in company wait till kids are 16-18, pay mortgage off in one year balloon.

Does this mean you're paying corporation tax on profits (each year), then when you take out the 100k you'll be paying an additonal 22.5% tax on part of the dividend above the basic rate tax limit?

[Hector]

Make sure that you declare any benefit income on your Self Assessment return.

[The Lone Gunman]

Such as ?

Don't know, never claimed any. I have a couple of mates who have 2 garage businesses between the 3 of them. Raking it in. All take lower salaries than the staff. All get some kind of benefit. I think it is family related.

If you're not happy with what you're earning, why not just phone up your agent/client and ask for a rate increase. A lot easier than messing about filling in forms and trying to get every last penny out of the system.

It is not about being unhappy with my rate, it is about playing the Government at their own game.
They will chase us for every last penny, it is only fair that we claim every penny we are entitled to.