Hi all. I'm new here but I'm hoping that I can get a little information as it seems a bit of a grey area. I recently had my benefit stopped for housing and council tax benefit as after being requested for my company accounts for last year I did so and have been told that because the profits are above £16,000 (the threshold), I am not entitled to any benefit.

Is this right? I ask because this money isn't mine, it's the company of which I am a director of.

Hoping for some facts please as I'm still building my business hence the profit that was retained in there.

Many thanks in advance.

Dom

Hello and welcome to CAG.

Is anyone else involved in the company please and could they be entitled to money from the company, as well as yourself?

My best, HB

Hey, thanks for the reply.

I am a director and there is another shareholder but that's it. There are small investors but unofficially, as they will be paid back, and was family and friends when the business started.

Thanks,

Dom.

for limited companies, the issues are: -

1. any earnings or emoluments received as an employee or director are treated as income
   
2. any dividends received are treated as capital
   
3. if you are a share holder, then the market value of the shares are treated as capital
   

from the limited information you have provided, it appears likely the Council has determined that market value of your shareholding (plus any other capital you may hold) is worth in excess of £16,000

for limited companies, the issues are: -

1. any earnings or emoluments received as an employee or director are treated as income
   
2. any dividends received are treated as capital
   
3. if you are a share holder, then the market value of the shares are treated as capital
   

 

from the limited information you have provided, it appears likely the Council has determined that market value of your shareholding (plus any other capital you may hold) is worth in excess of £16,000

Hi, thanks for the reply.

Upon looking at every other council, it seems this isn't the case. I don't have this £16,000 in my hand and don't just have free access to it.

Can you find me any legislation that says this or otherwise? The whole point of me being a director is that the company is different to me and completely separate.

Thanks, Dom.

It's all disregarded as per HB Regs 49

(5) Where a claimant stands in relation to a company in a position analogous to that of a sole owner or partner in the business of that company, he may be treated as if he were such sole owner or partner and in such a case—

(a)the value of his holding in that company shall, notwithstanding regulation 44 (calculation of capital) be disregarded; and

(b)he shall, subject to paragraph (6), be treated as possessing an amount of capital equal to the value or, as the case may be, his share of the value of the capital of that company and the foregoing provisions of this Section shall apply for the purposes of calculating that amount as if it were actual capital which he does possess.

(6) For so long as the claimant undertakes activities in the course of the business of the company, the amount which he is treated as possessing under paragraph (5) shall be disregarded.

A lot of local authorities miss paragraph 6.

Quote this in your appeal and all should be good.

Hope that helps.

And I'm back.

After being told many times by the benefit officer that I'm self employed and me explaining that I'm an employee of the company, they have now come back to me stating:

As per Housing Benefit regulation 2006 – schedule 6 paragraph 8 states that the assets of a business owned by a claimant are disregarded where he or she is self employed in that business.

 

The regulations state when capital can be disregarded rather than listing every single scenario when it cannot be disregarded as self employment is the only case where it can be.

 

As you are not self employed this is the reason that the capital in the bank, which exceeds £16’000.00 must be taken into account and therefore you do not qualify for benefit.

Any ideas on tackling this? It seems that one minute they want me as self employed when it suits them, and the next minute I'm not self employed when it suits them.

Any help is greatly appreciated.

they are entitled to make assumptions and they are assuming that the company profit is your income. You will have to appeal and prove that it isnt.

That was the appeal. I even have my P60 next to me showing how much I earnt which was all through monthly pay like it has been for the last several years.

Where do I go from here as they even admitted during the initial stage and appeals stage that they was unsure on the legislation and had to research into it. Filling me with no confidence whatsoever.

Is there a body or regulator who I can go to, as apparently there is only one appeals officer, and that's who sent me the above in post #7.

Thanks.

Just to be clear on our terminology here, although you've said "appeal" it sounds like the matter has been considered by someone working for the council. Have you requested a formal appeal to the independent tribunal?

Just to be clear on our terminology here, although you've said "appeal" it sounds like the matter has been considered by someone working for the council. Have you requested a formal appeal to the independent tribunal?

Hi,

Not yet. It went from a benefits office to an appeal from within the council and went to their one and only appeals officer and I'm awaiting the formal response in the post and then I'm guessing the next stop is the tribunal?

Worth me doing anything else in the mean time in terms of local government ombudsman or official complaint procedure?

Thanks.

Hi,

 

Not yet. It went from a benefits office to an appeal from within the council and went to their one and only appeals officer and I'm awaiting the formal response in the post and then I'm guessing the next stop is the tribunal?

 

Worth me doing anything else in the mean time in terms of local government ombudsman or official complaint procedure?

 

Thanks.

Yes a totally independent Tribunal. I quoted the rules above. A tribunal will make the correct decision.

Yes a totally independent Tribunal. I quoted the rules above. A tribunal will make the correct decision.

Got another call, where they are stating that they are no longer treating me as self employed but as an employee, but still because I own shares in the company, I'm classed as having that asset.

To break down the regulation into lamens terms, does that sound correct:

(5) I have a position in the company similar to that of a sole owner and therefore I should be treated as a sole owner and in such case it should be disregarded due to me taking work within that business.

That sound right?

Obviously the fancy wording is a bit iffy when trying to explain it.

Thanks.

And another reply from their benefits operations manager this time:

As discussed, I am looking into your case in detail and have come to the conclusion that the exemption under regulation 49 paragraphs 5 & 6 does not apply in your case as the shareholder funds you hold in the company is being treated as actual capital, and not notional capital, which is what this regulation applies to.

Any ideas, as I know it will go in my favour at the tribunal stage, but if I can get this fixed before then, I'd rather do so, as this is just wasting time and of course leaving me with less money each way than I had before.

Many thanks.

Anyone got any advice?

appeal formally and go to tribunal. It costs you nothing and will clear up the matter. If you are right you get the claim backdated, if you are wrong you cannot claim again within 6 months.

Thanks, but from what I've said in this thread, I am right aren't I?

The money that the company has doesn't belong to me, and therefore shouldn't be classed as my capital, as it belongs to the business. Right?

Thanks.