Housing Benefit & Council Tax Reduction For Owners (Directors) Of Small Private Companies
One of our most asked about areas of Housing Benefit has been how to calculate income and capital for claimants who work for a 'company' in which they own a significant shareholding and what this actually means – namely people who have set up their own ‘limited company’ that is often just a very small business enterprise run from home. The Workshop below looks in detail specifically at what is involved when a claimant sets up a 'small limited company' rather than working as a 'sole trader', and the issues involved when assessing or advising on the housing benefit claims of people who set up their small business and become ‘company directors'.
This Workshop is available for in-house training
Further regional courses for this topic will be arranged for early 2018.
purposes for individual organisations.
A Workshop where we will consider a topic that is generating an increasing number of questions and discussions - How to assess the income and capital of the owner of a small private company. With more and more people deciding to work for themselves and set up their own small businesses, benefits decision makers and advisers/representatives are finding that they need to clearly understand how benefits apply to small private company owners in order to give knowledgeable and appropriate advice – including, for example, to claimants who work in building trades, market trading, internet businesses, etc.
We begin the day by establishing exactly what it means to be a company owner and in particular how this business model differs from self-employment. The pack includes a helpful glossary providing simple definitions of some of the concepts and terminology associated with small private companies:
· Why are the shares only valued at 1p each? And why are there 1000 x 1p shares – what’s wrong with having one £10 share?
· What are the different kinds of shares: “ordinary” shares, “preference” shares, “management” shares?
· Do the Directors always own the company?
· What are the “Articles of Association” and the “Memorandum of Association”?
When assessing HB for a company owner there are two principal matters for the Council to establish: How much earned income does the claimant get from his/her company? And what is the capital value of the claimant’s shareholding? The second half of the morning deals with capital:
· What methods are available to establish the value of a private company with no publicly quoted share price?
· Tangible assets, intangible assets and “good will”;
· Sometimes a company owner doesn’t seem to be a lot different from a self-employed person. The HB Regulations cater for this: When should that rule be invoked so that a company owner’s capital is assessed as if s/he were self-employed?
In the afternoon sessions we turn our attention to the income earned by company owners:
· If the claimant receives dividends as a shareholder, how are these payments treated?
· What if the claimant draws a low salary but the company makes a substantial profit and pays significant dividends?
· How do we deal with accounting devices designed to minimise tax liability, such as employing a spouse who does not draw his/her full salary?
· What do all the numbers and technical terms in the company’s accounts mean?
We round off the day with a couple of issues that crop up regularly:
· How do we deal with the director’s loan account or current account: A running tally of money owed by the company to the claimant, or owed to the company by the claimant?
· And how do we deal with rent agreements between the claimant and his/her company: Perhaps the claimant rents a flat from the company, or maybe s/he rents a shop or office to the company. This section of the course includes a discussion of the latest Upper Tribunal decision on renting from a company: 2014 UKUT 325 (AAC).
This Workshop is designed to look specifically at benefits for “Directors’ of small limited companies. We also offer a separate One Day Workshop that looks at assessing and advising on claims from people who are self-employed that do not set up a limited company (i.e. Sole Traders) – often in trades such as child minders, mobile hairdressers, taxi drivers, window cleaners, etc.
9.30 – 9.45 Arrivals and coffee/tea
9.45 Introductions and course overview
11.15 – 11:30 Coffee/tea break
1:00 – 2:00 Lunch break
3.00 – 3.15 Coffee/tea break
4.30 Workshop ends.
Difference between a company owner and a sole trader
· General differences
o Legal personality, liability, tax
· Differences of particular importance in HB & CTR
o Earnings, ownership of capital assets, dividends
Forming a private company
o Director(s) and Company Secretary
· Share capital
o “Paid up” and “issued”
o Different kinds of shares
· Key formation documents
Capital value of shares in a private company
· Understanding the balance sheet
· Intangible assets
· Good will
· Traditional methods of valuing a company
· Disregarding capital if “analogous” to self-employment /
Treating a company owner as self-employed
Income of company owners
· Earnings and notional earnings
· Correct treatment of dividends
· Understanding the accounts
Other matters relevant to companies
· Directors loan account/current account
o In credit (the company owes money to the Director)”
o In debit (the Director owes money to the company)
· Renting premises from/to your company
Your Presenter - Peter Barker
Peter has worked in the field of benefits since 1985, and first became a local authority Appeals Officer over 25 years ago. His previous posts include working for the Citizens Advice, Westminster City Council and the Local Government Ombudsman, where he edited the in-house Housing Benefit practice note He combines a wealth of first-hand experience with expert knowledge of adjudication legislation, and has a real enthusiasm for the topic. He now works as a trainer, appeals presenter/submission writer and specialist adviser. Peter is an expert on the decisions and appeals adjudication framework and European rights of residence. He has a detailed knowledge of case law and he has recently developed a methodology for resolving disputes about supported and exempt accommodation. Peter now represents many local authorities on Housing Benefit appeals cases on a wide variety of issues in England, Wales and Scotland - at both First-tier and Upper Tribunal level. As well as an in-depth knowledge of Housing Benefit topics such as ‘Persons From Abroad’, ‘Exempt Accommodation’, and ‘Appeals & Tribunals’, he has also become well-known for his knowledge and courses on the new Welfare Reform and ‘Universal Credit’ legislation. Peter has presented and developed hundreds of courses over the last few years and his analytical skills and enthusiasm for his subject are unmatched.
Booking Fee: £240 + V.A.T.
Includes lunch, comprehensive course notes and refreshments.
BOOK THREE PLACES AT THE SAME VENUE AND RECEIVE A FOURTH PLACE FREE!
It is essential that we receive your Booking Form with an Official Order Number if your organisation's procedures stipulate these must be provided. You will be informed within 3 working days by email when this has been received and that your place(s) are reserved, otherwise you should contact us to confirm the booking has been received. Substitutes to the persons named on the Booking Form may attend right up to the day itself. However, it would be helpful if we could be advised of this beforehand, and also informed of any special dietary needs of the person(s) that are substituting.
Do you have more than 4 people requiring this training, but not sufficient for an in-house Workshop? Often this may apply to Workshops suitable primarily for Team Leaders/Supervisors. Please contact us for details of our special discounts which can provide a cost-effective solution to meeting your training needs.
To book online please:
Post / Email: Please complete the Booking Form, Post / Attach and send to: :
Zebra Training Services Limited
P.O. Box 268, Wigan, WN5 8FQ
E-mail: mail@ZebraTraining.co.uk Tel: (01942) 222078
You will be invoiced for the Booking Fee – you do not need to send payment when booking. Cancellations received in writing within 10 days of the Workshop date, or non-arrival, will be charged at the full registration fee. Cancellations received in writing within 11-28 days of the Workshop will incur an administration charge of 35% of the fee above. Cancellations received in writing within 10 days of the Workshop date, or non-arrival, will be charged at the full registration fee. Substitutes may attend on the day without prior notice. Substitutes may attend on the day without prior notice. A copy of the full Terms & Conditions is available from Zebra Training Services on request.