Is this benefit fraud?

[Arese]

I've already posted this once, but for some reason got logged out of PH! So this is a summary.

I guy I know who, like me, is an IT contractor working through his own Ltd company, recently commented that he'd "just been to the DSS to sign off", because he's just started a new contract role.

Now, in my opinion, if you're a Director of a Ltd company and you have no work, then that's tough. You're still employed by the company, so surely you can't be claiming benefits?

How has he done this? Is it fraud?

[forsure]

Arese said:

How has he done this? Is it fraud?

If he has no income he's entitled to claim, presumably.

[Arese]

forsure said:

Arese said:

How has he done this? Is it fraud?

If he has no income he's entitled to claim, presumably.

But he's a director of a Ltd company, so isn't he therefore 'employed'. The issue that the company has no income, surely isn't one for the State to assist with?

[forsure]

Fair point. I'm not saying it's right, just guessing how it works.

[plasticpig]

Arese said:

forsure said:

Arese said:

How has he done this? Is it fraud?

If he has no income he's entitled to claim, presumably.

But he's a director of a Ltd company, so isn't he therefore 'employed'. The issue that the company has no income, surely isn't one for the State to assist with?

He can claim JSA as long as he has less than 16K in combined capital (personal & company) quite legally. If he has contributed enough NI why shouldn't he? He has no work and is seeking work; that is exactly what JSA is for.

[Engineer1]

A lot of contractors are LTD companies and I assume you can legally claim benifits, infact looking at the income based form I have here, asks about directorships, and any dividends etc, so I assume you can claim but what you get may well mean you spend more getting to and from the job centre than you actually get in dole.

[loltolhurst]

Arese said:

forsure said:

Arese said:

How has he done this? Is it fraud?

If he has no income he's entitled to claim, presumably.

But he's a director of a Ltd company, so isn't he therefore 'employed'. The issue that the company has no income, surely isn't one for the State to assist with?

whats being a director got to do with it, if he has no income and cant feed his kids thats whats job benefits are for?

not sure how it works if the COMPANY has money in it but he does not take it out. I know he himself has to have less than 16k. Wasnt there a bird on dragons den who had 100k in the company but was still on benefits as she did not draw on it?

2 ways of looking at that if it is the case - you have access to money and so should use it before relying on the state. or you could argue if by not drawing on it they can build up a proper business, the future amount they will pay in tax and benefitting the economy is worth the short term support.

anyone know whether you can keep cash in a company?

[odyssey2200]

he may not get benefits but would get his NI stamp paid and by getting an AB1 form signed every month he could claim on any insurance policies he may have for Mortgage etc.

you can only get an AB1 form from the job center if you sign on as a job seeker.

[plasticpig]

loltolhurst said:

anyone know whether you can keep cash in a company?

They combine personal and company cash. I am not sure what would happen in if the company had other assets such as offices etc.

[loltolhurst]

plasticpig said:

loltolhurst said:

anyone know whether you can keep cash in a company?

They combine personal and company cash. I am not sure what would happen in if the company had other assets such as offices etc.

did u see that dragons den - wonder what her exact circumstnaces were. id imagine theyd ignore the assets like they do personal ones?

[Deva Link]

plasticpig said:

loltolhurst said:

anyone know whether you can keep cash in a company?

They combine personal and company cash. I am not sure what would happen in if the company had other assets such as offices etc.

If it's a limited company then it makes no odds what's in the company. He's an employee just like anybody else would be an employee.

This is one of the reasons why, when we started up, we were advisied to pay ourselves "normal" salaries, and not mess around with nominal salary and dividend payments.

[loltolhurst]

Deva Link said:

plasticpig said:

loltolhurst said:

anyone know whether you can keep cash in a company?

They combine personal and company cash. I am not sure what would happen in if the company had other assets such as offices etc.

If it's a limited company then it makes no odds what's in the company. He's an employee just like anybody else would be an employee.

This is one of the reasons why, when we started up, we were advisied to pay ourselves "normal" salaries, and not mess around with nominal salary and dividend payments.

so if the employee is not taking money out can they claim benefit?

