Council tax benefit and my business

[Pi-stoff]

I am Director of a limited company, the company has fallen on hard times and is bringing in little profit I owe HM Revenue and customs about £4000 for VAT, I have about £1000 working capital that I built up from £200 in the last few months and owe other creditors about £2000, my accounts are overdue because I cant pay my accountant (£500) for last years work and been fined £500 for that.

If I settle some of my business debts I will not be able to buy stock of the main items that brings in cash so effectively all chance of catching up will be as good as gone, because I have little money coming into the business I have not been taking a wage, I have taken about £100 a month when we desperately need it for food.

I am surviving on family tax and working tax credits that pays the mortgage and utility bills and a tiny amount for other bills and food, my partner uses the family allowance that is paid to her for food.

I put in a claim for council tax benefit and it was approved, for some reason I did not get the full amount paid but just a contribution, we currently have less money coming in than going out on utility bills and mortgage the occasional £100 I take from the business just helping us to stay afloat.

The reason they did not give me full benefit is because of the £700 profit that my company showed for a 6 week period that I put in the claim, I told them there and then that If I used that £700 I would not be able to run my business because I need the money to pay HMCE and buy stock to resell, I could not take the cash because it is not mine and belongs to the company, I can not just take money out of the company to the detriment of the company, should the company go bankrupt the administrator would consider that my actions caused the company to go into liquidation and there are serious repercussions including imprisonment for some actions.

I am now in a situation where I cant close the company because it has debts, I cant claim job seekers allowance because I have a job, I cant get a job because I have a business, I cant sell the business because no one wants it, I cant go bankrupt and claim Job seekers allowance because I wont be able to pay my mortgage because the extra £100 from the business would be gone.

I could sell my house to one of the companies that rent it and the council pay my rent but when I get back on my feet that means I would need to find an extra £200 a month because the rent would be more than my mortgage is currently.

I have spoken to the guys at our one stop (Council) shop and they don't know what a limited company involves, I even spoke to one of the senior council tax benefit officers and he didn't know what a Limited Company involves, how can someone who has no Idea about business make decisions that involve it?

Any ideas on how I can reapply for the council tax benefit that I have no chance of paying.

[reallymadwoman]

Hi, sorry it has taken so long for you to get a reply.

I can't actually help, knowing absolutely nothing about either limited companies or council tax, but my first thought is can Citizen's Advice help?

Either way, my reply should bump you up to the top of the forum so hopefully someone else who can help will be along soon.