Benefits when starting up a company

by **Incredulum** on Thu Nov 03, 2011 7:49 pm

An individual is made redundant and is entitled to benefits.

That individual starts self-employment.

If the "self-employment" is through a company, does anybody know how earnings of a company are totted up in calculating benefits?

by **Tax Champion** on Fri Nov 04, 2011 4:08 pm

If a business is run through a limited company, it is not self-employment - a director is an employee.

It is possible to claim benefits while a director of a company, but it would have to be demonstrated that there were no profits from which salary or dividend could be paid, which could be the case with a new start-up. However how can you get a business up and running while still being "available for employment"?

by **section 44** on Fri Nov 04, 2011 4:57 pm

Why wouldn't the shares in the company not be regarded as capital?

Usually for means-tested benefits purposes capital is deemed to give rise income (e.g. a pound or so of income per week for each £500 of capital).

by **Incredulum** on Fri Nov 04, 2011 5:54 pm

I presume the company would be incorporated with £2 of share capital, so 20p per year is not going to make a difference.

The "available for work" test could easily be achieved if no/little work is picked up.

Goodness only knows how people navigate the system, it's extraordinarily complex.