[a_bloke]

loltolhurst said:

Deva Link said:

plasticpig said:

loltolhurst said:

anyone know whether you can keep cash in a company?

They combine personal and company cash. I am not sure what would happen in if the company had other assets such as offices etc.

If it's a limited company then it makes no odds what's in the company. He's an employee just like anybody else would be an employee.

This is one of the reasons why, when we started up, we were advisied to pay ourselves "normal" salaries, and not mess around with nominal salary and dividend payments.

so if the employee is not taking money out can they claim benefit?

If they are not working they can claim benefit.

[Eric Mc]

Deva Link said:

plasticpig said:

loltolhurst said:

anyone know whether you can keep cash in a company?

They combine personal and company cash. I am not sure what would happen in if the company had other assets such as offices etc.

If it's a limited company then it makes no odds what's in the company. He's an employee just like anybody else would be an employee.

This is one of the reasons why, when we started up, we were advisied to pay ourselves "normal" salaries, and not mess around with nominal salary and dividend payments.

Directors of their own limited companies are definitely NOT like normal employees - and the Revenue recognises this. For instance, there are different NI rules for directors compared to employees.

However, if the company has no assets and the director has been "laid off" - and given a P45 by the company, then he should still be eligible to make a claim.

[segg250]

If he has no income then in my book he is perfectly entitled to sign on. When his company is in profit and he draws a salary he pays ni hence when no income he is entitled like anyone else to claim benefits.Whether the system sees it that way or not.

[Eric Mc]

segg250 said:

If he has no income then in my book he is perfectly entitled to sign on. When his company is in profit and he draws a salary he pays ni hence when no income he is entitled like anyone else to claim benefits.Whether the system sees it that way or not.

Are you a sole trader or a limited company?

I think to be in a position to formally apply for Unemployment Benefit/Job seeker's Allowance, I would think thaty the individual would need to have received a P45 from his employer, i.e. his own company.

If a sole trader, he would need to have formally ceased trading.

[loltolhurst]

Eric Mc said:

segg250 said:

If he has no income then in my book he is perfectly entitled to sign on. When his company is in profit and he draws a salary he pays ni hence when no income he is entitled like anyone else to claim benefits.Whether the system sees it that way or not.

Are you a sole trader or a limited company?

I think to be in a position to formally apply for Unemployment Benefit/Job seeker's Allowance, I would think thaty the individual would need to have received a P45 from his employer, i.e. his own company.

If a sole trader, he would need to have formally ceased trading.

what if he has a company on the side - i know a few people that do and who claim benefit as those companies make no money

[V8mate]

Eric Mc said:

Deva Link said:

plasticpig said:

loltolhurst said:

anyone know whether you can keep cash in a company?

They combine personal and company cash. I am not sure what would happen in if the company had other assets such as offices etc.

If it's a limited company then it makes no odds what's in the company. He's an employee just like anybody else would be an employee.

This is one of the reasons why, when we started up, we were advisied to pay ourselves "normal" salaries, and not mess around with nominal salary and dividend payments.

Directors of their own limited companies are definitely NOT like normal employees - and the Revenue recognises this. For instance, there are different NI rules for directors compared to employees.

However, if the company has no assets and the director has been "laid off" - and given a P45 by the company, then he should still be eligible to make a claim.

I was advised that, should I ever be in such a position, I would have to completely distance myself from the company, e.g. transfer the directorship to my wife.

When I took up some PAYE employment for a while, my company couldn't issue me with a P45 because I remained a director.

[segg250]

Eric Mc said:

segg250 said:

If he has no income then in my book he is perfectly entitled to sign on. When his company is in profit and he draws a salary he pays ni hence when no income he is entitled like anyone else to claim benefits.Whether the system sees it that way or not.

Are you a sole trader or a limited company?

I think to be in a position to formally apply for Unemployment Benefit/Job seeker's Allowance, I would think thaty the individual would need to have received a P45 from his employer, i.e. his own company.

If a sole trader, he would need to have formally ceased trading.

I have no idea of the legal position thats merely my personal opinion and the attitude i would take to the situation.

[Arese]

Interesting isn't it? Personally, I have just had two months 'on the bench' and didn't claim any benefits. It just didn't seem right.